Examination of Witness (Question Numbers
26 April 2011
Q713 Chair: Good
morning. This is a further session of the Committee's inquiry
into football governance, and for the first part of our evidence
this morning I would like to welcome William Gaillard who is the
adviser to the President of UEFA. Can I invite Thérèse
Coffey to begin?
Dr Coffey: Welcome, Monsieur
Gaillard. Why is it important for UEFA to introduce Financial
Fair Play Regulations at this time for its competitions?
Thank you. Certainly, it is not too early to introduce Financial
Fair Play measures. It may be a bit late but I think the financial
crisis has induced us to probably quicken the pace of the financial
reforms that we were contemplating for the past two or three years.
We felt, in particular, that the growing inflation of wages and
transfers, the large number of clubs facing an unsustainable debt
burden and the fact that a number of clubs Europe-wide were going
into administration, meant that the system needed some reform.
We felt that the countries where a strong licensing system had
been in place were not facing the same problem as the ones where
licensing was weak or nonexistent and, therefore, we felt that,
through our licensing mechanism for our own competitions, we could
introduce some order and more rationality into professional football.
Q714 Dr Coffey:
So what would you suggest UEFA is doing to avoid unintended consequences,
like increased ticket prices? UEFA has already come under criticism
for the high cost of Champions League tickets that are open for
purchase. What about the clubs?
In terms of the Champions League final tickets, our President
has already said in London that he is quite aware that we made
a mistake. We got it wrong while getting it right. That is, we
got it right in terms of fighting ticket touting but we got it
wrong in terms of the prices that supporters would have to pay,
albeit only the 10,000 that are not getting tickets through their
We have said that in future years we will be looking
at, say, like a fourth tier of tickets that would be accessible
to families. We have spoken quite a bit on this and we apologise
for the mistake we made. It is always very difficult to get the
right balance between ticket prices and what will be a disincentive
to the black market and ticket touting. In the past we have had
lots of problems with that, with tickets that were offered at
convenient prices for families being sold 10 times more expensive
or 15 times more expensive, and that again does not solve the
Now for clubs, high ticket prices are not always
a recipe for sustainability and the German Bundesligathe
German First Division Leagueproves that you can keep ticket
prices at a fair level that are accessible to most people in society
while at the same time breaking even or better, as far as the
clubs are concerned. So we believe that there may be some good
influence of Financial Fair Play on ticket prices, although there
is no direct link to ticket prices. We feel that financial licensing
will introduce more rationality in the way clubs are being administered.
It is basically a question of incentives. There are
incentives to behave in a more rational financial way through
Financial Fair Play, and if the clubs heed our advice they will
find themselves in a better overall financial position.
Q715 Dr Coffey:
So what will UEFA do to ensure clubs are not circumventing the
rules? I give you the example of a teamI can't remember
off the top of my headwho we discussed in Germany where
instead of, if you like, ownership money they received sponsorship
money of a very large amount.
Damian Collins: It was
Dr Coffey: It was Schalke.
Okay, that is highly relevant for tonight. So Gazprom I think
gave them 100 million. How will you end up ensuring clubs
don't circumvent the rules?
Yes, there is another example that is always given in Germany,
where the control authorities intervened. It was the case of Wolfsburg
and Volkswagen. The person in charge of Financial Fair Play at
UEFA had answered a question at the Soccerex conference. He said,
"Look, like with any rules there will be loopholes. We will
just have to be very quick at plugging them."
Dr Coffey: Quick at plugging
the rules. You are starting to sound like a tax lawyer now; it
is quite interesting.
Q716 Dr Coffey: How transparent
will the monitoring for the regulations be?
It should be fully transparent. That is our intention. That is
what we want to do. The figures will be published. This is one
of the challenges because, as you know, Europe is a single market
but it is not a single taxation area. We have lots of countries
that do not belong, for example, to the European Union that may
have less than transparent tax systems. So for us this is one
of the big challenges to get accounts that are readable, transparent
and clear to everyone. We have a multi-national panel of financial
experts that will be looking at this data, and our experience
over licensing tells us that we can get to the bottom rather efficiently.
By the way, the chairman of this independent committee
that will be supervising Financial Fair Play is a colleague of
yours. He is a Member of Parliament, from the European Parliament,
Jean-Luc Dehaene, who was
Dr Coffey: The former
Prime Minister of Belgium?
Yes, five times Prime Minister of Belgium.
Q717 Dr Coffey:
At the moment UEFA will be the sole people policing this; you
will not be asking the FA, as the governing body of football in
this country, to do that on your behalf, you will be doing that
The FA is already responsible for delivering licences to English
clubs participating in our competitions, so this will go on. That
is there will still be the licensing process for the clubs that
are competing in Europe, at the same time we will have an overseeing
process far more complex and thorough than it has been in the
past through the Financial Fair Play mechanisms. There is no licensing
as such for clubs in England. Of course, if licensing is introduced
in the way it exists, for example, in Germany, the Netherlands,
Switzerland, France and many other countries, it is obvious that
it will make our task a lot easier.
Q718 Dr Coffey:
I think the FA and the Premier League do suggest that they do
effectively have a licensing system. Could you explain why you
They have bits and pieces of licensing. They don't have a licensing
system over the whole professional game. It is divided. It is
not streamlined as such. There is nothing like what exists in
the Netherlands or in Germany. Some other countries are in the
same situation but very few.
Q719 Dr Coffey:
One final question on this: clearly, one of the motivations is
it seems to be to tryhow can I put it?to stop, say,
Roman Abramovich coming in and pouring money into a team. What
is wrong with somebodyin my view it is a different kind
of philanthropysaying, "I want to get this team from
here to here". What is wrong with that?
There is nothing wrong with that if it has no consequences on
the overall picture for professional football. What we have seen
is that whenever you get an investor who invests his own money
at a loss, it drives transfer prices up; it drives wages up; it
pushes other clubs that probably could not afford it to try to
match that club that has become suddenly rich, and it creates
a lot of imbalances and a lot of danger in the system.
We have seen over the last 10 years more than 80
clubs in Europe going into administration, which is a large number.
We also feel that there is great danger
Q720 Dr Coffey:
Is that 80 clubs who compete in UEFA competitions or generally?
Generally in Europe, yes. We feel also that if the person brings
equity it is of course a much better situation than if he only
brings debt, which we have seen a lot. We have seen these leverage
buyouts that have been rather disastrous for European football,
especially English football. We also feel that even if a person
brings equity if he suddenly loses interest, either in the club
or in football, and finds it more attractive to invest in baseball
in the US, for example, the club will be left with a wage bill
that it will never be able to pay, even a couple of months after
the sugar daddy is gone. We feel that a model based on sugar daddies
is not sustainable in the current financial situation. The model
has to be based on clubs at least breaking even.
Now we have introduced flexibility. For the first
three years there will be a 45 million flexible line that
clubs may not break even and be in deficit for 45 million.
The three years after will be 30 million and then lower
as we go on with the process. We feel that it gives enough flexibility
for someone who would like to, for example, support his own local
club with a large influx of money once and for all. He or she
could do that under the system.
Also, we have left the door wide open for capital
investments. We know that one of the great features of English
professional football is that most of the clubs own their own
grounds. That is a major source of income. You can always build
new grounds, modernise them and make them more profitable. For
capital investments there is an exception to the Financial Fair
Play Rule. That is anyone who wants to give a stadium or a training
facility to a club will be able to do so.
Q721 Damian Collins:
Do you think there is a legitimate concern that UEFA has greatly
extended its remit by introducing these rules?
By whose standards?
Damian Collins: Given
that UEFA exists to organise international competitions between
European countries, and what you are effectively doing now is
enforcing financial regulations on clubs right across Europe,
effectively through the backdoor, and you are doing that because
of the financial lure of playing in the Champions League.
The system that prevails in football is a pyramidal system with
at the bottom the 53 national associations, which of course rest
on another pyramidal system that springs from the counties, the
departments, the provinces, depending on the country. Above that
you have UEFA as the European governing body and above that, of
course, you have FIFA as the world governing body.
Q722 Dr Coffey:
Can you clarify that, please, because I thought UEFA only governed
its own competitions rather than
We run our own competitions, but we are
Dr Coffey: Yes, you don't
oversee the FA do you, or the Scottish FA?
Well, we do not contemplate overseeing national associations although
we do regulate them in terms of their statutes; their statutes
have to be in line with our statutes and our statutes have to
be in line with FIFA statutes. So from a statutory point of view
we do oversee them, but we believe in subsidarity.
We could impose simple financial rules through our
Congress and so could FIFA, and that would extend to the 208 national
associations that they control, for example. They have not done
that. We have not done that because we believe in the subsidarity
Q723 Damian Collins:
So, on that basis, would the rules be interpreted differently
in different domestic associations because, as you have said in
your evidence so far, the traditions and the financial models
of clubs vary greatly in different European countries?
You are absolutely right on this. What we will doand we
said it very clearlyis that Financial Fair Play Rules will
apply to clubs that want to compete in our competitions, which
is not only the Champions League but also the European League.
That means that over three years in a country or an association
like England you probably have 15 clubs that would be involved
out of the 20 of the Premier League.
We will look into the peculiarities of the international
system. We have to do that because, as I said, the tax laws are
not the same from country-to-country. The financial regulations
are not the same. They all operate in the same market but they
are not regulated in the same way, including by Government regulation.
So we are well aware of that. We have a long experience in licensing
already. The European Commission has praised our licensing system
and has approved the Financial Fair Play mechanisms in its recent
communication, so we feel we are on solid ground from a legal
point of view.
Q724 Damian Collins:
Would you expand that and have a rule on the distribution of television
rights? Because major European clubs might say that they have
competed in recent years against the inflationary practices of
Real Madrid and Barcelona who negotiate their own TV fees and,
therefore, have a much, much larger slice of income from that
than British clubs would have.
The whole issue of TV rights is a very complex one. It is creating
a rather unsustainable situation for many leagues in smaller associations
that basically don't have the critical mass of audiences in order
to finance their football. If you compare the income of a league
like the Belgium League, which let us say in the 1950s and 1960s
was certainly a very competitive league with clubs doing extremely
well in Europe, their income is about 30 times smaller than the
Premier League. What you are pointing to is the issue of Spain,
which is kind of a standalone these days in Europe, where clubs
sell their own rights. The European Commission has clearly stated,
in the same communication I mentioned before, that the best way
to sell rights is to sell them collectively. We strongly believe
Again, under the principle of subsidarity, we have
not intervened on the Spanish scene although we have always made
it very clear that we felt it was not a very efficient way of
distributing the money coming from TV rights. At the same time,
for example, we still have a situation that may change with the
possible ruling by the Court of Justice in the next few months.
For example, English clubs tend to get proportionately a higher
return from the Champions League because the English TV pool is
richer. This could change under European law.
Q725 Damian Collins:
I appreciate this is a complex area and we couldn't explore all
of it in this session. We will probably try, but let us go back
to my original question, which is: the unintended consequences
of whator maybe they were intendedyou are effectively
doing is introducing financial regulation of the European leagues
through the backdoor. The Chief Executive of the Premier League
said that, because most of the clubs will want to apply for UEFA,
effectively they are going to be complying with it even though
it is not required by the Premier League, and that once you go
down this road you have a system that has been designed to deal
with certain issueslargely debt issues that you have raisedbut
you inevitably are getting drawn into all sorts of other variances
and differences that may distort competition between football
That is not our primary aim because there is all kinds of debt:
there is debt that is there to finance future sustainability,
like investing into infrastructure like a stadium or a football
academy; and there is debt that is basically there to support
free spending on wages or transfers, and that isI would
call itrather negative debt. There is also debt that may
be legitimate but not serviceable because of the financial situation
of the club. So if we wanted to deal with debt we could have made
a rule that focused on debt. We chose not to do so, not even to
introduce a ratio that would be acceptable based on debt or even
a ratio that would be based on the share of transfers and wages
on total expenditure or on turnover. We wanted to give flexibility,
understanding that clubs operate in very different environments
in Europe and, as I said, especially the fiscal environment.
The Italian clubs complained to us. They said, "Well,
it is very difficult for us to own our own stadiums because municipal
governments won't let us do that and our Olympic Committee won't
let us do that, so English clubs have a tremendous advantage"
and they say, "We cannot sell beer and they can". Whenever
you talk to clubs from different countries they always find what
puts them at a disadvantage. They never tell you, "Well,
there is this great loophole that puts us to a great advantage".
So what we will be doing is making sure that we are fair and that
we take into account some peculiarities that may exist in one
country and not in another. Then experience will tell whether
we succeed or not.
Q726 Damian Collins:
Yes, two more questions: my concern is you are becoming, effectively,
a European financial regulator for football. I am not entirely
certain that is what UEFA was set up to do and I think it is sort
of "mission creep" on your part, but do you think
Well, no, in 1955 most clubs were paying television to show their
games. The world has changed.
Damian Collins: Yes, indeed,
but Michel Platini has implied that the debt financing models
of English clubs, like Chelsea and Manchester Unitedwho,
despite the iniquities of their leverage buyout, are about to
play in the semi finals of the Champions League tonight
that these models of financing are effectively cheating. Is that
No, I think our view is a lot more sophisticated then just what
could be summarised with a three word headline.
Damian Collins: I can
read you what he said. He says, "Look at Chelsea and Manchester
United's debt. FIFA and UEFA have to do something to combat that,
because today the ones that cheat are going on to win". He
said that just after
Four years ago.
United played Chelsea in the Champions League final. So it is
a pretty direct reference to them.
Yes, we looked at this issue of debt and certainly you won't find
that in our regulations. What we are saying is that the leverage
buyouts ended up for many clubs in a disaster. Just take Liverpool.
You have owners who came, contracted debtboth of the previous
ownersand saddled the club with the debt. The club has
been rescued, thank God, because of the tremendous heritage that
Liverpool actually represents, but it was a close call.
Q727 Damian Collins:
If I may, one of the things we discussed is where this pressure
for competition comes from. Do you accept that it could be said
that it is the Champions League that has been the major distorting
influence on European football? Because the money you get from
playing in the Champions League regularly is so great and the
competition in National Leagues is now not to be champions but
is to primarily finish in England in the top four so you are playing
Champions League football. That is where the real money comes.
That is why clubs take all the big gambles and that in timeand
your new regulations may lock this in placeyou are creating
an elite league of the top clubs that regularly play in Champions
League football and pulling the drawbridge up to stop anyone else
breaking into that group, or making it harder for people to break
into that group.
According to our calculations the Champions League is not the
big prize for the club season. In England, for example, it represents
less than 10% of major club income.
Damian Collins: But you
know there is a lot more that goes to that: there is the international
exploitation of that, and the marketing and benefits that come
from that is worth a lot more than that.
In terms of image I think it is extremely important, but in the
present system you can have a club that basically has never participated
in the Champions League and still can be a very rich club; take
Manchester City, for example.
Q728 Damian Collins:
So you are saying that you don't think Manchester City would have
taken on the debt they have taken on if it wasn't for the prize
of qualifying for the Champions League?
I don't know what the motivation is on the part of the owners
of Manchester City.
Damian Collins: Most people
The fact islook at Liverpool they said very clearly that
for this year maybe the Champions League is not the objective,
consolidation, getting the club back on its feet
Damian Collins: But the
problems they have had, most problems, have stemmed from the failure
to qualify for Champions League and that is why they had a crisis
in finance that they did.
Look, they have qualified I think 10 times in the last 11 years,
so this is not what brought them down. What brought them down
is that they suddenly found themselves being owned by two failed
banks that had been nationalised. You had this extraordinary situation
of an English club being owned by the British and the American
Governments, because Wachovia was taken over by the US Government
and RBS was taken over by the British Government and they were
the main owners of Liverpool debt.
Q729 Damian Collins:
You could say it is not exclusively a British problem, look at
Borussia Dortmund and Schalke in Germany. Those clubs that have
taken on debt; in the case of Schalke, have taken on a very big
sponsorship deal from Gazprom to help finance them to get them
into the Champions League, and that is the commercial focus of
most major European clubs.
I would think that this focus would be stronger in leagues that
are less rich than the English Premier League. I would imagine
that for a Belgium cluband I know for a Belgium clubparticipating
in the group stage of the Champions League is tremendously meaningful,
or for a Norwegian club, just because the income from their own
national football is so low. In England it is not an issue. As
I said it is less than 10% of the turnover of a major English
club. I think in terms of prestige, yes, it is important. After
all, people should be in football not in order to make money but
to win trophies. That is what supporters expect.
Q730 Damian Collins:
Finally, Monsieur Gaillard, this has taken some time, but there
is a real dangerand this may not be the motivation behind
the Financial Fair Play Regulations but it may be a consequence
of themthat the Champions League is perpetuating the dominance
of Bayern Munich, Real Madrid, Barcelona, Manchester United and
other clubs that regularly qualify, and making it harder for other
clubs to break through into those top tiers in a meaningful way
because they simply don't get the extra revenue that comes from
playing in the Champions League. The options of securing a UEFA
licence and financing the expansion and investment in their clubs
through debt or other mechanisms are now going to be much more
Unfortunately, unlike in the US, European football has always
been unbalanced. Even if you look at the 1920s and the 1950s you
always had dominant clubs even before the Champions League existed
or before it was a meaningful source of revenue. Real Madrid won
the Champions League five times in a row; Bayern Munich, Ajax,
Manchester United won it at a time where Champions League revenue
Q731 Damian Collins:
We asked Martin O'Neill would a club like Nottingham Forest ever
win the Champions League again and there is a strong view that
they wouldn't, and probably a club like Celtic would never win
the Champions League again.
I completely agree with you. I am just as worried as you are that
our system can no longer deliver the kind of champions that we
had, like Celtic and Nottingham Forest, or even Aston Villa. Certainly,
we will never see Anderlecht win an European competition probably
ever again if it stays all the same; I mean if there are no changes
that come in to change the picture, especially in the national
leagues because today practically you have six or seven national
leagues that financially support their clubs and all the others40
or so in Europeare struggling. I can think of Sweden, for
example, that Malmö was in the final against Nottingham Forest.
I cannot see any circumstance that, under the current system,
could see Malmö in the final of a European competition ever
again, and that is quite sad.
Damian Collins: Yes. I
could go on but I must hand over.
Q732 Mr Sanders:
There are conflicting messages there because on one hand you are
saying that the money in the Champions League is only worth 10%
to the Manchester Uniteds of this world, but in reality it isn't
the money that is attracting the Manchester Cities and Manchester
Uniteds, it is actually the worldwide reach that comes from being
the champions of Europe. That is where the American buyers seem
to be coming in because in America if you own a sporting enterprise,
whether it is American soccer or baseball, it is pretty restricted
as to how you can expand your market, whereas with football it
is the truly global sporting game. That is why Manchester United
have expanded into the far east and India. Throughout Africa,
you will find Manchester United shirts, Chelsea shirts and nowadays
Manchester City shirts. I don't think we have seen any Ajax shirts
or Boston Red Sox shirts. The leveraged buyout seems to have been
a consequence of that attraction and you don't seem to be doing
anything to stop leverage buyouts. I wonder if UEFA said, "We
would not allow a club that was the subject of a leverage buyout
to enter a European competition" you would actually end leverage
buyouts at a stroke. Have you ever considered that?
We felt that under the subsidarity principle this kind of interdiction
should come nationally. Our system as it is would deal with that
because if a club doesn't break even, that is because of servicing
a large amount of debt, it will end up on the wrong side of the
Financial Fair Play Rules.
In terms of the interest by prospective American
owners, it is quite interesting that both John Henry and Tom DiBenedettoJohn
Henry just bought the consortium that bought Liverpool FC and
Tom DiBenedetto recently bought AS Romasaid that the reason
they were investing in European football was because of the new
Financial Fair Play Rules. It is a much more predictable environment;
more similar to what they are used to in American sports. It is
a more regulated, safer environment than the kind of, let's say,
crazy environmentas they perceived itthat existed
Q733 Dr Coffey:
So, Monsieur Gaillard, when the crunch comes, Man U might have
made a loss, you are very confident UEFA will say, "We appreciate
that but you are staying at home and you are not competing in
our competition"? I am just thinking if you have a politician
running the monitoring system, I think he was Prime Minister of
Belgium whenhow can I say?the rules were flexed
to allow Belgium and other countries to join the euro, are you
saying that Man U
Dr Coffey: if they
continue as they are with their financial position they will not
be playing in the Champions League?
I think the litmus test of whether we are serious or not in implementing
the rules of Financial Fair Play will come on the day when a major
European club will fall foul of the rules. If that day we do not
sanction them with what is in the book, we will have failed. If
we sanction them it will mean that the rules have worked. A better
way for the rules to work is for the club suddenly to be unsanctionable
and complying with the rules and this is our dearest wish. We
don't wish to have to sanction clubs, especially not by excluding
them from our competitions. We wish that they will understand
exactly what they have to do over the next five years in order
to comply with the rules.
Q734 Chair: So
you will apply them with a degree of flexibility? If a club is
heading in the right direction and is giving you assurances that
it is addressing the problem, the fact that they have breached
the rules will not necessarily mean that they will be excluded?
You are absolutely right. Our rules are looking at every single
situation. We already have for the first three years the 45
million flexibility point but we also have different gradations
in sanctions, some may be withdrawal of cash from the Champions
League or Europa League profits, ending for really serious cases
with exclusion from competition. So we have, let's say, a slope
that leads to hell, which is exclusion from competition, but our
wish is never to have to go that far and we will make sure that
the sanctions are appropriate to the kind of violations that we
Q735 Chair: You
say your wish is never to go that far. You said earlier that people
will only see that you are completely serious about this when
a major club is excluded. So in order to demonstrate your seriousness
you are going to have to exclude somebody.
We may get into a situation when unfortunately one or two clubs
don't believe that we will apply the rules, and this is when we
will have to make one or two examples. Right now our dialogue
with the clubs tells us that they all understand the kind of situation
that they are facing, that the Financial Fair Play Rules are a
big help in managing their expectations and the expectations of
Q736 Chair: But
you expect that there may well be a situation where you are going
to have to exclude a club at some point?
Yes, we have to be ready for that.
Q737 Chair: In
relation to a question from Adrian you have talked about debt,
that essentially UEFA accepts the subsidarity principle. You have
also indicated that you are not very happy about the number of
clubs being bought by overseas owners. Is that something again,
while you may not like it very much, where you don't feel there
is anything you can do about it?
I think our President stated it clearly. He said, as far as he
was personally concerned, he didn't like very much the idea of
a club having a foreign owner, a foreign coach and foreign players,
but he knew that he could do nothing about it and this was the
situation, the way football has evolved, and so be it. We are
absolutely neutral, in terms of our regulations, as far as who
owns the club, who manages it, who plays for it. Let's say we
are agnostic on the matter.
Q738 Damian Collins:
But didn't he play for Italy himself?
Yes, he did, but he said, "Always I left when I was 27",
Q739 Chair: But
if one looked at the German model, the 50 plus one rule that essentially
prevents it, you wouldn't suggest that that was a better model
or that kind of restriction might be implemented elsewhere?
We feel that what is good in the German model, and some other
models, is supporters' participation, because in the end the identity
of a club is its own fans. When you have a foreign owner, a foreign
coach and mostly foreign players, what is left that is local?
The history, the spirit of the club is based on its supporters
and the identity of its supporters. Therefore, we feel that what
is really positive about the German models, and other models,
is the fact that supporters are involved in club management and
in many cases own club equity.
Chair: Since we are on
the question of supporters, I might go to Adrian who wants to
Q740 Mr Sanders:
What role if any should supporters' trusts play in the governance
arrangements of their club?
We have taken steps at UEFA to financially support an organisation
that is British based to Supporters Direct, and they are implementing
for us a project in 14 different European countries where they
are encouraging, helping and teaching supporters the virtues of
supporters' trusts and participation in the ownership of their
clubs and in the management of their clubs. We think that Supporters
Direct in England and Scotland have done a fantastic job at rescuing
clubs, but also at injecting a lot of rationality and positive
supervision, thanks to their participation in club boards.
We are also a little bit worried that the financial
future of Supporters Direct is not safe. I think they have received
around £4.5 million over the years in terms of direct funding
from public sources, Premier League and the FA. That has generated
over £60 million of funds for clubs through supporters' trusts.
Our experience with them is that they are highly qualified and
determined people with an excellent track record in managing projects,
and we feel that if the experiment is to succeed it cannot be
left to just a bunch of volunteers who would basically give some
of their time to the cause. We need a core organisationa
small one albeitto run Supporters Direct. We do our part
with the European side and I think it would be a tremendous loss
for English football if this great experiment, which has already
given so much to this country's football, was discontinued or
was less efficient than it has been just because of a lack of
Q741 Mr Sanders:
Are there any examples of successful supporter ownership in Europe
FC Barcelona is not a bad example.
Mr Sanders: It is a fairly
exceptional one, though.
Real Madrid is also a supporters' trust. Many German clubs include
supporters' ownership. There are other examples is in Spain of
supporters' trusts, but I think what, for example
Q742 Mr Sanders:
How are their umbrella organisations funded?
In the case of the Spanish they are co-operatives, so they are
completely independent. They have a long tradition of it. They
Q743 Mr Sanders:
They are not supporters' trusts, though, are they?
They are different. Yes, they are co-operatives.
Mr Sanders: They have
Yes, exactly, but the way it has developed in England and the
way we feel we can help it develop in a place like Italy, for
example, which is very interested in the model, is through the
supporters' trusts model. It is a lot easier than starting another
Real Madrid or FC Barcelona in a different country, just because
the idiosyncrasies of the Spanish situation are not easy to reproduce
Q744 Mr Sanders:
Is there a Supporters Direct in Italy and, if so, how is that
funded compared with the one in the UK?
Yes, right now through our funding of Supporters Direct Europe,
which is really a branch of Supporters Direct UK, we have been
able to help a number of Italian clubs set up supporters' trusts
and in the next few years we will be intensifying our efforts
in order to do so. Also we have created in our licensing the post
of Supporters Liaison Officer for clubs in Europe. Clubs that
want to compete in European competitions down the line will need
to have a Supporters Liaison Officer that will connect the club
better to its own fans.
Q745 Mr Sanders:
Where is the funding coming from?
The funding is coming from us.
Q746 Mr Sanders:
So not from the public sector in Italy?
No. Well, in Italy there has been a lot of public sector funding
for clubs. For example, most of the stadiums are owned by municipal
authorities. So in the past it has been in quite a few European
countries, much less now, some public funding for clubs.
Q747 Mr Sanders:
You would not want to compare the state of the grounds in Italy
with the state of the grounds in the UK
Mr Sanders: today,
It is one of the Achilles heels of Italian football, the fact
that public authorities no longer have the kind of money that
will allow them to even maintain those facilities. This is why
we have introduced in our Financial Fair Play Rules the possibility
for an owner to invest directly outside of the Financial Fair
Play Rules into the renovations or the construction of a football
ground, because we think in this English football is far more
advanced than in other countriesnot all countries but in
most countriesin terms of club ownership which is a very
Q748 Dr Coffey:
Monsieur Gaillard, moving on to sports legislation. I will give
you my personal perspective: there is quite a lot of talk, and
it is referred to in the evidence, about enabling legislation
perhaps would be helpful. England and Wales particularly have
kind of a code of law that is different to the rest of Europe,
in that you don't have permission to do things in this country.
Our law is framed about what you cannot do as opposed to perhaps
the other way round with the Napoleonic Code. But you particularly
refer to you feel that enabling legislation would reduce pyrrhic
turf wars between sports bodies and things like that. Can you
tell me a bit about why you feel legislation would help that,
because my concern is it could all end up with judicial reviews
in the courts?
This is the downside of legislation obviously. I think the intention
of the Government in the UK is to give some time to the football
family to sort out its turf wars and come up with reforms from
inside. At the same time I understand that if this does not come
out as a result of turf wars, then legislation may be enacted
in order to help the process. There is a myriad of legislation
all over Europe, including in this country. You do legislate in
terms of sports or enabling legislation in order to help sports.
The Olympics is a great example of that, but sometimes you need
We feel, for example, that very often in this country
you have many different separate initiatives, let's say like in
the field of grassroots football and player development and player
education, where in most European countries you have one authority,
the national association, that basically oversees all these efforts.
Here it is split between the clubs, the leagues,
the PFA, the FA, which are probably a lot of overlapping efforts,
a lot of redundancy, probably a waste of money, certainly a lack
of streamlining in getting the education done, which is part of
the reason why England is a bit lagging behind certain countries
in football education. I share your doubts about what is the outcome
of legislation but there may be cases where it is unfortunately
necessary for the public authorities to step in.
Q749 Dr Coffey:
Can you think of another example then, perhaps within Europe or
wider afield, where legislation has made that difference as opposed
to challenging the FA, or whoever, to get their act together?
For example, there is legislation in my country, which is an example
I know well, where it is clearly stated what is the role of the
national association, the clubs, the leagues, and so on, and therefore
you avoid the turf wars that have been going on in this country.
Clearly each institution has its responsibilities and that has
been set by legislation decades ago, which avoids conflicts because
in a free-for-all everyone is always trying to encroach on the
territory of the other, which is the normal situation that you
find in the private sector. It is a natural situation, which may
not be the most efficient way to fulfil football's social and
educational obligations to society.
Q750 Paul Farrelly:
I wanted to ask you a few questions about our own football association.
To what extent does UEFA believe that England and Wales has a
strong football association, in the sense of being effective and
setting out a clear direction of the game in these countries?
It is obvious that the turf wars that the Honourable Member was
referring to before, and which is in our written statement, have
damaged English football. In particular today, the English FA
is probably in a weaker spot than any other FA in Europe. This
is probably the result of the overwhelming power of professional
football, especially as expressed by the Premier League and also
the Football League. In other countries you have a more balanced
situation where the status of the governing body that the FA holds
is better protected. The FAs in continental countries tend to
rule over all aspects of football, from grassroots in educational
purposes to professional games going through the national team,
and so on and so forth.
There have been attempts at reforming the FA. We
are all familiar with Lord Burns' report. We have discussed these
matters with the English FA a number of times. I think there is
a genuine commitment to improve the efficiency of the organisation
and to restore a more independent status, and we are very much
in favour of that.
Q751 Paul Farrelly:
When you say some of the other associations are better protected,
in which ways are they better protected?
In most of the other associations the place for the professional
game is not so overwhelming. In most cases it is a minority position
and priority is given to the social and educational role of sports
and, therefore, to the grassroots movement and the local associations.
Q752 Paul Farrelly:
So it is not necessarily about legislation. It is not necessarily
about putting in rules that enforce it. Do we have a problem here
of respect? Does the Premier League have a problem of respect
for the FA that is not present in
I think "respect" may not be the right word. It is a
question of the overwhelming financial power of professional football.
One must realise that English professional football has been tremendously
successful in generating revenues; in projecting itself outside;
in building up an image and we have to be very grateful for the
efforts that both the Premier League and the Football League have
made in this direction.
At the same time it has not resulted in a better
situation for English football in general. The performances of
the national team have not been outstanding and, again, there
are serious deficiencies in football education and in football
development in this country. Now I believe that the method that
has been chosen by the Government, that is to let the football
family try to sort out its problems, and then only legislate if
it cannot, is probably the right one in this respect. But again,
as I said before, it is obvious that sometimes some kind of enabling
legislation that basically limits turf wars between different
echelons of the football family may be helpful if nothing comes
out of the football family's efforts.
Q753 Paul Farrelly:
The Premier League here was very clear in describing the Football
Association as an association of interests. In your terminology,
that defines a turf war. It is an institutionalised turf war.
The Premier League represents the interests of its clubs. The
FA is supposed to represent the interests of all football loving
people in this country. It is about a different situation.
Q754 Paul Farrelly:
When we went to Germany we were quite impressed by the ethos there
that everybody spoke about, in particular their reaction to their
national teams' disappointments in Euro 2000. They told us what
they had done about it, and of course they all have their rivalries
in different levels of the game. When we pushed them on how they
developed their model they were quite open. They said, "We
copied the French". So the question for UEFA, as far as our
FA is concernedjust like the Germans, without putting themselves
down or singling anyone out for particular merit, they said, "Yes,
we copied the French"which country should we best
copy, do you think, in terms of football governance?
You should copy the Dutch.
Paul Farrelly: The Dutch?
Because they have the advantage of speaking English most of the
time. It might be an easier task.
Q755 Paul Farrelly:
Who would be your models of best practice, in terms
I think, as I mentioned, I was recently in the Netherlands and
they have an excellent grassroots model. I think the key issue
is that there should bewhat exists in most European countries
within the FAa national technical director that would be
fully in charge of football development, football education and
grassroots for the whole country, and then of course would delegate
part of the work to the local associations to the clubs, maybe
even to the leagues, but would remain in command of the overall
picture. I think that is what exists in most of the good educational
models in Europe, and that should extend of course to football
education for both boys and girls.
Q756 Paul Farrelly:
One of the characterisations of the FA with the Premier League
is that the taila very big tailwags the dog. The
dog has an awful lot of old whiskers but is determined to hang
on in there, which are the FA Council who can act as a block from
the amateur game on any progress or reform. Do the dogs in Europe
have such old and crusty whiskers generally or are they more professional
You have probably seen it but it is a relative exercise for a
dog to bite its own tail, and sometimes this is what it would
need to do when the tail is wagging it.
Paul Farrelly: I do not
want to get too far
No, there have been situations in Europe that I can easily qualify
in which the amateur game has been perhaps too dominant, and there
have been situations that have been more balanced. I think that
is what should be aimed at. It is obvious today that perhaps the
idea that has been floating around of introducing independent
directors can be a positive one. The model that is being fostered
by the Burns report is not completely compliant with, let us say,
FIFA statutes because the election process is reduced to a minimum.
The chairman is basically selected by a committee of head hunters
and then it is approved. The election process is just that approval
process. So it is not completely compliant with FIFA statutes.
At the same time most people are telling me that
this is the best way out for England, the best way to reform itself.
I am no authority in judging who is right. I would tend to listen
to the local people because they know their situation better than
we could from across the Channel.
Q757 Paul Farrelly:
Time is moving on, I only have one final question. You talked
about the grassroots and if we take Spain, Spain is a country
that has two clubs which sell their own TV rights, which are very
dominant. Yet, by the same token, we have seen the Spanish team
develop and Spain is held as a paragon of virtue in terms of the
coaching and the development, all the way up from the grassroots.
Whereas we, on all the statistics, from the national team to the
number of coaches and youth development, seem to have lagged behind.
Why are we not as good as other countries, like Spain and Europe?
I think Spain is a paradox in many ways because in some ways maybe
the dog has lost its tail in Spain. We have on the one hand this
domination of two clubs, which again has been there for decades,
and on the other hand we have a strong FA that does not really
get itself involved too much in the professional game but on the
other hand has developed a tremendous education system with branches
all over the country; very centralised with a great technical
centre near Madrid in Las Rozas, and with overwhelming results.
I think for men they have won all different competitions in Europe
that there are to win; less successful with women. Germany is
the real model there.
Q758 Paul Farrelly:
Why have we not been so successful, what has held us back?
I think this is what I was pointing out to you before: the lack
of streamlining; the lack of a single authority over football
education and development; the weakness of the FA in this sense;
the fact that there is no national technical director; the fact
that the FA, the different leagues, the PFA, run their own show
as far as football education is concerned, and that is a weakness.
Chair: Do you want to
do youth development?
Paul Farrelly: I discussed
Chair: You don't want
Paul Farrelly: No.
Q759 Chair: In that case,
Mr Gaillard, can I thank you very much.