Written evidence submitted by the Centre
for the Study of Law, Society and Popular Culture, University
of Westminster
SUMMARY
Key findings:
— the
law, and regulatory structures, need to be framed differently
when dealing with areas of culture and in particular should take
account of the "specificity of sport" and clubs' roles
in their communities;
— there
is a danger that we are left with a governing body that the government
has very little financial or legal leverage over, and some serious
doubts about whether football can adequately regulate itself;
and
— serious
consideration should be given to the role of fans within these
processes both as consumers of a sporting-cultural product and
as a group capable of owning and running a community asset.
SUBMISSION
1. We note that there have previously been a
series of reviews and reports looking at football, and particularly
looking at issues of governance in football. The Burns Report
(2005) for example made a series of recommendations such as the
creation of a new FA Board and a widening of representation on
the FA Council. The Burns Report was ratified by the FA Council
in 2006. Similarly, in 2009, the All Parliamentary Football Group
(APPFG, 2009) published the results of their inquiry and made
a series of recommendations on issues such as FA Governance, club
governance and the fit and proper persons test, and supporter
involvement amongst other things.
On that basis there is much useful previous material
to consider, but it appears to us that, rather like Lord Taylor
when noting that "it is a depressing and chastening fact
that mine is the ninth official report covering crowd safety and
control at football grounds" (Taylor, 1990, 4) it is of some
concern that much of the good work and solid recommendations in
previous reports have not been fully implemented or considered.
Rather than go over this ground, we have attempted to look at
the Six Specific Questions for the Committee, and have decided
to concentrate on the areas where we feel we can add something
new, or perhaps give a different perspective, rather than spend
time excavating old ground. That said we are in broad agreement
with many of these previous recommendations, such as the principles
of accountability and transparency (see APPFG, 2009, 3-4) and
suggest on this basis that policies such as full financial disclosure
of transfer agreements, and of payment to agents, are fully developed.
In terms of the submission, we have concentrated
on the following questions posed by the committee:
2. Question 1—Should football clubs
in the UK be treated differently from other commercial organisations?
This question is one that is important not just for
football, but for other parts of the cultural industries more
generally. Essentially, the argument would be that there is something
different or atypical about these areas that necessitates a different
approach being adopted towards them. An oft made point as regards
football is that the relationship between the supporter and the
club is not one that can be evaluated as a normal market transaction.
One side of this is that the fan is potentially subject to exploitation
because of the fact that "brand loyalty" to these clubs
means that there is no real alternative to what is consumed as
there may be in other areas (Hamil et al, 1999 & 2001).
Whilst the club plays a crucial role within football, both in
terms of a focus for the team but also more broadly in terms of
its role within the wider community, its position and role allows
it to "capture" supporters.
More broadly, there have previously been arguments
made that sport should be treated differently by the law. There
is much European case law concerning the applicability of competition
law to sport for example, and whether sport should be treated
as a business (and therefore subject to the relevant legal
framework on free movement etc) or instead be dealt with as something
different. The positive benefits of sport, and the role it can
play in terms of contributing to "smart, sustainable and
inclusive growth" is made clear in the European White Paper
on Sport (2007), and further developed in the more recent Developing
the European Dimension in Sport (2011). As such it is clear that
there is something specific about sport that necessitates an approach
that can protect and nurture this. This has been at the heart
of arguments suggested sport is a special case, such as those
arguments propounded in case law such as Bosman for example.
This ties in to wider calls for areas of culture
to be treated differently to commercial areas. For example, independent
record labels have been championed and celebrated for offering
cultural diversity in contra-distinction to the approach of the
"major" record companies that focus upon largely commercial
considerations (see Peterson and Berger, 1975 and 1996; Chiscenco,
2010). In areas of high cultural industry concentration there
were found to be low levels of diversity, and on the basis that
diversity should be supported where possible, Chiscenco made a
strong argument for the need for a new jurisprudence in relation
to mergers and acquisitions in cultural industries. Effectively
Chiscenco argues that new competition rules are needed to address
the specificity of culture. If we understand sport as being part
of culture this approach has much to recommend it in the context
of football.
A related point to the atypical fan/club relationship
is that there are a number of key differences between sport and
ordinary businesses. First, sport clubs may not actually have
profit as their main aim, but may have broader more socio-cultural
objectives. Secondly, all clubs in a league are interdependent.
Whilst in an ordinary business environment a firm is better off
the fewer competitors that survive, in sport generally, or football
specifically, all clubs are dependent on other teams doing well
to ensure uncertainty of outcome and the issue of competitive
balance is highly critical; some competition is needed for the
sport to succeed and indeed competition is necessary (see generally
Szymanski and Kuypers, 2000). As Gratton notes (2000, 12);
"The conventional textbook firm in economic
theory has an interest in increasing market power and ultimately
it maximises its own interest (and profit) when it achieves maximum
market power as a monopolist. In professional team sports once
a team becomes a monopolist, revenue would disappear altogether;
output would be zero since it would be impossible to stage a match".
The arguments above all support our contention that
the law, and regulatory structures, need to be framed differently
when dealing with areas of culture. It is apposite here to
look at Question 5 set by the Committee as this allows us to elaborate
on the issues raised.
3. Question 5—Is Government intervention
justified and if so what form should it take?
As noted above, Question 5 overlaps or intersects
with Question 1. The debate around whether Government or independent
intervention into sport is appropriate is a well-worn one. Foster
(2000) for example argues that there are a number of elements
to the debate as to how sport should be regulated. One is a debate
about the provenance of sports law and whether law should "cross
the touchline", and one view of this is that sport has its
own constitutive framework and that this should not be disrupted
by external legal intervention. Another is a wider debate about
the nature of regulation and whether certain industries should
be self-regulating or whether there should be statutorily backed
regulation.
If we look at the area of media more generally, and
in particular the regulations of the press and the advertising
industries, we see that they are partly viewed by the industry
as a public relations exercise designed to show external bodies,
such as Parliament, that legislation is not necessary to regulate
them. As Robertson and Nicol (2007, 757-8) note:
"Press proprietors are prepared to invest £1.5
million each year in the PCC (Press Complaints Commission) because
its existence offers a form of insurance against new laws to safeguard
personal privacy, prohibit chequebook journalism and to guarantee
a right of reply .The advertising industry funds the ASA (Advertising
Standards Authority), to a tune of more than £3 million annually,
to avoid exposure to laws against deceit and indecency".
This approach can also be partly seen in the responses
of the football industry to the Task Force recommendations concerning
the need for an independent regulator. A key problem in terms
of the regulation of football is that there is a danger that we
are left with a governing body that the government has very little
financial or legal leverage over, and some serious doubts about
whether football can adequately regulate itself—this provides
further weight to the argument that the role, extent of powers,
and effectiveness of the Independent Football Ombudsman ought
to be revisited and reconsidered.
4. Question 6—Are there lessons to be
learned from football governance models across the UK and abroad,
and from other sports?
The Burns Report, in its structural review document
(A Review of Comparator Sporting Organisations) presented a number
of findings concerning sporting organisations and governance both
within international football and in other sports. We do not propose
to go over this ground here. One thing that is of interest however,
is the role of fans within these models. Even though English football
is extremely popular in terms of live attendances and TV audiences,
there is evidence that other forms of relations between fans and
clubs have also proved fertile. German football is a huge success,
and has managed to keep prices at a more modest level. In some
smaller countries like Norway, Supporter Associations have developed
both formal and informal relations both at the club level and
the national federation level. This means, among other things,
that fans are consulted when it comes to several questions relevant
to them, like pricing policies (members of supporter associations
often enjoy very favourable prices). Further, the apparent contradiction
between "fans" and "families" with regards
to how these groups apporach a football event, has not led to
significant conflicts. Rather, it seems that the atmosphere and
the spectacle created by supporters have been constructive rather
than destructive in attracting new groups of spectators, and that
serious consideration should be given to the role of fans within
these processes.
In addition, we are hopeful that the new UEFA licensing
rules will help to promote good governance at club level amongst
all top flight teams and those aspiring to compete in European
competition. We would argue that financial stability should be
encouraged and promoted along these lines.
For more on this see:
http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/01/50/09/12/1500912_DOWNLOAD.pdf.
Mechanisms such as these are of particular importance
to football as the financial controls operated in other sports,
such as salary caps in both codes of rugby, are unlikely to be
workable in football because of the greater internationalisation
of the labour market and the impossibility, and possible illegality,
of setting a pan-European cap.
We hope our submission has been of some use, and
are happy to discuss anything arising from this or further develop
these points if the Committee wishes.
SOURCES
Burns, Lord (2005) FA Structural Review.
Chiscenco, O (2010) The Record Industry and Competition
Law in the Twenty first Century University of Westminster,
unpublished PhD thesis.
Developing the European Dimension in Sport COM (2011)
12 final, 18.1.2011.
European White Paper on Sport COM (2007) 391, 11.7.2007
Foster, K (2000) "How can sport be regulated?" in Greenfield,
S and Osborn, G (2000) Law and Sport in Contemporary Society
Frank Cass: London.
Gratton, C (2000) "The Peculiar Economics of
English Professional Football" Soccer and Society
Volume 1, 11.
Hamil, S, Michie, J & Oughton, C (1999) A
Game of Two Halves? The Business of Football Mainstream: London.
Hamil, S, Michie, J, Oughton, C, and Warby, S (2001)
The Changing Face of the Football Business. Supporters Direct
Frank Cass: London.
APPFG (2009) English Football and its Governance
All Party Parliamentary Football Group.
Peterson, R and Berger, D (1975) "Cycles in
symbol Production: the case of popular music" American
Sociological Review 40, 158-73.
Peterson, R and Berger, D (1996) "Measuring
Industry Concentration, Diversity and Innovation in Popular Music"
American Sociological Review 61, 175-178.
Robertson, G and Nicol, A (2007) Media law
(Penguin: London).
Szymanski, S and Kuypers, T (2000) Winners and
Losers. The Business Strategy of Football (Penguin: London).
The Taylor Report (1990) "Lord Justice Taylor,
the Hillsborough Stadium Disaster Final Report" HMSO:London
Cm 962.
January 2011
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