Culture, Media and Sport Committee - Minutes of EvidenceHC 509-I

Back to Report

Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 17 July 2012

Members present:

Mr John Whittingdale (Chair)

Dr Therésè Coffey

Damian Collins

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

________________

Examination of Witnesses

Witnesses: Malcolm Clarke, Chairman, Football Supporters Federation, David Lampitt, Chief Executive, Supporters Direct, and Tom Hall, Head of England and Wales, Supporters Direct, gave evidence.

Q78 Chair: Good morning, everybody. This is the second session of the Committee’s follow-up to our report on football governance, to take account of the joint response produced by the football bodies. For our first session I would like to welcome Malcolm Clarke, the Chairman of the Football Supporters Federation, David Lampitt, the Chief Executive and Tom Hall, the Head of England and Wales, Supporters Direct. Since one of the original areas that we concentrated on was on the involvement of supporters in the governance of the game, can I ask you perhaps to give a general comment to begin with about what you found most encouraging and what you found most disappointing in the joint response?

Malcolm Clarke: Thank you, and thank you for the invitation. We identified only two recommendations out of the 33 that you made that we felt might have been deemed to have been implemented properly in the proposals. One of them was a more structured approach to supporter representation. In that sense, we welcomed the principle of that. However, it is totally lacking in detail at the moment. I am talking about supporter engagement at both the national level, through the structures of the FA and the leagues, and the club level. Certainly there are some things in there that indicate a good direction of travel, but there is no detail. What we want to see is this written into rules and we want to see what the rules say, because I am bound to say that some of the history of it is not good, to put it mildly. So I would give it a cautious welcome, subject to what the detail is.

David Lampitt: I would echo that. Thank you for inviting us back and giving us the opportunity to make representations again. I would echo what Malcolm has said. There is reason for cautious optimism but, at the same time, I think the lack of information about the timetable for making any of the changes that are potentially being proposed and the lack of detail about how those are going to be put into practice is still cause for concern and cause for concern for this Committee, in terms of seeing that those recommendations that we say are very welcome are put into some meaningful effect.

Q79 Jim Sheridan: My question is to you, Malcolm. What single change do you think would have the most positive impact on the game from the perspective of the supporters? Also, how important is it to the average football supporter to have representation on the bodies of football and regarding the details of it?

Malcolm Clarke: The single most important change is quite a difficult question to answer because there are so many. Obviously, the single most important thing that most supporters want is a guarantee that their club is going to be there and operating as a stable business in the future and that it is not run by people who do not have the best interests of the football club at heart and/or are not very competent at running it. When we have had 92 insolvency events since 1992, the history of that is not good. Turning more specifically to supporter involvement, we would like to see, as I have just said in the previous answer, some meat behind these proposals to see that at club level there is meaningful supporter engagement and ownership-David can speak a bit more about the particular involvement in terms of shareholding and things like that-and, at the national level, that the engagement means something because this is not like a normal, commercial industry. We are talking about institutions here that are part of the cultural heritage of their areas, and that is why the engagement of the supporters is so important.

Q80 Jim Sheridan: You seem to be suggesting that people who are in charge of clubs or buy clubs should be fit and proper persons. Last week Mr Scudamore suggested that the FA-and unfortunately not the SFA-have very robust measures in place to deal with the fit and proper persons issue. Is that correct?

Malcolm Clarke: Again, I am sure David can comment in a bit more detail on this. I would say that it is better than it used to be because at least we do now have some tests. I can remember being told in Lancaster Gate, when I first got involved in the supporters movement, by the then representatives of the FA, that having a fit and proper persons test in football would be completely impossible and inappropriate. We have moved on since then, but we want to see it stronger and you can make your own judgments about whether some of the people who have had control of our major clubs have been fit and proper people. Probably there is nobody better than David, as the former chief executive of Portsmouth, to comment on that. We would want to see it even stronger than it is now and we would also want to see it consistent, but some progress has been made.

David Lampitt: I agree with what Malcolm has said. The important thing from our point of view is that, in order to deal with some of these difficult and complex issues, there has to be a package of measures and it cannot be a cherry-picking exercise. Again, that comes back to our concerns about the responses from the football authorities in doing some things but not others. The package has to be right. The package has to be forward-looking financial controls over football clubs as part of a licensing regime. I would say that is possibly the one thing that I would like to see coming out of the recommendations in a meaningful way, and independently overseen, but that has to be backed up by other measures such as a robust ownership test.

Q81 Jim Sheridan: Supporters on the Board would have a positive impact, do you think?

David Lampitt: We say, absolutely, supporters on the Board would have a positive impact, but we recognise and part of our submissions to the Committee is that there has to be a progressive relationship between supporters and clubs and there has to be improved engagement. Part of what we have set out is a pathway for that to happen so that supporters can become more involved. We see that as an important part of what supporters can bring in terms of value to the game. They can offer vigilance at local level over what goes on at their football club. That has been described in the past as a kind of shadow equity involvement, because there are lots of clubs where supporters cannot buy shares; they are not openly available. They might not necessarily get a seat on the Board, but there is some space for supporters to provide value by having that oversight and vigilance role.

Q82 Steve Rotheram: Mr Scudamore described the changes to the new structures of football as extremely radical and progressive. To what extent do you believe the proposed changes to the governing structures address the issue of complexity and lack of transparency, and do you agree with Mr Scudamore that the systems are necessarily complicated and complex?

Malcolm Clarke: We are talking about the football authorities’ response here. Well, they are certainly complex. I do not agree that they are necessarily complex-I do not agree that they have to be. Unfortunately, what seems to have happened, in my perception, is that the focus that has been put on the composition of the FA Board, particularly the numbers-and I do not think it should be a numbers game, it should be a balance game rather than a numbers game-has rather deflected attention from the fundamental issue about the roles of the respective three bodies. I am bound to say it is partly a consequence of the Government asking for a joint response from the three authorities, because this confused the role of the three authorities, because the governing body of football in this country is the FA, as laid down by statute and by FIFA statutes where it says that the leagues are subordinate to the FA.

So it confused the position to ask for a joint response, so that what we seem to have is a response that everybody can agree with. But what has unfortunately happened, in my view, is that a great many key issues of responsibility have now been set either completely out of the remit of the FA in certain financial matters and other matters or deemed as issues that the FA Board can only decide with the agreement of the Professional Game Board or the National Game Board, as appropriate. In governance terms, it is very odd that the board of an organisation cannot do certain things unless one of its subsidiary committees agrees. That is the first point.

The second point is that it is potentially a recipe for paralysis, because the Professional Game Board, under the proposals, will have one vote for the Premier League and one vote for the Football League. So they would have to agree for the Professional Game Board to agree, and then the main board would also have to agree. It is a bit like a three-legged tripod where all three have to agree before anything can happen. But our fundamental point is that so many of these issues affect the whole game, including the financial issues, that, at the end of the day, it should be the governing body of the game that has ultimate responsibility. It has certainly added to the complexity, I think, but not in a way that is satisfactory and progress on the Board has been achieved at the expense of taking away responsibility from the Board in key areas, which I do not think is what you intended. That is my perception.

Q83 Steve Rotheram: Before we move on, do you deny or contend that the changes have been either progressive or radical?

Malcolm Clarke: I think they are radical in the rather unfortunate sense that, to use a phrase that I used to the FA Council last week, in terms of the role of the FA, I described it as the greatest betrayal of a birth right since Esau. It is radical in that sense, but I think it is unfortunately radical and, from the perspective of the FA, I think that is extremely unfortunate.

David Lampitt: I have to say I am not convinced that the changes are particularly radical. I think the thrust of the recommendations from this Committee were about simplification of the processes and about better balance in the decision-making bodies to bring about better decision making. On both of those counts, I am not convinced that much progress has been made, based on the recommendations that have come forward.

I accept Mr Scudamore’s point that there is necessarily some degree of complexity in the arrangement of the regulatory structures within the sport, but the key issue-and I will come back to it-is one about the balance of decision-making authorities. I agree with Malcolm that our concern over what has been put forward is that, while there may be some changes proposed in relation to the structure of the FA Board, that has been married up with a devolution of decision-making powers to the bodies below that Board, which do not have the same balance that is now being put in place in the FA Board. So we will make some changes to the FA Board to create a better balance there, but we will devolve significant elements of the decision-making issues, particularly around licensing and the financial regulation of the game, which again were a focus of this Committee, and take those into the bodies that do not have that balance.

Q84 Steve Rotheram: But you agree that there is some necessary complexity and is that because the FA is both a regulator and a multi-million-pound business? The second part of the question is, are those two roles compatible, or should they be separated further for the sake of the game?

David Lampitt: Is that the reason for complexity? I think the reason for complexity is that the FA oversees a multi-faceted game played by many, many people, but played at lots of different levels. Each of those levels has different sets of challenges, from a commercial point of view and from a regulatory point of view. That would be my response on that point. In relation to the second point about the representative nature of the decision-making bodies, I can only come back to the point I made a moment ago, which is that I think getting the right balance in those bodies is the critical aspect and, in the way in which the proposals have been put forward, I am not convinced at all that that balance is going to be improved by what has been put forward in the responses of the authorities.

Q85 Steve Rotheram: In your response, you spoke of simplification. It seems that you are allowing the excuse to be made that it does need to be necessarily complicated because of those factors. Is that a contradiction?

David Lampitt: Possibly there is a contradiction. It is not intentional. There can be simplification within the structures that exist. I guess I am excusing a certain level of complexity because it is necessary based on the nature of the game. Within that necessary level of complexity, I think things can be simplified; but for me, as I say, it is more important that the decision-making bodies are constituted in a balanced way to enable better decision making. That had to be the key outcome. Even if you accept that there is a level of complexity, having the right balance in those bodies means there are good, independent strategic decisions being made on behalf of the football authorities. It is the critical factor.

Malcolm Clarke: Can I add a quick comment to that? I think simplification is a difficult word. Clarity is clearly desirable and, on occasion, separation is desirable, and the business elements of the FA in some respects should be separate from some of the other activities. Unfortunately, with the football authorities’ proposals, the clarification about who does what has resulted in key issues being delegated down to a lower level where, as David said, it is inappropriate. In effect, the regulated will become the regulator under these proposals and that is what we are unhappy about.

Steve Rotheram: I think we have some questions that will be asked of the FA.

Q86 Mr Sutcliffe: Obviously, a key issue is the FA Board, and, in the joint response, they said that this would be an opportunity to enable the Board to delegate decision making to the most appropriate body, avoiding the duplication that currently exists. I think we all agree that the status quo is unacceptable. But how convinced and confident are you, notwithstanding the remarks you have just made, about the Board reducing in size, as per the aspiration in the joint response? Do you think that will happen? For instance, Mr Scudamore told us that the Premier League had three places. They are now going down to two. Do you think that will ever get to the position of having a board that is able to meet the requirements of the joint response?

Malcolm Clarke: It has just been reduced by non-replacement of vacancies from 14 to 12, and the authorities, in their response in February, said they would reduce it to between eight and 12 by approximately a year from now. If nothing changed now, that commitment would have been met. As I said earlier, I do not think that numbers are as important as balance. A slightly larger board with a better balance, in my view, is better than a smaller board with the wrong balance. That is the key issue and we are a long way from the kind of balance that you proposed in your report. The other two issues are, first, what the Board can do-which I have already dealt with a minute ago, so I will not repeat that-and the second is accountability.

There needs to be a structure, as there is in any organisation, where there is effective scrutiny and accountability of what the Board is doing. I would accept, personally, that the FA Council, for all its merits and there are many merits of it, because of its size and structure is not a particularly effective way of holding the Board to account. The problem is, that is not effectively addressed in the football authorities’ proposal. What they do is to take the FA Council out of the equation to a certain extent by making it meet less often and not replace it with any other system of effective scrutiny or accountability. That is the other area of concern.

I would also like to put on record, as a member of the FA Council, that our concerns are very largely around the relationship with the professional game and the problems that professional clubs have experienced. I would like to put on record that many of the things that the FA is now doing-St George’s Park, on the development of youth football, on the development of women’s football and other areas-are excellent and I would not want it to be thought that we have a blanket condemnation of what the FA does. There are some excellent people working there and some excellent work being done in those areas. It is this interface between the role of the governing body and the position of the professional clubs, given the history of financial problems that we have seen, that is our major area of concern.

Q87 Mr Sutcliffe: But you would not see the FA getting involved in ticket prices for clubs and things like that? That, surely, is a matter for the Premier League?

Malcolm Clarke: There clearly has to be appropriate degrees of delegation, yes, and, by and large, I think the answer would be that you probably would not. But the issues of things like parachute payments and financial distributions are issues for the whole game. It is arguable that the gap between the top and the next level, and it goes down, is one of the major causes of some of the financial problems that we have had, because everybody aspires to the next level and have not behaved always in a financially responsible way in order to achieve it.

David Lampitt: I have very little to add. I would simply reiterate what Malcolm said about balance and not numbers. It is not a numbers game. It is about getting the right balance of the right decision makers in there. I would agree on the issue of delegation as well. I think it is absolutely right that there is delegation of certain areas and certain powers and authority from the FA, whether it is to constituent bodies within the FA or whether it is to the leagues as the bodies within the game, but that delegation has to come with accountability. One of the key phrases that I picked up out of the most recent proposals that the FA has put forward in terms of the changes that they are proposing is that, on certain matters, the FA Board would have no authority to decide against the decisions or the recommendations of the PGB and the NGB, the Professional Game Board and the National Game Board. Again, that cannot be right. There has to be delegation, but there also has to be a proper level of accountability and oversight to go with it.

Q88 Damian Collins: Listening to the answers to the previous question, I suppose the mechanism that has been created to try to allow some sort of intervention is the FA Regulatory Authority, if you like, as a sort of guarantor of the licensing system. Do you think it has enough power of intervention, from the way its role and remit has been set out in the recommendations from the football authorities, particularly with regard to intervening on issues like supporters and directors tests, and has that been correctly applied by the different leagues?

David Lampitt: Again, I think it comes down to the devil being in the detail on this because, as I understand it, the proposals are that the FARA, newly constituted, will have overall oversight of, for example, the directors and owners test, which most would say is a good thing. There can be a consistent approach and a consistent standard applied across the game rather than what has happened hitherto, which is a test being applied by the Premier League and a slightly different test being applied-or, even if it is the same test, there is the opportunity for it to be applied in a different way between different constituent parts of the game. That is a positive step.

The concern again comes back to the overall authority for certain other areas. You mentioned licensing and my understanding is that licensing as an overall issue will be, certainly from the point of view of the policy and indeed from the point of view of operation, delegated through PGB as the decision-making body on policy matters affecting the Professional Game, and will be delegated to the leagues to implement. Again, in terms of accountability on implementation and on policy development, potentially it is not ending up in the right place. That is why we say, until we have seen the detail of exactly how this is going to pan out, it is very difficult for us to welcome the changes. In fact, we probably have an equal number of concerns about the changes as we had before as to whether they are answering the recommendations from this Committee.

Q89 Damian Collins: With regard to the financial performance of the clubs, do you think this is an area where a regulatory authority should have reasonable powers of intervention if it feels that the leagues are not taking early enough action or appropriate action against a club that is clearly getting into financial difficulties? In some ways, that seems to be at the heart of the German licensing model.

David Lampitt: Can I just clarify? Are you saying should there be a level of intervention in the clubs or are you saying should there be a level of intervention for an overarching regulator if the leagues are not seen to be intervening quickly enough?

Damian Collins: Yes, the latter.

David Lampitt: That probably comes back to the answer I gave a moment ago, which is about accountability. Ultimately, there has to be that overarching responsibility-and empowerment or authority or whatever you want to call it-that rests in the overall governing body that is able to act with a reasonable degree of independence from the club owners who run the leagues, effectively, and are the shareholders of the leagues. I think that separation is important. Having said all that, I think we have to also recognise-and one of the things I would certainly commend on the record and I am sure the representatives from the leagues will talk about this in more detail-the steps that have been taken, particularly in the Football League, in relation to the financial fair play model that they are adopting, which is absolutely a positive direction of travel that we see as representing a move to a more sustainable model for football generally, and that has to be right.

Q90 Damian Collins: I suppose you mean some of the frustration of fans of clubs that are in difficulty and, certainly where the ownership of a club is uncertain, the frustration seems to be that there is no redress. Obviously the Football League is not going to intervene when Leeds or Coventry City change structures or get clarity. There is no one to go to, and I think it would be desirable if this authority had that sort of power in that case or at least the power to intervene if they chose to.

Finally, I wanted to ask you, we recommended the abolition of the football creditors rule in our report. The Football Authority has ignored that recommendation in their response. Do you feel, as representing supporters’ groups, that it would be a positive step to remove this rule, which obviously affects community organisations, community businesses, more than probably any other type of creditor?

David Lampitt: Yes. If I could just add one final point on the previous question, I think, in terms of intervention we would definitely say, without a shadow of a doubt, that intervening and therefore prevention in some way is better than sanctioning at the back end when things have gone wrong. Therefore, I think that has to be a more appropriate way of regulating overall. You referred to the German model and that is effectively the model they operate.

In relation to the football creditors rule, it is obvious from the evidence that was given previously and from the evidence that was given last week by Mr Scudamore that there is no moral defence put up in relation to the rule, but there is a sporting defence. We, as supporters, have to be careful not to commend the abolition of something without being constructive in looking at alternatives that could be put in its place, alternative ways of dealing with the issues that it sets out to protect against. For me, if there was a move towards proper investigation involving those supporters groups and local businesses who are, as you say, affected by this on the ground then I think that would be an incredibly positive move.

We do not say anything against the recommendations of the Committee, in terms of the fact that the rule is unfair-it supports or it props up an irrational business environment where there is a safety net, effectively, for more reckless spending. If the rule were taken out I genuinely believe that part of the response from clubs would have to be, "Well, in order to know that we are dealing with a club that is solvent and able to continue trading, we would need a proper licensing system". So the two things go hand in hand.

In that respect I will come back to the point I made about the package of measures. I think it is hard to deal with each of these things in isolation and cherry-pick things that might work or might not work. I think you have to look at all of those things in the round.

Q91 Damian Collins: In short, do you think football would be better off without the Creditors Rule, even if that meant there had to be a period of transition while it was being phased out?

David Lampitt: I think that would depend upon what happens in its place or how you respond to the removal of the rule. If the response is a better licensing system that protects against insolvency and, therefore, protects against the very issue that the football creditors rule sets about to protect, then yes, that is a positive step. I think the other thing we put in our submission this time around is that, in relation to recommending alternative measures, I genuinely think there are things that can be done and should be looked at as a matter of urgency; simple things like relegation clauses and having those enshrined as part of the collective bargaining agreement. So every contract has an agreed percentage for relegation clauses, which means that the significant financial burden that clubs carry with them when they get relegated and which is often one of the key factors in a club’s insolvency can be managed in a different way. There are other ways of doing it. That is all I am saying. There are other ways of doing it. They need to be explored, and the rule itself has had its day.

Malcolm Clarke: Can I just give a quick response to your first question and it relates to the other answers. The content, even of the FA club licence, which is the first rung of the licensing system, is in the category of decisions that the FA Board cannot take unless the Professional and National Game Boards agree. The issue of commercial and financial matters relating to the operation of clubs is in the category that is totally outside the remit of the FA. I think that is the answer. That is not, in our view, the right way to approach this.

Q92 Damian Collins: But the FA must have some oversight of commercial and financial matters?

Malcolm Clarke: Yes. Delegation and subsidiarity are fine. Abrogation of responsibility is something completely different.

Q93 Dr Coffey: The most recent club to be taken over by the supporters’ trust is Wycombe Wanders and, in the context of licensing, I guess in order to balance the books they said they basically had to scrap their youth scheme. They will be the only League club without a youth policy. Is that a price worth paying for Supporters’ Trust involvement?

Tom Hall: They have changed that now. They have managed to find some funding to ensure that the academy continued-

Dr Coffey: Is that in the last few days?

Tom Hall: In the last week or so.

Q94 Dr Coffey: In the last week. What is the lesson that Supporters Direct and other organisations can give to supporters’ trusts wanting to take over clubs?

David Lampitt: I think probably that highlights one of the key elements of our evidence the first time round. The reason we feel strongly as an organisation about governance structures that promote sustainability is that, when supporters manage to get into a position of ownership of a football club, they are operating in an environment that is not sustainable, and yet they are trying to operate on a sustainable basis. So they are competing against other clubs, broadly, that support the benefactor model through the pyramid, which makes it almost impossible to compete and, therefore, they have to make these sorts of difficult decisions that most other clubs might not make in different contexts.

Q95 Dr Coffey: I am a little bit surprised by that answer. I thought one of the whole reasons supporters’ trusts would want to take over is to make sure, obviously, the club is viable, but also to support their local players and their youth. But, anyway, thank you.

Malcolm Clarke: Could I just pick up the question of youth development generally, because I think this does go to the heart of some of the issues that you addressed last time, where you said that the distinction between the Professional Game and the National Game was not helpful to strategic decision making? Under these proposals, youth development in the Professional Game and youth development in the National Game are clearly separate and they are identified as such, which we do not think is helpful. One of the most depressing sentences in the core group’s latest proposals is the one that says, "Recognising that change is affecting grassroots football holds little interest for representatives from the Professional Game". How depressing is that as a statement from the three football authorities?

I think one of the themes of your previous report was that we need to look at all of these issues in a whole-game approach, including youth development, because it is very difficult to separate them. One of our concerns is that, far from tackling that great division, it has ossified it in a quite unsatisfactory way.

Chair: Jim, very quickly.

Q96 Jim Sheridan: Just very quickly, do you think your organisation is representative of supporters groups? I quote Mr Scudamore-who said an awful lot last week-who said that clubs have a large range of stakeholders and sometimes had a silent majority, which would not necessarily agree with the supporters’ group.

Malcolm Clarke: If it is a silent majority, I do not know how he knows it is a majority. All I would say is, this is an allegation that has been put forward to us many times. I have never seen any evidence from the Premier League, or any other body, to show that a major policy that we have adopted is not agreed with by the vast majority of match-going and, indeed, non-match-going football supporters. If somebody can show a survey of wider supporters that shows on issue X they think A, and the supporters organisation think B, then let them show it. But I have never seen it and, as I say, it is a smear that I am afraid he cannot substantiate.

Q97 Mr Sanders: First a declaration. I am a paid-up member of the Torquay United supporters’ trust, so I am very keen on supporters’ trusts. My question is to Malcolm. You said in your letter to the Minister for Sport in April that you would have to start issuing redundancy notices within the next four months if you could not secure additional funding. Has your funding situation improved?

Malcolm Clarke: The funding situation is that in the year that has just ended we received the same amount from the FA and the new Fans Fund. For the year that is now starting, we got a reduced element from the Fans Fund, which is effectively the Premier League, and the same element from the FA for one further year. The year after that we get a further reduction from the Fans Fund, and we do not know what the FA position will be. I pay tribute to the FA for continuing their funding at the same level.

Unless we can replace our lost funding with alternative sources of income, we will be making staff redundant. We are doing everything we can to develop new commercial approaches. I don’t have to tell you that, to say this is not the ideal time to be entering the market, to use the jargon on that, is to put it mildly. Secondly, we are an organisation of football supporters, not people who are particularly used historically to developing those kinds of relationships. We are launching a new fans’ card within the next few months, which is a kind of loyalty card and so on. So we are doing everything we can, but if that does not succeed then we will have to make staff redundant.

The proposal that we put forward, and Supporters Direct have as well, is that for an almost miniscule percentage of the total media rights income that the football industry gets-and which, just in the case of the Premier League, benefited from a further huge increase-you could secure the role of ourselves, Supporters Direct and the other supporters’ organisations. A tiny fraction of 1% or a 10th of 1% would be more than enough to achieve that, so we do not think we are asking for a great deal. We would like that to be administered by an independent panel. It is not the Premier League, for example, who would directly decide.

We do not think it is unreasonable. They give quite a lot of money to the Professional Footballers Association. I am not decrying that at all. It is an industry not like other industries. For the reasons that I said earlier, we are talking about part of a cultural heritage of local communities. If the industry takes seriously the value that its loyal supporters can contribute to it, then such a small sum of money should not be beyond their means. The Government said in its response that it should be within the skill of the football authorities to achieve that.

Q98 Mr Sanders: Mr Scudamore said that the Premier League was giving money to Supporters Direct in order to help it find alternative sources of funding. Have you been able to use the funding from the Premier League to generate other sources of funding?

David Lampitt: That is an ongoing process and that funding effectively went towards us being able to employ a commercial person to try to generate some new revenue streams for the organisation. That is an ongoing process. I think the point that we would make, and I would reinforce what Malcolm has said, is that if there is a recognition of the value of supporters organisations-and I think there is and I think the supporters organisations have demonstrated that to this Committee and to the football authorities previously-then there has to be a longer-term solution to the funding arrangements, and I believe that is what this Committee was calling for. For there to be a constant drip-feed and uncertainty about the supporter organisations’ ability to carry on operating does not allow the supporters organisations to do their job very well-that constant uncertainty for their staff and their place within the game. The key issue for us is that there should be a recognised longer-term funding proposition, whether it is a formula or whatever it might be, that allows that to happen and allows those organisations to get on with the important work that they do.

Q99 Mr Sanders: But ideally would it not be better to not be reliant upon football governing sources for your funding? You seem to be hoping that the football governing sources will give you a more secure longer-term deal with funding, whereas it would be better not to be dependent upon those governing bodies for your funding.

David Lampitt: I think it is a balance and there are some important points to make on that-first of all, the opportunity for our members who already obviously give a huge amount financially to the game and who also generally give a huge amount in volunteering to the game. For us to say that those members also have to fully sustain us is probably unrealistic, in terms of the finances involved and in terms of being able to deliver what we want to be able to deliver to the game.

I think there are wider issues around the overall funding of other bodies within football. Malcolm referred to the PFA, and by no means is this a slight on the PFA, but there are funding arrangements in football recognising the important role that these bodies play. We believe that supporters are an equally important part of that. Having said all of that, Supporters Direct has put in place a business plan. As you may know, I am new to the organisation, in the last month, but we have put in place a business plan to diversify our revenue streams. That is exactly why we have employed a commercial manager. We want to find a better balance between the reliance upon Football Authority funding and outside funding, because I think that is also important for our own independence and long-term security. However, I think it is unrealistic to say that that should not be done. I think it is entirely possible for that to be done with a long-term funding solution from the football authorities which allows that level of longer-term assurance.

Q100 Chair: Can I just ask you one final question? This Committee, as you are probably aware, has basically been tasked with saying to the Government whether in our view the joint response is sufficient as a step in the right direction with, hopefully, more progress to come, or whether or not it needs a bigger push coming from the Government. What would your advice be?

Malcolm Clarke: My advice would be that it does need a bigger push. In our latest evidence we have set down a series of steps, building on some of the existing framework, because I would not wish to pretend that there is nothing there, as I said earlier, that is of value. But in certain respects, unfortunately, I think it has gone in the opposite direction and in other respects we need much more detail and, in particular, we need things written into rule. Of course, until we see what the football clubs themselves are prepared to write into rules it is difficult to make a final assessment, because when we talk about the leagues agreeing this or the leagues agreeing that, what we are talking about is the club owners and we have to wait and see what they would agree to. I think the answer to your question, Chairman, is it does need a bigger push. Obviously your report did not give us everything we would ideally have liked, but we did recognise that in many respects it was a significant step in the right direction. Unfortunately, we do not feel that the joint response, as elicited by the core group, takes that as far as it should do.

Chair: Do you agree with that, David?

David Lampitt: Yes, I wouldn’t deviate from that. I think, absolutely, if there is a step in the right direction it is a very small step and it is a step that comes with other compromises.

Chair: In that case, let us move on to the next group. Thank you very much.

Examination of Witnesses

Witnesses: Greg Clarke, Chairman, Football League, Andy Williamson, Chief Operating Officer, Football League, and Roger Burden, Chairman, National Game Board, gave evidence.

Q101 Chair: Thank you. Can I welcome to the second panel this morning, Greg Clarke, the Chairman of the Football League, Andy Williamson, the Chief Operating Officer, and Roger Burden, the Chairman of the National Game Board. I am going to invite Damian Collins to begin.

Damian Collins: Thank you. I would just like to ask about the negotiation over the recommendation on the membership of the FA Board. It was reported that the Football League was unwilling to reduce its representation to one member of the Board, with the Premier League following suit. They wanted to keep it at two. I want to ask, was that the case? Was it your reluctance to reduce your representation to one member that prevented the FA getting agreement on the Board of just 10 members?

Greg Clarke: Yes, absolutely true. We are a highly democratic organisation. All of our debate about the engagement with this process, which we decided to be proactive on and to engage in in good faith, and all our recommendations and discussions were debated by all 72 clubs in the quarterly meeting with the chairmen and chairladies of each club. We went through the position and the view of our clubs, which I absolutely support, is that we have 72 clubs with over 16 million people watching them each season. We felt that we deserve two seats on the FA Board and that was our position.

Q102 Damian Collins: I can see why you want equal representation on the Board with the Premier League, but if the Premier League were prepared to go to one member, why should the Football League not have one member as well?

Greg Clarke: As far as I am aware, the Premier League were not willing to go to one member. They were willing to go to two members, which was equality with the Football League, and we were quite happy with that proposal.

Q103 Damian Collins: But would you follow it? If the Premier League went to one member would you go to one member as well?

Greg Clarke: I am not a big fan of the Football League or the Premier League going to one member. Like many people in this room, I have sat on a lot of boards-FTSE 200 companies, global companies, Football League board-and it helps to be able to chew things over with people who are in the room, who are not speaking when you are speaking, and developing positions. I think being the only representative is sometimes very difficult because there are a lot of complex issues. You have to make your decision as a board member with fiduciary responsibilities for that organisation while you are in the room, and not having someone who is on the same page as you, from the same organisation, to say, "What do you think of this counter-proposal? Can we compromise on that?-I think losing the value of that debate would slow down the whole decision-making process, because you would have to come back and consult all the time. I think there can be benefits to it. Our view is two board members would be better for the Football League and better for the FA because people could then take decisions.

Q104 Damian Collins: It is the FA Board. There are other committees, there are other panels where these sorts of debate can take place, but we are looking at the main board and our recommendation was to try to make that as tight as possible. Are there any other reasons why you do not think the Football League could be represented by just one person on that board?

Greg Clarke: To be perfectly frank, I think it is a complete red herring. Some of the most effective organisations globally have much bigger boards than eight, 10, 12 people. I could run up a string of best-in-class Fortune 500 companies, FTSE 100 companies, ASX 50 companies, who are extremely well run; produce excellent performance; manage all their stakeholder interests with boards of 13, 14, 15 or even 20. I have sat on boards in Germany, in France-committee d’entreprise and so on-with shareholder representatives. It has not happened in this country but they have representatives on board and it works extremely well. None of them have ground to a halt because of the size of the Board. It is the quality of the Board that counts, in my opinion.

Q105 Damian Collins: Do you think the balance of the Board as recommended now is right?

Greg Clarke: I think it is a good compromise. "Right" depends on what set of pre-judgments you make. My view is if you have the right people around the table, with the right expertise and the right long-term mindset-a vision of where you are taking the organisation for the long term, and not compromising over short-term expediency-the size of the Board I am not fussed about.

Q106 Damian Collins: One final question on this; I appreciate your preference is to have two board members.

Greg Clarke: Sure.

Damian Collins: But do you think it is possible for one person to represent the diverse interests of the Football League on the Board if you only have one member?

Greg Clarke: I have not met that person.

Q107 Damian Collins: So it is not you, then?

Greg Clarke: No, I don’t think so. I do not put myself on a pedestal as better than any of the other administrators in football. I often sit at a Football League board meeting and I come in with one point of view and, after I have heard the debate, I come out with a completely different point of view because I have learnt from the people around me. I think having the ability to chew over the issues with someone who has heard all the debate, but represents the same stakeholders as you, is an important thing to maintain.

Q108 Damian Collins: Presumably you could do that with your own board before the FA Board meeting?

Greg Clarke: You could do, but the trouble with pre-meetings is you have pre-meetings about pre-meetings about the FA Board, the Professional Game Board, the Football League board and, before we know where we are, we do not do anything other than have meetings.

Q109 Damian Collins: I just wonder if it says more about the Football League as an organisation than it says about the FA Board that it is difficult for you to come to a view on anything.

Greg Clarke: No, I never said it is difficult. I have a view on everything, and I am quite happy to share them with you. What I am saying is I am not always convinced I am right. Sometimes I am wrong and I have enough intellectual humility to want to chew things over with other people who have heard the whole debate and say, "In this situation you are right, I am wrong and we will do it your way".

Q110 Damian Collins: Yes, I appreciate that. That is part of running an organisation, but what we are saying is, can the Football League come to a corporate view on things to an extent that it makes it easy for one person to represent that view on behalf of the Football League?

Greg Clarke: Only if it can pre-judge and predict the whole debate.

Damian Collins: No, that is not an answer to that. I think we-

Q111 Chair: You are not suggesting, however, that the two representatives on the board of the Football League are sometimes going to take different positions, are you?

Greg Clarke: They often do.

Q112 Chair: They often do. The Football League will produce two conflicting views?

Greg Clarke: Absolutely. We empower our directors to go there, listen to the debate and make decisions in the best long-term interests of English football. You cannot be parochial. Sometimes we have to do things that are problematic for the Football League but are in the best interests of English football, and we often do that. People make those judgments and sometimes they disagree, because they come from different backgrounds, clubs of different sizes, and clubs of different financial strengths. If we employ, to use a political term, a three-line Whip on our directors and tell them what the answer is, they can add no value and cannot take any strength from the debate around the FA Board table. So we do not do that.

Q113 Damian Collins: From what you just said, is that the real issue: that the size and financial performance of clubs in the bottom half of League Two is so different from the Championship that it is difficult to manage them as one group, because Championship clubs that are former Premier League clubs are gravitating towards the Premier League, and they are operating on a totally different scale from clubs much lower down the football pyramid?

Greg Clarke: It is true throughout football that you manage a wide church. Those issues are the same. For example, Swansea and Norwich have a different agenda than Manchester United and Man City in the Premier League. One of the challenges of being a football administrator is to find a common agenda that includes all of these people with different objectives. We had to work very hard at that within the Football League, but, as we have shown with financial fair play, it is possible to get the collective will to prevail.

Q114 Damian Collins: Given the answers that you have given, I do not think the Premier League seem to have the difficulties you have, and I imagine that is because, although there are differences between the clubs, they are still more similar than the range of members you have?

Greg Clarke: We have a lot more diversity than the Premier League. That is for sure, yes.

Q115 Chair: The position is that you are going to want equal representation to the Premier League and that the National Game is going to want equal representation to the Professional Game. If you have your two places, that is eight places already defined, and, as the supporters said and as we believed, it is balance that is important. So the only solution to that, if we were to get the balance that we are seeking, is a board of 20?

Greg Clarke: You could take that view. I take a different view and my view is that I am quite capable of being a good Englishman and a good British person as well. My view is the Football League has a duty of care to the long-term future of English football and we are very, very capable of bringing people to the table who have been in football and managing football clubs and around football. Both of our directors have been owners of football clubs and chief executives of football clubs for over 25 years. We believe that is valuable experience for an organisation charged with the future of English football. So we would not put people on the FA Board whom we did not believe had that mind-set and that level of experience.

Q116 Chair: I am sure there are plenty of people with that mind-set and that experience, but that does not mean they should all sit on the FA Board.

Greg Clarke: Given the number of football clubs that are looking for chief executives at the minute and having difficulty finding people with that experience, I think we should be very careful not to squander it.

Q117 Dr Coffey: Mr Burden, what are your reasons for rejecting term limits on Council?

Roger Burden: Term limits? Council is elected.

Q118 Dr Coffey: When did you last face an opponent in your Council election?

Roger Burden: In my own county?

Dr Coffey: Yes.

Roger Burden: When I was first elected.

Dr Coffey: How long ago was that?

Roger Burden: That would have been in 1995.

Dr Coffey: In all your annual elections since then you have never had an opponent?

Roger Burden: No, nobody has stood against me.

Q119 Dr Coffey: What are your reasons for rejecting term limits?

Roger Burden: My reasons are that I am assuming that all of us, rather like MPs, are elected because they are best. In Gloucestershire, my own county, we are choosing from representatives of leagues who have lots of football background, different business backgrounds. For reasons best understood by people in Gloucestershire, perhaps not by people on this Committee, they decided I am the best person to represent them. That would be a typical example across the county. I am county chairman. I have been county chairman for many years and that gives me a fairly broad understanding of what goes on in the county. I have some business background, too, which helps me when I am in the boardroom and that is why I think I have been elected to Council. Now, if I am forced to stand down, fine, I will stand down; but, presumably, that means Gloucestershire has to find somebody who is second-best. It will not be the chairman; it will not be the chief executive because he is too busy. I am not sure who it will be but, of course, somebody will put themselves up. People who elected me will think that that is the second-best choice. So I cannot see what use that is to anybody.

Q120 Dr Coffey: The other reason I have heard is that it is about fostering international relationships, which I fully understand, but the chairman of the FA is limited to a certain number of years.

Roger Burden: Yes, he is.

Q121 Dr Coffey: Clearly that is a pivotal figure in trying to foster that. If I may I will give you a bit of context. Your answer was very honest and very illuminating. My impression of many of the Council is, absolutely, they put their heart and soul into the game and being on Council is an element of leadership but also an element of reward. I suppose from the outside, one of the reasons why perhaps it is parliamentary Committees like that this are then inspired to try to instigate change is as a result of not a great deal of turnover of representatives from the Council.

Roger Burden: It depends what sort of turnover you are looking for. We have to retire when we are 75 anyway, as I am sure you know, and that generates some turnover and, I am guessing, there were certainly six if not seven new members this time. So that would be fairly typical with people standing down or not being successful in the election.

Q122 Dr Coffey: That is over 120, is that right?

Roger Burden: I do not know how many members there are. I am not sure how many councillors there are, but over three or four years you will get reasonable turnover and it takes a bit of time. You will know yourselves from Committees, it takes a bit of time to pick up speed. I do not like the two-year term for the chairman, and I think that is the recommendation generally in corporate governance. I do not like that, but it is there. I think if the chairman is good enough he should be allowed to stay.

Q123 Dr Coffey: Just progressing a bit further, I fully understand why, once you have been on Council, if you get on to committees, there is the question of maintaining that experience, but for the people who are understandably doing a good job representing their county or Oxford University or the armed forces football, why do we not say internally, "You are here for so long and if you don’t make progression within the leadership of the structure, then it is time for somebody else to come in and do that"? I mean, when was the last contested election, say, in your neighbouring county?

Roger Burden: There are contested elections.

Dr Coffey: Okay.

Roger Burden: Oh yes, there are. In West Riding there was a contested election and the standing member did not get in. So it happens.

Q124 Dr Coffey: But it does seem very rare. So I hope you can understand why from the outside it does seem a bit extraordinary that you are wedded to not quite a job for life, I understand that; but there are very few elections.

Roger Burden: "Job" is not the right word.

Dr Coffey: Very few elections, then.

Roger Burden: I am a volunteer. Yes, it may look like that from the outside but hopefully I have explained how people get in and some people will just automatically vote for the Tory and he will go back in, or the Labour candidate. It just happens and as long as it is the best person by democracy, then that person can stay for-I do not know if there is an age limit here.

Q125 Dr Coffey: You might want to have a look at the NFU model, whereby the president needs to get an increasing percentage of the vote and people backing him. So even if he still wins and is the only candidate, if he does not get the ongoing support he has to go.

Roger Burden: Yes. Okay.

Q126 Dr Coffey: Can I ask a bit more about the appropriate level of control of the FA by shareholders? Will the proposed changes achieve that level of control? We were recommending a greater simplification, yet the decision of the football family has been to continue that distinctive role of shareholders and Council.

Roger Burden: Yes. We have changed, though, because at the moment what I thought was a quite simple process where the Council has some decision-making authority and the Board has some decision-making authority-and it is fairly clear that Council is responsible for stuff and the Board is responsible for stuff-is changing now as a recommendation from this Committee. It has all been thrown at the Board, and that is probably why people are thinking it is looking complex. It probably is a bit more complex than it is now, but you started it.

In terms of the shareholders, the shareholders are there. They are a bit of a pain in the neck sometimes, aren’t they? You should ask some of the directors of national companies. But they are there and they are there to test people and our shareholders are different. They are representative, we think, of the football family. I think the paper just touches on that. I don’t think we can ever get rid of shareholders. What we have done is eliminate decision making from Council so that everything goes to the Board and I think that is what you asked for.

Q127 Dr Coffey: I understand the element of using committees going direct to the Board and similar. I think it is just a question of trying to understand, to the average football supporter, the same person-are you a shareholder on behalf of Gloucestershire FA, as you are on-

Roger Burden: I hold one share. Yes, I hold a share.

Q128 Dr Coffey: Is that to try to preserve the equality of counties, regardless of their size? You just explained before-

Roger Burden: No, it is not regardless of size. Again, I am guessing. Gloucestershire holds 22 shares; so there are 22 shareholders in Gloucestershire.

Q129 Dr Coffey: How many council members do you have?

Roger Burden: One.

Dr Coffey: Just the one?

Roger Burden: Yes. Whereas a large county- or Birmingham, London-such as Hampshire, I think, might have 30 shareholders and the smaller counties have two or three. The idea is that the shareholders do fairly represent the number of football teams in the country. That is what we do. We are allocated a number of shares in Gloucestershire, in accordance with the number of football teams that we have and then the Professional Game have their allocation too.

Q130 Dr Coffey: Finally, given the benefits, and perhaps the clarity of decision making, which I hope some of these recommendations we propose would achieve, is there anything you would press further for greater simplification of the FA structure?

Roger Burden: No, I am content with the paper that you have in front of you and some of the progress that we have made since, because obviously the core group is still working. I am content with whatever our final recommendation is, and there is some direction.

Dr Coffey: Spoken like a true politician.

Roger Burden: I have been involved in it, I have been given a fair crack at it and I am content.

Q131 Mr Sutcliffe: I want to come back to this idea of representation. You have the Professional Game Board and the National Game Board that are going to have wide-ranging responsibilities, but how are they going to be more representative? In terms of the National Game Board-no women on there, no supporters’ representation. So how is it going to become more representative?

Roger Burden: I am sorry, did you say "National Game Board, no women on there"?

Mr Sutcliffe: Yes.

Roger Burden: We have women on the National Game Board.

Q132 Mr Sutcliffe: That is good news, then. But in terms of supporters, then, what about supporters?

Roger Burden: I am a supporter. I go to football every Saturday. I pay my money and I support football teams.

Q133 Mr Sutcliffe: Supporters’ representation, then. Somebody from Supporters Direct or somebody from the-

Roger Burden: If I just pick up the National Game Board issue. I do not think support is our National Game-our general feeling is supporters in the way you have described them, in terms of the bodies, belong to clubs. We support a club or we support England and it becomes Club England, and the FA chairman can talk about that. Apart from the fact the National Game Board members are ordinary guys like me who pay their money every week, and so I am a supporter and I will have a crack at people about prices, I think supporters generally belong to the professional clubs.

Q134 Mr Sutcliffe: We have been told that the Professional Game Board and the National Game Board are going to look at every element of the game and its future. You do not see any role for the wider support and representation? We just had the earlier panel where we talked about the funding for supporters bodies and things like that. You do not think the National Game Board has any role in that at all?

Roger Burden: What we have to do is divide up responsibility. We cannot all be responsible for everything. It was my recommendation that Dr Clarke, who is on the Council, becomes a member of the Professional Game. That is my recommendation, which the Professional Game guys are considering because one of his concerns, I think rightly, is that there are six members, including the managers and the players’ representatives, who are not allocated. They are sort of sitting without portfolio in Council and it is my suggestion, which I think people are beginning to agree with, that the referees and the equality group and the disability group become part of the National Game and the players, the managers and the supporters, become part of the Professional Game. That would give them a bit more status.

Q135 Mr Sutcliffe: Is that your working groups, Roger?

Roger Burden: Yes.

Mr Sutcliffe: Mr Scudamore, when we asked him the question, said that it would be working groups that would report to the National Game Board and that is how you would get down to the nitty gritty of key issues. They would make recommendations to the Board.

Roger Burden: Yes. We do have already an equality working group that reports into Council, and my recommendation is it will come into the National Game Board, although I think for things like equality and disability they will be directly into the Board because they are quite significant football matters.

Mr Sutcliffe: That is the relevance of it?

Roger Burden: Yes.

Q136 Steve Rotheram: If the new Regulatory Policy Group is going to determine policy in a whole host of different areas-and we have a lengthy list here but I am sure you are aware of them, to save reading them out-what remains for the reconstituted FA Board to do?

Roger Burden: In terms of regulation, it may be not a lot because the whole idea-and I think this is what you were suggesting-is the regulation is at arm’s length, to me as a director as well as a member of the National Game. There is, I think rightly, a degree of independence and arm’s length. It is within the FA but it is real Chinese walls. I think that is probably right. In the end the regulation does report into the Board, but certainly the stance the Board has adopted to date will be no different as the regulation people adopt more responsibility following your recommendation, which is that they are left to do these things without interference from the Board. We do not interfere with disciplinary matters in the boardroom, for example. That is at arm’s length.

Q137 Steve Rotheram: Obviously quite rightly as well, the recommendations that came from this Committee have triggered some changes to the shape and structure of the Board, but also to the functions and responsibilities as well. In other words, are we going to be left with an FA Board that is literally a shell and does not do any of the things it did previously because they now are held in different structures within the organisation?

Roger Burden: Yes, I understand that. The issue comes back to, at the moment that FA Board is currently doing FA Board business, and the Council does a lot of the feedback stuff and certainly some of the county nitty-gritty. Because committees are now going to report directly into the Board, we have to delegate. We had a Council meeting two days ago, which lasted two hours, and the papers were that thick. The normal board papers are that thick. So the Board would be handling papers that thick, if it did everything. The more we pile on to the Board, the more the Board has to delegate and that is where we are getting what is fairly complex issues of delegating between the Professional Game Board and the National Game Board. But I do not see that the Board will have nothing to do. It will have to rely on the Professional Game Board and the National Game Board to deal with the day-to-day decision making, but in the end the Board will be receiving reports, as it does now, from the National Game Board and the Professional Game Board. It is not abdicating at all, but it does have to delegate more because the recommendations of the Committee expect it to have responsibility for everything.

Q138 Steve Rotheram: Say there were some recommendations around licensing; where would that sit now?

Roger Burden: The recommendations with licensing will finish up with the FA Board, but they will go through the regulatory authority first, I believe, before it comes to us.

Steve Rotheram: So it would be a lower tier or a different tier or a sub-tier, and then-

Roger Burden: To get through the nitty-gritty, yes, and then the FA would be given some recommendations.

Steve Rotheram: But ultimately the FA Board?

Roger Burden: Yes, and it is the same for the National Game Board and the Professional Game Board.

Q139 Steve Rotheram: Mr Scudamore told us last week that under the new system there would be absolute clarity as to where authority lies. That is slightly debatable from what you have just said there, but are you satisfied that the proposals to create such clarity will do exactly that? Will they create clarity?

Roger Burden: I will answer that one quickly. I think they are more complex but we can make them clear. They will be divided up rather more than they are now because of the delegation, but there will be absolute clarity. We are moving towards that.

Greg Clarke: I do not see an issue. Just because it is complex does not mean it can’t be clear. What we are doing at the minute, we are moving from policy documents to procedural documents to process documents, who will do it, what the job specs are and who will overview it. We have had lots of debates. For example, the Football League is responsible for enforcing its rulebook, but there are processes in place whereby the FA Board can say, "You aren’t enforcing your rulebook as you said you were. We are going to look into it". So those checks and balances have to be in place at the minute, and what the FA are going to be very busy at over the next six months is writing down all of these things so they are subject to both clarity and scrutiny to make sure that they do what they said they would do and are fit for purpose.

Q140 Steve Rotheram: So it is not necessarily about simplification, but clarification of rules?

Greg Clarke: Clarification; some things have to be complicated.

Steve Rotheram: Even if it makes it slightly more complicated?

Greg Clarke: Absolutely.

Q141 Chair: There is a suspicion that the FA Board, which we have talked about and where we made very strong recommendations for a change in the composition and the balance-that to some extent is being proposed; not as far as we would like but there is a step in that direction-but at the same time the power is now being given to the regulatory policy group whose composition is almost identical to the existing FA Board, which is the one we said was not satisfactory. Therefore, while you have attempted to appear to move in our direction, power is passing to a structure that is much the same as exists at the moment. Is that unfair?

Roger Burden: No, I do not think that will be the case, Chairman. The composition of the regulation authority-and there is, I think, more than one-is still under debate and I think you will see rather more independence on the regulatory authorities than there is on the Board today. It is not something I am very close to. As I say, I am arm’s length from it, purposely.

Greg Clarke: I think it is worth explaining what we are trying to achieve, which is a separate regulatory authority that will hold football to account for obeying the rules and regulations that have been set and, while subject to the will of the Board, are behind a Chinese wall so they cannot be leant on. For example, disciplinary affairs, Owners and Directors Test will be enforced by an organisation that is accountable to the FA Board, and cannot be leant on by any of the leagues or any of the clubs. That needs a lot of documentation. It needs a lot of independence. It needs a lot of expertise, but that will not be people from the FA Board. It is a completely different skill-set.

Q142 Chair: But the balance on it will be pretty similar to that that exists on the FA Board? It was suggested to us there would be equal numbers of National Game, Professional Game and non-representative appointments?

Greg Clarke: Yes, I expect there will be a lot more non-representative appointments because, for example, we have-

Chair: A lot more but not a majority?

Greg Clarke: The problem with having a majority is getting a balanced debate because, for example, on the FRA we have some quite senior legal figures who help us get the process right and get the natural justice aspects right, but they also need to understand the context in which those decisions are made by people who play the game and administer the game. Certainly the Football League, and I do not believe the National Game or the Premier League, are hung up on having a football majority there. What we want is the right balance of people to make sure the game is run properly and being seen to be run properly and independently from the line authority of the FA.

Q143 Steve Rotheram: Can I just finish that off, because it is in the note? Actually, I do not think it is, but I will ask the question anyway. Do the panel believe that this provides absolute clarity as to where authority lies?

Greg Clarke: I think it will provide absolute clarity because it is pointless moving towards an agreement on policy and then putting the implementation in place, until you have the policy agreed. We are in good faith. The core group have come up with a proposal, which we brought back to this Select Committee as part of the consultation process. When we get agreement, or not, because it is for you to decide, we will then work to make complete clarity, with each of the committees coming out with specifications, processes, membership lists and so on, so that anybody can say, "This part of the process, how does it happen? Who oversees it? What are the rules? What is the appeal process?", so that scrutiny can place. But that is the next step, to give you that level of transparency.

Q144 Damian Collins: Just following that, the owners’ and directors’ test is quite a good example of this, and it is an area of competence that the joint recommendation from the football authorities sets out for the FARA. I suppose the example we looked at as a Committee last year was the ownership model of Leeds United, which then changed, I believe following the intervention of the Premier League, who said they interpreted the rules on when you had to declare a stake or an ownership of the club differently from the Football League. In a situation like that, will it be for the FARA to say, "Well, we think we agree with the Premier League’s interpretation of the rules rather than the Football League’s interpretation and, therefore, in this case we want the full ownership to be declared"? Is that how you see this working, as an example?

Greg Clarke: That is how I see it working. A regulatory authority has to have the final call on whether you are obeying the rules. We cannot say, "Well, we disagree and we are going to do it this way". One of the reasons we are putting them in there is that it is useful to have consistency across football. One of the problems we have is we work in a liberal democracy and if there are no facts that show a person is a bad person, like regulatory black marks or criminal convictions, we cannot say, "Well, we don’t like the cut of their jib. You can’t own a football club".

Q145 Damian Collins: But the concern is when you do not know who they are?

Greg Clarke: There is always a concern. We know across the Football League who owns all our football clubs. There is a process by which we have to ascertain that nobody owns more than 9.99% of a football club without declaring that they are a beneficial owner, but sometimes we are subject to confidentiality agreements that say, "We will show you that to show that we are obeying the rules but you can’t tell anybody because we don’t want people to know". There are good reasons sometimes why people do not want to be known. For example, I have been a programme seller, season ticket holder, fan, director, chairman of a football club. People have said to me, "I am going to put some money in a football club but don’t tell anyone it’s mine", and you say, "Why not?" They say, "Because I don’t want my door kicking down when we can’t afford a new centre forward on a Saturday night", because 99.999% of football fans are wonderful people but there is a small minority who get exercised and take it out on the owners and some people just do not want it to be public information that they have provided money for their football clubs.

Q146 Damian Collins: Just to take the example of Coventry, SISU is the official owner. Are you saying that you know who the investors in the trust are at SISU that own the club?

Greg Clarke: We know who the investors are.

Damian Collins: So you know the ultimate beneficial owners of the club?

Greg Clarke: I do not know because I am the other side of the Chinese wall, but our experts in the regulatory department at the Football League know who owns Coventry City.

Q147 Damian Collins: They have been shown documentary evidence by the club of that?

Andy Williamson: No individual owns more than 9.9%.

Damian Collins: But you have been shown a list of all-

Andy Williamson: Yes.

Q148 Damian Collins: How do you verify that this is true information?

Andy Williamson: We have sworn statements from legal representatives that that is a representation of the investment trust that owns the club.

Q149 Damian Collins: So who gives sworn statements in that regard?

Andy Williamson: The legal representatives.

Damian Collins: Of who?

Andy Williamson: Of the trust.

Damian Collins: Of the trust?

Andy Williamson: Yes.

Damian Collins: So they give sworn statements and they give you documentary evidence showing who all the investors in the trust are?

Andy Williamson: Correct.

Q150 Damian Collins: If you take a case like Sheffield Wednesday, where the club is owned by a company that is registered in Delaware, there is no legal obligation on their part to declare who the ultimate beneficial interests are in that trust, but you would still require them to give you documentary evidence in that case to show who those people are?

Andy Williamson: Yes.

Damian Collins: Even though they are under no legal obligation to do so, you would require that?

Andy Williamson: Correct.

Q151 Damian Collins: I suppose there is a separate question of, do fans have the right to know who owns their club? I personally think if I was a fan of Coventry City I would feel very aggrieved not only at the financial state of that club and the terrible way it has been run, but the fact that the fans themselves do not know who the people are behind it, who the investors are. There is a separate question there. Regardless of what investors might like, do you think this is right?

Greg Clarke: My personal view is that people should know who owns their football club. I think transparency is a wonderful thing. You then get to the situation where there is not a big queue of people wishing to own Football League clubs. The big ones in the Championship, if they think, "I might be able to get them in the Premier League", yes; but if people come along who say, "I am a person of repute. Check me out. Here is a certification. Here are my advisors. Write to them. I have no legal problems. I have never committed any crimes. I’ve never been blacklisted by any regulatory authority. But here is my ownership structure, which is perfectly legal within your country. I would like to use it", it is very difficult for us to say, "No, you can’t". What happens then is we drive away the capital necessary to keep our clubs in business. What I am saying to you is, of course, we prefer transparency, but if it is at the cost of turning off a source of capital from bona fide, well-qualified, well-funded, reputable people, we might not be doing those communities a favour.

Q152 Damian Collins: It is a point to debate. Are people that want the cloak of anonymity the sort of people you want investing in football clubs, particularly if they are doing so from vehicles registered overseas in tax havens? It does invite the question as to whether the real reason people do not want to have their interest declared is not that they are worried about people knocking on their door at midnight but that they do not want to pay tax when they sell the club.

Greg Clarke: I think that is a bigger issue than football and I think, while this country has a legal system that allows people to have offshore trusts and ownership structures and so on, putting that problem at the door of football is the wrong place to put it. I think all businesses should declare who owns them and why and where they pay tax. That is my view.

Q153 Damian Collins: But football is not shy in creating its own financial rules that serve the interest of its members when it wants to.

Greg Clarke: I think we should be careful in defining "members". When I took the job as chairman of the Football League the Board said, "Why should we give you the job?" I said, "My number 1 objective will be to keep the community football clubs in business to the best of my ability". I have a moral quandary with the football creditors rule.

Damian Collins: You are not the only one.

Greg Clarke: Yes. But imagine that the consequence of cancelling it without putting something similar in place were that we lost more football clubs, maybe at three times the rate that we are losing them now. Would that be a price worth paying? The moral quandary is, do you protect the community asset and the hundreds of thousands of people who have an affinity to it or do you protect the small creditors? I am hugely sympathetic to both parties, but my personal view is we have to keep the clubs alive for their communities. Until we can find something better than the football creditors rule, that is what we are stuck with. Nobody loves it.

Q154 Damian Collins: I will come on to the football creditors rule. I want to get back to the premise of that question, which is about football. You said that under the club ownership you cannot create your own rules, but with the football creditors rule you do create your own rules. I think if you are unhappy with the rules of only businesses in the UK applying to football clubs then you would be perfectly at liberty to change them if you saw fit to. That seems to be the way that football runs its affairs.

Greg Clarke: No. What we try to do in the Football League is always obey the law of the land and we continually beat HMRC in court because we obey the law of the land. We obey the laws that you guys set to the best of our ability. We are a private members club and if you join a golf club or a tennis club or a working men’s club and you don’t pay your bar bill or you do not pay your fees, the other members kick you out. What I am trying to do is not create a set of circumstances where the only sanction available to other Football League clubs is to kick out any club from the league that gets into financial trouble. That is a terrible price for any community club to pay, and it falls on the backs of the local people.

Q155 Damian Collins: But I think the reason clubs are getting into this situation is that they are living beyond their means. They are spending money they cannot afford and they are doing that off the back of their other creditors, including taxpayers and businesses in their community, and they are using that money to fund their football performance and then, when there is a problem, they can walk away from the debts they have to the rest of the community but not to other football clubs. There is this question about morality. You have raised it, and Mr Scudamore used the word. There is no moral justification for it, but do you think getting rid of it is part of a necessary adjustment that football needs to make to get away from this model of people within football living beyond their means and protecting each other from the risk of doing that?

Greg Clarke: I think you put your finger on it with the issue of causation. I am not obsessed with fixing problems; I am obsessed with preventing them happening in the first place and in the last two and a half years I have spent most of my time and the time of the executives getting the Football League to support financial fair play, which is putting rules in place that should make it less likely over the long term that clubs get into financial difficulty, because they are required to limit the amount of money they can spend. Some of them are required to break even. The clubs unanimously voted across all three of our divisions to put these rules in place. That is the first league in Europe, maybe in the world, to put these in place and, as we go down that road and people can spend less and less money that they do not have, it is likely that they will not become insolvent and that means we will not face the moral dilemma any more.

Damian Collins: I appreciate that, and I think the league should be applauded for the steps forward you have taken on financial fair play. In some ways you said something similar to what Richard Scudamore talked about last week and for me, in some ways, this makes the existence of the football creditors rule even worse because, if the leagues have power to intervene, to help support clubs or, in the case of the Premier League to divert funds to other football clubs to cover football debts that are not being honoured, and yet that club still fails, it is even more galling then that the unsecured creditors from the community and the taxman do not even get equal treatment at that stage as well. I agree with you, you should try to avoid clubs getting into that position if you possibly can; but, once they do, I do not see why all creditors should not be treated equally if a club has been given every possible chance of avoiding getting into that state of affairs.

Greg Clarke: We try to step in before a club is liquidated. For example, if you look at our public announcement on the latest Portsmouth situation, we have tried to stop too much debt being rolled over to a secured position in the new vehicle. We have put a number of financial provisions in place and monitoring of their profit and loss account, how much they are spending on players, their players’ budget. There are a lot of ways we try to make sure that when a club comes back to life it comes back to life in a sustainable form, but it always comes back to the fact that when you sit around a table and you have a bunch of clubs, 72 at a club meeting or a Football League Board meeting where you have club representatives, they sit there and say, and I have heard them say it, "This club that has gone bust has been outbidding me for players. They have been beating me because they have been spending money they do not have". It is a very small step to the rest of the clubs saying, "We do not want to play with them anymore". We worked night and day to keep Plymouth afloat and we nearly lost it. A town of 300,000 people nearly lost its football club this time last year. Portsmouth may still lose its football club this year, another town of 300,000 people. My job is to swallow my moral scruples about football creditors and keep football alive in those communities. It takes a lot of swallowing, because I do not like it any more than you do.

Q156 Damian Collins: No. Let us not be over-dramatic. It might be the end of that club as a business. It is not the end of football in that town. Even clubs like Aldershot and Accrington Stanley have demonstrated that clubs can come back from financial ruin.

Greg Clarke: Yes. But just imagine, because I have to face these clubs and their fans and the local press and say, "Don’t worry, guys, 10 or 20 years down the road you could be back, just like Aldershot". That is not what they want to hear.

Q157 Damian Collins: I know, it may not be what they want to hear, but I think it is what they need to hear. The trouble is it is too easy for clubs to rack up debts, go into administration, walk away from them, carry on playing, and there is not a downside to this. I think as well maybe there needs to be a period of correction and probably there are lots of clubs in your league that have financial problems. Maybe there needs to be some sort of amnesty or some sort of process whereby you correct this, remove the creditors rule and then have a much fairer system moving forward.

Greg Clarke: Well, put it this way, we are putting a process in place that, over the next few years, should make the Football League financially sustainable. When we put together our first strategy study when I joined two and a half years ago, it showed that we needed to raise an extra £1 billion of working capital for the Football League over a five-year period. The credit markets, debt markets and equity markets are closed to football clubs, so that money is either coming from offshore owners or the local communities. That persuaded the clubs they needed to act and they needed to act now to stop wasting money and just spending more than they had. Let us put that to one side. We have put that in place and my firm belief is that will be fixed. What I have not found yet is an alternative to the football creditors rule that would not result in the loss of many more football clubs. That is not a cost that I am willing to tolerate as a guy who grew up in community football. It may be a cost that you guys are willing to impose, and you can.

Q158 Damian Collins: Well, in fairness, that is down to you. I think Parliament could legislate to get rid of the Creditors Rule. I think that would be the fair thing to do and we have heard evidence from lots of people on that, but then it is down to you how you choose to enforce your own rules. In Scotland, they do not have a Creditors Rule and there has been a debate about what happens with Rangers and what level they play at. Rangers are still going to be allowed to play in the Scottish League and they might have been allowed to play in the First Division of the Scottish League until quite recently. That is a matter for you. I think Parliament can say, "Should we recommend legislation to set a level playing field and get rid of this immoral unfairness people talk about?", and then it is down to you how you handle that.

Greg Clarke: A debate about the pros and cons of closing down your local football club, I would suspect, is akin to the pros and cons of closing down your local hospital.

Damian Collins: But you are the one closing it down, not us.

Greg Clarke: I noticed that, but I am not going to do it.

Andy Williamson: Chairman, just to pick up Mr Collins’ point about what has happened in Scotland, there is another notable difference between the Scottish model and ours, and that is there is not automatic promotion and relegation with the structure below the Scottish League. In England there is. When a club goes into liquidation, it does not start at the bottom of League Two. It would start at a point that it can find a vacancy at least, under FA rules, two levels below the Football League. In the case of Aldershot, which has been alluded to, they I think started in Isthmian League Division 3. It took them 17 years to get back into the Football League.

Q159 Damian Collins: These are decisions for football. Sorry, Chair, one final short question I wanted to ask that I meant to ask when I was asking about the owners and directors’ test earlier on. I just wanted to come back from the correspondence I had with Nick Craig last year where he raised, I thought, a very real concern when he said that the Football League was in a position where it can regulate and seek to require clubs to comply with rules, but are reliant on self-declaration with no official means of independent verification. Is that still the case?

Greg Clarke: Yes. We work very closely with the Premier League, for example, because clubs pass from the Football League to the Premier League and back again, which is healthy. The Premier League spends a lot more money than we do and I often see reports coming across my desk that say, "We have heard this, this, this and this. We cannot prove it". David Bernstein, the Chairman of the FA, had a lot of conversations with me when he first joined, just to listen. He said, "Would you be willing to give us the owners and directors’ test, to the FA?" I said, "Absolutely", and he looked a bit shocked. I said, "But be careful what you ask for". Just because you move it around does not solve the problem, because people can turn up and say, "Yes, okay, you turned me down because there is a lot of scuttlebutt and rumour out there. Meet my QC. He is going to ask for a judicial review of this. You have no data or facts to hang this on and I am going to sue you", and they will win, all the time, no matter who carries out that test. Whoever carries out that test, be it the Football League, the Premier League, the FA, the FARA, they can only act on publicly available facts. We all do our best to get those. We spend a lot of money with reputable agencies who go out there and dig up court records and regulatory records in countries around the world. We speak to the embassies. We speak to local football authorities. The problem is if there are no facts we cannot act on them.

Q160 Damian Collins: But Mr Williamson suggested that this was not a problem because people make sworn declarations?

Greg Clarke: We do get those declarations, yes.

Damian Collins: But what you are saying is if people are not telling the truth you have no way of finding out?

Greg Clarke: In good faith, if they give us a legal declaration and we check behind the scenes that there are no outstanding regulatory or legal judgments against them and then down the road something comes out and they are thrown in jail or in court and they are found guilty, we will always look silly.

Chair: We are going to have to move on.

Q161 Damian Collins: Okay, but we were told earlier there are sworn statements. You are shown all the relevant documents, but what you are saying now is that you cannot be certain that they are true. You have to take it at face value that they are?

Greg Clarke: Many processes require self-certification. If anyone has been shown to lie to us or any other regulatory authority, whether it is the FSA, the FA or the Football League, there are severe consequences, but people do tell lies.

Q162 Mr Sanders: This is quite frightening because I thought this had been sorted out. My team Torquay went through a period where a new owner came in, unknown at the time that he was coming in on borrowed money, and was then paying himself a salary in order to pay back the money he borrowed to buy the club. It cost a lot of money to get him out of the club and to have now a proper structure with a consortium of a number of people with good intention, and the club is on a sound footing. I thought that had stopped.

What you are saying is somebody could come along in similar circumstances, on borrowed money or with documentation that suggests they have the resources, in order to be the great saviour. They will come in and will offer creditors a pittance outside of the football creditors rule. I know there are examples of where people have used intimidation to get people to agree to accept a lower payment so that they are not seen as the person who stopped the football club from surviving in that town. You said yourself you were worried about being able to say to people, "Don’t worry, in 10 years’ time you will come back". You are afraid of that football group there that can be intimidating. This has to stop, surely. This has to be transparent. I just wonder if one of the things behind this is the parachute payments, because it encourages teams that do not have the parachute payment to spend more than they can afford to compete with the people who do.

Greg Clarke: I apologise, but I do not understand what your question is.

Mr Sanders: Parachute payments is where I am coming to, but I am horrified at what you said earlier.

Greg Clarke: I was just trying to focus on the question you want to ask. Parachute payments are a very interesting concept. For example, when we negotiated the last deal with the Premier League there was an enhanced scale of parachute payments for an extended period of time. I worried whether that would distort the competition in the Championship. We only have two and a half seasons’ worth of data at the minute, but it is exceedingly difficult for Premier League clubs who come down. For example, this year only one Premier League club of the three that came down went back again, despite the size of those. They come down in such financial distress that they spend most of their parachute payments trying to sort the mess out.

The question going forward is, when you have the immense amount of money that the Premier League has-and I am not here to knock the Premier League because we have very, very few world-class businesses in this country. We have Tesco and British Aerospace and Rolls-Royce and I would class the Premier League as one of them. They create an immense amount of money and most of that is spent in their local communities on cars and cleaners and shops and things like that. So it gets recycled and it is good for this country. But a lot of people look at buying Football League clubs because they want to get into the Premier League. It is a route in. If the reward is £100 million, £200 million, £300 million, because you can stay in it for one year, two years, five years, 10 years, people will say, "Well, that is worth an investment". You might get a return on your investment within three or four years. You might get your money back on a cash basis within three or four years. That is a pretty good investment these days. That is changing the dynamics of English football.

One of the things we work hard at in the Football League is to make sure, when we talk about solidarity payments and parachute payments, that we try not to let it impact the nature of our competition because we have to protect our competition. If we ever got to the point where, on average, if three clubs are relegated from the Premier League over a 10-year period, 2.75 of them are promoted every season, we have a problem because that is not a parachute payment; that is a trampoline. The Premier League are aware of that and the Football League are aware of that, but it is a consequence of the immense commercial success of the Premier League.

Q163 Mr Sanders: But, you see, in business, if a business overspent and then suddenly its customer base changed, it would not get a parachute payment from anybody. It would end up going bust.

Greg Clarke: Well, there are a lot of hospitals getting parachute payments at the minute.

Mr Sanders: I do not think hospitals are in the same league; no pun intended.

Andy Williamson: I think, Mr Sanders, to be fair, that is why the Championship itself has elected to introduce financial fair play, so there will be controls on the level of indebtedness and significant controls on the level of indebtedness going forward. With these measures, as the Chairman has alluded to, we have adopted a policy of "prevention is better than cure". There are encouraging signs. Twenty-one Football League clubs made a profit in the last reporting period.

Now, that is partly due to the measures that we have introduced over recent years, including salary cost management, i.e. cost controls, in League Two seven years ago. So that has been in force for a long time. Clubs at that level are far healthier than they have been for a long, long time and, hopefully, financial fair play will see that improve through all our divisions as we have introduced measures across all three. But as Mr Lampitt alluded to earlier, we still have issues like promotion and relegation to deal with, which create their own particular problems. Portsmouth and Plymouth are two prime examples of how clubs have been paying players too much money, suffered relegation and ended up in severe difficulty.

Q164 Mr Sanders: Are you going to do something about checking whether the people who are buying into these clubs do have the means and are bona fide?

Greg Clarke: We spend a lot of resources, a lot of resources. We have just signed off a major football club in the Championship that has just changed ownership. Letters from banks, letters from financial intermediaries, letters from solicitors, full due diligence process, where did the money come from, what are the people like, have they been in football before, what does the local Football Regulation Authority think of them, all that sort of stuff. There is a diligent process.

The point I am trying to make is, do not confuse Football League clubs with viable economic entities. The reason I used the hospital analogy is they are a social good that is important to the local community and that has economic consequences. If you use a capital asset pricing model on football clubs, none of them cover their costs of capital-none of them. What we try to do is keep those clubs alive to the best of our ability, obeying the laws of the land, because the local owners are only the custodians of those clubs. We enforce the rules. We do it diligently and we do our best to keep the bad guys out and facilitate the good guys coming in who are going to do the right things by their local communities, but we do not always do it as well as we could and we seek to get better every year.

Chair: We are going to have to move on to the FA, who are waiting patiently. Just before we do, I have Jim Sheridan.

Q165 Jim Sheridan: Notwithstanding the comparisons with hospitals, can I say that your talents and experiences are a waste of time in England. Should a vacancy come in the SFA then I would be happy to recommend you if you are thinking of going. Can I talk about the supporters’ groups and, indeed, the barriers to supporters becoming owners of clubs? What are the barriers, if any?

Greg Clarke: There are no real barriers. For example, the good people of Portsmouth are trying to buy their football club. I worry, personally, about supporters owning football clubs, not because they are not well-meaning people. It is because it is a fiendishly risky and volatile investment. Even if you come into it with a lot of capital and a lot of expertise in running businesses, usually it is a very, very rocky road. I have dealt with a lot of fans. For example, when I was Chairman of Leicester City we had a fans directorate. We had money in from the Football League Trust and it worked well. They elected a respected local solicitor who had experience of sitting on boards of companies and he came along and represented the fans and we listened. That is a one-off example of how it worked well.

I had spent many years around the world working with employee directors and it worked fine. As a concept I do not have a problem with it, but when businesses are independently owned you have to let the providers of capital in that town make their own decisions. Some of them embrace the fans and say, "Come on in, talk to us. We will have committee meetings". Some of them do not. But while football clubs are private businesses, largely as long as they obey the law of the land and the rules of the league and the rules of the FA, you have to let them do it their way. I am not anti-fan involvement at all. At heart, I am a fan.

Q166 Jim Sheridan: My problem is that some of the current owners in British football do not have at heart the best interests of the clubs or the fans or the communities. That would be different if you had supporters owning clubs because they would have at heart the best interests of the clubs and communities.

Greg Clarke: The problem with that argument is not that it is not correct. I just do not know how to deliver it. For example, largely supporters-owned clubs over time get into trouble. They run out of money, because they put all their money in up front to try to buy the club or a share of the club and then they cannot compete in terms of salaries for players, etc. Let me give you an example of a good club, Exeter City, owned by the fans. Edward Chorlton is the Chairman. He was Chairman of the local authority. Great people, great little club, owned by the fans, struggling to compete, got relegated, and they are in League Division 2. That is not because they are not running the club well. It is just they do not have access to the money to compete. The question is not whether fans should own football clubs. Fans are just as entitled to buy football clubs as anybody else. It is a question of where they get the money from to be able to run the football club.

Q167 Jim Sheridan: I would like to develop that further but we do not have time, unfortunately. Just finally, every club or every association says that they want to have dialogue with the fans. What practical steps have we put in place for that to happen?

Greg Clarke: Every club has a supporters’ liaison officer whose job it is to structure the conversation with the fans so the fans are consulted. How effective that is depends on the mind-set of the people who own each individual football club. If they go into good-faith consultations with their fans about the big issues, it works. If they do not, it does not.

Q168 Paul Farrelly: I have to go before the next session, but there is something I wanted to ask. I wanted to address this issue from my own local experience. My club is Stoke City. It is a Premier League club and it is doing its best for the lower leagues because it is playing Torquay in a pre-season friendly very shortly. But we have another club-

Dr Coffey: Is that its charitable act?

Paul Farrelly: No, it is solidarity. We have another club in Stoke-on-Trent, which is the smallest city to have two professional football clubs, called Port Vale. We have recently seen Port Vale go into administration again. It has been protracted because one of the questions about the preferred bidder is certainly, "Does he have money and can he deliver?" It has been protracted because the Football League, having looked at it closely, has been diligent and the administrator, Bob Young, one of the best in the business, has been diligent as well. But Port Vale has a Supporters’ Trust, the Valiants, which was born out of a previous reconstruction and administration. Seeing Port Vale close up in terms of the vying for control, for whatever reasons, between different people to me shows first-hand that the Supporters’ Trust, which had all its different factions fighting each other, is not a panacea for all ills. Sometimes it is not appropriate, as you referred to, Mr Clarke, when the sums of money just get too big. Would you agree that Supporters’ Trusts and other forms of involvement that are put forward as something that should have to be forced on clubs are not the answer to different situations and different times in football?

Greg Clarke: There are very few panaceas available to solve our problems in football. Abolishing the football creditors rule moves problems around. It does not solve them; it moves problems around. You would end up with a different set of problems, which may or may not be less or more palatable. Fan ownership is problematic because you end up with a highly risky business with volatile funding requirements, with a democratic group of people who sometimes can agree on things but largely do not have deep pockets.

If you are going to move to a fundamentally different model of funding football clubs over the long term-and there are many around the world, for example, the MLS in North America. They have the problem. They have a highly regulated, centrally run organisation that does not do promotion and relegation. If you are in you are in, and if you are on the outside you are on the outside for ever.

The Bundesliga has a completely different model, which relies on money from fundamentally different sources. There are many, many models. We have a model in England that supports more professional football clubs than any in the world. The Football League is the fourth-best-attended league in Europe out of all of them. That gives engagement in a lot of communities with a lot of fans. Having been a fan and having engaged with football trusts and football fans’ trusts personally-when we were raising money they put £100,000 in for Leicester City-I would go round the pubs of Leicestershire with two or three other directors and we would give presentations in the back room. There would be 100 people with their pint who put their hand up-"Yeah, we’ll do 25 quid each". I have done it; I know what it is like. When you talk to the directors who represent them, they still go back to the pub after the half-yearly meeting and say, "Why can’t we buy Torres?" I am being a bit facetious. Yes, I have a propensity to be sympathetic towards fans and engage with them, but giving them the economic problems of football is not doing them or football any favours.

Paul Farrelly: Perhaps Torres, unlike Gary Lineker, did not want to live in Leicester.

Greg Clarke: Oh, that’s right.

Chair: I think we are going to have to call a halt there. Can I thank the three of you very much?

Greg Clarke: Thank you very much.

<?oasys [np[pg6,cwe1] ?>Examination of Witnesses

Witnesses: David Bernstein, Chairman, Football Association, and Alex Horne, General Secretary, Football Association, gave evidence.

Q169 Chair: Can I welcome for the final session this morning David Bernstein, Chairman of the Football Association, and Alex Horne, the General Secretary.

Mr Sutcliffe: David, we heard from supporters’ representatives this morning that they think that the FA has ceded power by the changes that were caused in terms of the new relationships. How do you see it and what is the motivation behind it?

David Bernstein: Can I first say that we have listened extremely carefully to your Committee’s views or recommendations and I believe that we have achieved a great deal. I think we have shown that football can reform itself. Football has been accused of being an industry that is incapable of that and I think we have shown we can do it. In fact, we have done it through a collective process. I disagree profoundly with the views expressed earlier that it would be better had each body reported individually. I think it was absolutely right of the Government to ask us to do it collectively because we have something that can be delivered.

I would like to address the profound question that you raised in the original report as to the nature of the Football Association. In fact, it is a governing body but it is also a representative body. There is no question about that. It is a members’ organisation. It is an association of interests and I think our structure fundamentally reflects that. We have a board that is partly representative and balanced. We have a shareholding structure where the National Game and the Professional Game have golden shares, where they have blocking rights, in effect. I think we have had to take fully into account that structure and the subsidiarisation nature and devolved decision making.

Now, the core group, which I have had the privilege of chairing, has been-and it has been an exhaustive process-a difficult process in many ways. It has not been a cosy agreement. There have been very tough negotiations within that body and the consultation, I have to emphasise, still continues. I know there have been, understandably, some questions about the level of consultation, but it has not finished yet. We have a lot to do still in consulting and in talking to our own Council and getting things approved through regulations.

The other thing I would just like to add, because it will touch on, I am sure, questions you will want to ask, is there were three distinct areas of FA operation. One is its corporate business-the biggest user, Wembley, the National Football Centre, Club England and so on, which falls fully within the FA’s clear mandate and authority. There is a whole regulatory side of the operation, which clearly again, although rather independently and separately, falls within the FA’s authority.

But there was the area of, you might say, representative and delegated matters where I believe we got a proper balance in bringing a great deal of clarity to what was a very confused situation. I do not think what we have arrived at is more complex at all. I think it will be simpler because it will be much clearer, and do a lot of tidying up. What we have done is delegated to those other bodies matters that reflect that part of our industry’s interests, i.e. the National Game and the Professional Game. Certainly, what we have will to some extent preserve the status quo because there are a lot of checks and counter-checks within what we have done. There will be areas in one of the categories, category C, of issues where change will only happen with the agreement of the National and Professional Game and the FA Board. If there is disagreement, then the status quo will prevail, which is not necessarily a bad thing.

I think we have made a great deal of progress. We have listened extremely carefully to what you said and I think, living in the real world, we have achieved a proper balance in terms of the governing nature of what we do and the representative nature of the organisation.

Q170 Mr Sutcliffe: As a consequence of that and to modernise, you believe it is right that the power should be shifted away from the FA Council in terms of a representative body? You think it is the right way forward?

David Bernstein: I think what we have done with the FA Council-or are doing, is that we are going to make it more effective. The FA Council at the moment spends a lot of time dealing with minutes, dealing with non-productive detail. What is intended is, first of all, all committees will report through the Board, either directly to the Board or through the PGB and NGB. There will not be less Council meetings but there will be less general Council meetings and some will be replaced by National Game Members Council. Frankly, if you sit in the Council meeting and a lot of National Game stuff is being discussed, the Professional Game people are often not very interested and nor need they be in some business. I think it will lead to a much better focus of the Council.

What we have also managed to achieve, or potentially, is this reduction in shareholder voting requirement, i.e. we will get to a 66%, or two-thirds I think it is, threshold rather than 75%. That is very important because our shareholders are fairly conservative and in the past there have been one or two issues that have been in grave doubt because of the 75% threshold. I think we will have achieved something there. I think it will be more effective and more efficient.

Q171 Mr Sutcliffe: Do you think it will be more open to change? Do you think there will be new things that will be decided, innovative things?

David Bernstein: I think the intention will be that serious matters will be debated in Council. At the moment, I do not think Council gets access. It gets access to information but they are not seriously debated. It is not a parliament in that sense for football. Our Parliament debates heavy, serious matters. Council does not do that and I think the structure of Council meetings and so on will enable it to debate the heavy matters and spend its time more efficiently.

Q172 Steve Rotheram: Can I, first of all, apologise, Chair, because I have to go shortly after my question-so it is not in response to whatever Mr Bernstein might say. You have just touched on the question that I have, and certainly in the last panel it was addressed as well, and that is about the size of the FA Board. Is there now a reluctance to go any further because you believe that you have complied with one of the recommendations from the Committee?

David Bernstein: Well, I think we have achieved a fair amount. The first thing we managed to do was get two independent directors on the Board. That was a real plus and I have to say we have already seen the benefits of having them on board. They are two excellent people. The second thing is we managed to get the National Game and the Premier League to reduce their numbers by one each, so we have the Board back to 12. That is two things.

I think this question of balance that has been raised is important. We now have a 4-4-4 formation, which still gives a large level of representation for National Game and for Professional Game, but is a better balance than we had before. If you ask me what I think, my optimum aim here was to get to 10. I tried very hard to get to 10, i.e. 3-3-4, rather than 4-4-4. It was not possible and I think we have covered that already. The Football League did have issues, which I have some sympathy for, I have to say, and we got rather stuck and I am very pleased that, because of two people going, we have managed to get the Board back down to 12 painlessly.

I also would like to say when I first appeared before you I had only been Chairman for a month, but having now had a year and a half at it or a year and a third, I have been impressed with the workings of the Board. It has worked well. We have had a lot of big decisions to take. There has been good challenge from the Board, but I think it has worked very well indeed. It has also been very effective in its delegation. I am also Chairman of Club England and, with regard to the England manager change, which I thought was one of the most important things that we had to do, the Board delegated that responsibility to four of us. It allowed us to carry out the whole process efficiently, and discreetly, in I think a much better way than had happened previously, and allowed the Club England board to come to it with a final recommendation.

On having expertise at the lower levels-Club England has Trevor Brooking as a member-we have good elements of expertise and independence at other levels within the FA. We brought two women directors on to the Wembley Stadium board, two very good people, and they are bringing also independence and fresh views. In fact, we are embedding independence within the FA at a number of different levels.

Q173 Steve Rotheram: Given that was a painless reduction, in your own words, are there now any plans to put some impetus into further changes? We know that there is an impasse between the Football League and the FA in regard to tit for tat; one will not reduce theirs because the other one refuses to. Are you going to try to tackle that or are you quite happy with things at the moment?

David Bernstein: To be honest, I think, having done what we have done, we should let this bed down and get on with our business.

Steve Rotheram: So there are no plans for further changes?

David Bernstein: No, there are no plans to go below 12 at this stage.

Q174 Dr Coffey: I need to declare an interest. I am still the parliamentary Fellow to the FA, I think until the end of the season or the beginning of the next season, and I have attended games as a guest of the FA or its subsidiaries during that time. Why do you think the football family rejected term limits on the Council? I am sure it will not be too different an answer from Mr Burden.

David Bernstein: No, I cannot add a great deal to Roger Burden. I have to say that on the international side of things the football family element and people knowing each other well and people who have learnt to trust each other and work together is very important. When I have been going around Europe and other places talking to people from other associations, they do benefit from a great deal of long-term continuity of people, and those relationships are important. I am sure he will not mind me mentioning his name-Barry Bright, who is leader of the Council and does a huge amount of international work, is greatly liked, greatly respected. I have seen him in operation and those relationships are very valuable to us. I think one could say that, from an international point of view, longevity and people knowing each other in that family sense is a very positive thing.

Q175 Dr Coffey: Remind me, does Mr White sit on a specific committee?

David Bernstein: Bright, sorry.

Dr Coffey: Sorry, Bright. Sorry, Barry White is the singer, is he not; or was the singer? Mr Bright, I assume he sits on a specific committee?

David Bernstein: I think he is on more than one committee, yes, but he also represents the Association in many different meetings and councils. He is unsparing in his endeavours going to these things.

Q176 Dr Coffey: Out of the entire number of people on the Council, which is over 120 from memory, how many are involved in that kind of international work? I do not know if Mr Horne knows.

Alex Horne: It is probably a dozen or so across the Professional Game and National Game whom we would class as ambassadors out in Europe attending matches and representing the Football Association, as well as sitting on committees of UEFA and FIFA-12 to 18.

Q177 Dr Coffey: That is between 10% and 15% of Council, is that right?

Alex Horne: Yes, maybe.

Q178 Dr Coffey: How has that changed? I hope you can understand, I am just trying to probe the reason why, given this continuity-I am not disrespecting it. I am just trying to see how it stacks up. How has that changed in the last, say, 10 years? Have some new people come into that group of our ambassadors?

Alex Horne: Yes. We went through the committee list a year ago. They tend to be in place for three or four-year blocks on UEFA committees and in those roles.

David Bernstein: Sorry, if I may add to that. One of the criticisms of the FA in the past has been its poor relationships with FIFA, UEFA and so on. In order to move that agenda forward, we have worked very hard at trying to get additional people on to committees. I think that once people are on those things, it is good to try to maintain that continuity. As I say, the relationships and so on are unbelievably important. You get an awful lot done. I believe that my relationship with Michel Platini over the last year or so has helped us enormously in a number of areas. The relationships are very important. Even if the percentages are not great, if it is 10% to 20%, they could be a very, very important 10% or 20%.

Q179 Dr Coffey: Okay. I will give you credit, Mr Bernstein. It took a great act of personal leadership to do what you did at the Congress last year and you had limited support from elsewhere. In terms of developing that relationship, you are talking about getting more people on to committees.

David Bernstein: Yes.

Dr Coffey: But when I went to some events and met other Council members who have been very dedicated to the game-I do not question that in any way-we got talking about the report. Although I have not made it to a Council meeting yet as an observer, and I would still love to try to get to one, I got to talking about why some of the changes that perhaps we are talking about didn’t come in. Dare I say it, it is like being an MP in a party. You do not want to be seen to be rocking the boat in public. Is there a way that you think that this new counter-proposal will allow, encourage if you like, the Council members to be their own critics and their own challengers, as opposed to it being MPs or others harping from the outside?

David Bernstein: By that you mean the general package of proposals we are talking about here?

Dr Coffey: Yes.

David Bernstein: Well, I would hope so. I think a modernisation of process, making the meetings more effective, enabling the councils perhaps to challenge more effectively, is a good thing. I hope the answer to your question is yes.

Q180 Dr Coffey: Mr Horne, do you have a view on that?

Alex Horne: I would go further than that and say that I think they demonstrated an openness to considering reform. The adoption of the two new independent directors was something David took on personally when he joined, and Council were very openminded about it. There was a job to do. David went right round the country and saw as many people who wanted to see him as possible, half a dozen roadshows I think it was, and talked through the logic around good corporate governance, suggesting a couple of independent board members on the main board could add value to decision making. It was very, very, very strongly supported-high 90% support in Council and then with the shareholders.

I think they are genuinely open to reform and progress and I think they have embraced the process of selfreform that has been led by David and the core group. They support, at a high level, the proposal that has come in front of the Select Committee. There is detailed work to be done. We are in the middle of the process and we will now refine and clarify some of the points of concern. We have heard some points of concern today from people who have not yet been perhaps consulted as much as they would like, and that is where we are. This is the point in time where, at a high level, we think this is a better structure. We now need to fill in some of the detail. But to answer your direct question, I think the Council members and shareholders are up for self-reform.

Q181 Dr Coffey: The Chairman of the Board has a term limit and I support that. Interestingly, there is a difference in age limits on the Board and the Council. What is the rationale for one being 70 and the other being 75?

David Bernstein: I would rather Alex answered that question.

Alex Horne: I honestly cannot remember if there was a specific logic to it when it was first introduced. It came about around the time of the Lord Burns proposals, so whether it was a Lord Burns recommendation I do not remember. I think the reality of board work is that with the levels of corporate governance around the Board-David has already outlined the roles of the Board in terms of overseeing the construction and now the operation of Wembley Stadium, the construction and now the operation of St George’s Park, as well as the regulatory detail and the other aspects of the FA Board’s work-there is a high level of corporate governance required at that level. They are Companies House directors, so the level of accountability and responsibility on a board director is higher than that on a committee. That may explain why it is a younger man’s role.

Dr Coffey: By all of five years. Well, Mr Chairman, I will not press further. We have a fairly broad view from there and I do hope the Chairman of the FA might allow me to pop in to observe a Council meeting before I give up.

David Bernstein: I am happy for you to do that.

Chair: She can report back to us.

Q182 Damian Collins: Just following up one aspect of my colleague’s questioning; you talked about the football family and the relationship of the FA with international bodies. Last week we saw the publication of the ISL court papers relating to FIFA, which probably exposed the biggest sporting corruption scandal in history, where the current Honorary President of FIFA, still in post, and Mr Teixeira, who until very recently held an extremely senior position within the organisation, are guilty of having received tens of millions of pounds-worth of bribes. But probably worse than that, the ISL court papers say that Sepp Blatter knew about the bribes when they were paid; certainly by his own admission knew about it a couple of years after they were paid, and yet sat back and allowed these people to continue to hold very senior positions within FIFA for over a decade. As you probably know, the President of the German Football League has said he feels that Sepp Blatter should resign. In the light of the new information published by the ISL court papers I wondered whether you, Mr Bernstein, think Sepp Blatter should resign.

David Bernstein: I am certainly not going to say that today. I stood up strongly last year in terms of the election itself and of proper governance and I think that has probably helped for a real feel of change and reform to begin to take place within FIFA. I have to say I am genuinely encouraged over the last year as to what I have seen. Having spoken to a lot of the more progressive chairmen of some of our European countries within UEFA-and some of these people are intrinsically involved in the change-there is a real feel, and I think I have some confidence in it, that there is a real desire and understanding that change has to take place. Clearly, these accusations are absolutely awful. I do not believe they are proven as yet. Let us see where it goes. I am certainly not going to make calls for resignations sitting here today.

Q183 Damian Collins: This is a very serious matter and it needs to be discussed as a matter of urgency by the FIFA Council. That should include whether Mr Blatter is fit to hold office, as well, as part of that discussion.

David Bernstein: Heaven forbid, but if you had this sort of thing in the UK within the FA that would certainly be taking place. We are one nation out of over 200. Never forget that when we are talking about FIFA. The way we perceive things, even the way that UEFA perceives things within FIFA, does not necessarily lead to the sort of results or changes that we would want. Of course, I sympathise with where you are coming from, we have to, but I think we need to see where this process goes.

Q184 Damian Collins: I suppose there is the fact that the President of the German Football League-and I appreciate he is not the President of the German Football Association-may not be a lone voice this time and there will be other people that are prepared to speak out as well, but Mr Blatter has also hinted at extending his term of office by seeking reelection again. That is something he said he would not do. Is that something you would support?

David Bernstein: I would not support that, no.

Q185 Damian Collins: Good. We can move back to the report then. We have already covered the football creditors rule in some detail. I know you will be familiar with the view of the Committee on that. I just wanted to ask two things about it. One is, why wasn’t the football creditors rule and the Committee’s recommendations on that covered in the joint response to our report?

Alex Horne: Particularly for the simple reason that it was under legal protection at the time. There was a live case ongoing. One of the things we have sought to do throughout the report is to create a structure that can consider these things clearly. I think the reality of the rationale for football creditors has been rehearsed a lot in front of the Committee, both last time and this time. It is a moral quandary for all of us, but balancing the protection of the other members in that competition, protecting them arguably from themselves in terms of debts they have exposed themselves to and a club that finds itself in difficulty, is a fundamental rule that they all signed up to when they joined the league. It is a rule that they play to every year.

To dismiss that needs careful consequential thought and, therefore, what we have sought to put in place we think is a structure that can consider it in the future. The Regulatory Policy Group, the Professional Game Board and the leagues can consider this and come to a view. If they do not come to a view, status quo prevails. That is one of the things that is clearly set out in there, but we can now encourage the debate around such reform. If there is a consensus view we will find an alternative, but it is not straightforward and there is not an obvious alternative. We have discussed it. You have heard the Football League and the Premier League reference it in their evidence. There is not an immediately obvious alternative. You would need one and it would need to be introduced carefully, and I think we are still under legal protection because I think there are still appeals live around the recent case.

Damian Collins: I don’t think there is an appeal. Well, Mr Scudamore told us last week they were probably not appealing.

Alex Horne: Okay.

Q186 Damian Collins: You could say there is a simple redress, which is that clubs have to treat all secured creditors simply. You can amend the law to make that happen if the clubs will not do it voluntarily. Then it is a matter for the leagues to say, "If I sold you a player and you have not paid me the money, does that mean that that club should be expelled from the league or should I be more careful about whom I enter into financial arrangements with in the future?" I think that is a debate within the league. I do not think it has to follow that the direct consequence of getting rid of the football creditors rule is that loads of clubs will be expelled from the league, because that is ultimately a matter for the leagues to determine themselves. I suppose my question to you is, the joint report suggests that the FA is withdrawing from oversight of some commercial financial matters. I wonder whether what this highlights is a need for someone above the leagues to have a role in saying, "Regardless of what you want to do for yourselves, regardless of what you think is in the best interests of your members, we think as the FA what you are doing is not acceptable". There should be a role for that level of intervention and dialogue.

Alex Horne: There is certainly a role for that level of dialogue. What we have not at the moment drafted in here is a role for that level of intervention. It is the difficulty we have talked about previously in terms of the role as a governing body. We very, very specifically separated out implementation, which was a clear recommendation from you, and we wholeheartedly agree with that. I think the role of the FARA in overseeing implementation, including and up to intervention, is entirely right.

Where rules exist and they are not being carried out appropriately, the back-stop of intervention exists. That arguably is not clear or does not exist at the moment, so there is a significant improvement there in terms of clarity and efficiency of process. Where we are, in terms of regulatory policy, there is a clear framework now and absolutely the FA Board and the regulatory policy group can cajole and encourage debate on a topic. But it is one of those items-and the list is set out in the response-where we believe it is appropriate that the FA Board cannot intervene and say, "This has to be the way it is, even if 91 of 92 football clubs do not agree with us", because we do not think that is the right way to make regulatory policy.

Q187 Damian Collins: Lastly, do you appreciate the concern that people may have that, looking at the recommendations as they stand at the moment, this level of financial oversight and financial performance of the clubs, which is one of the biggest issues of concern in the game-that it appears in some ways the FA will have less involvement in those issues in the future under the new regime?

David Bernstein: That is not the case, sorry. We are talking about financial oversight and I think the potential role of the FARA has been underplayed. I think it is an important move forward that the FARA, an independent organisation, will have much greater powers than previously. It will have powers to oversee directors’ and owners’ tests. Greg Clarke said, "Be careful what you wish for", but if we wish for it we will be doing it. Ground changes, for example, will be overseen by the FARA. It will have powers of audit and direct involvement. I think that is an important step forward for the FA. On those big issues, what the FARA or the FA will not be able to do is get itself involved in ticket prices for a particular club or, as Alex said the other day and it is an extreme view, tell a club it has to have all its seats painted green. That will not be within the authority of the FA or the FARA, but on the big issues, including new ownership whether the financial plans of the new owner make sense and add up, they will be able to look at the business plan. They will be able to look at the cash flows and be satisfied that the new owners are fit and proper in every sense, including the financial sense. I think that is a big step forward.

Q188 Damian Collins: One final question is on ownership. The Football League still do not require public declaration of an interest in a club if it is below a certain level. The Premier League is saying that they will. This obviously is quite an important issue. Do you think there should be a common approach or are you happy for the leagues to run their approaches separately, but you will have oversight of whether they are obeying their own rules or not?

Alex Horne: My instinct is there has to be a common approach. We have already heard from Greg and we all know about the free-flowing nature of football clubs up and down the pyramid. I think there should be a common approach and I think we would support the openness that was called for earlier. I think Greg himself said that they would encourage open and transparent disclosure of ownership of Football League clubs.

Q189 Damian Collins: In the case of Coventry, that might mean you would require a declaration of who the investors in the trust are that own the club?

Alex Horne: Yes. Bearing in mind we have not moved to this system yet, when it is moved over to the FARA I think that would be a requirement, yes.

Q190 Mr Sutcliffe: Just quickly on Supporters’ Trusts, we heard from the supporters this morning the issues around funding of supporter organisations and the FA fund. Do you think there should be a more generous settlement, if you like, for a long-term relationship with the supporters? Just briefly, one of the things that I did as a Minister was support Supporters’ Trusts, and I used Arsenal Supporters’ Trust as a model. Are you happy with what is happening in their relationship with the new owners of Arsenal?

Alex Horne: Yes. As far as ownership models go, we are a free-market economy. We would encourage all sorts of ownership models. I think the Arsenal model, the fan-share model, is a fantastic model. What is more important is that with the leagues we have, again as a response to the report, encouraged all clubs to adopt supporter liaison officers to encourage club forums. Again, I think as Greg said, it is now over to the clubs to make sure that these are effective. Information flow between clubs and their supporters is hugely, hugely important. That is the most important relationship for a supporter with their own club and we will continue absolutely to support that.

Q191 Mr Sutcliffe: You see that as a separate issue, as opposed to funding the national organisations, Supporters Direct, FSF? Do you think they should be supported more longer term?

Alex Horne: Yes. We have put in place commitments to FSF. We are also part of the fan fund that was referenced earlier. So we sit on the body that makes the determination about who should get the money. Mr Sanders made a point earlier and I think both organisations sitting here today would recognise that they need to be more self-sufficient. I think Level Playing Field as an example of another fan-interest body would demonstrate that that is possible. They have succeeded very recently in attracting quite a lot of investment from various sources. I think we would encourage self-sustainability models. We make an offer to Supporters Direct and we would make the same offer to FSF if it helped to accommodate either or both organisations. We happen to have office space at Wembley and probably at St George’s Park now if it helps. We would be open to conversations with either or both organisations about office space, and we continue to support FSF and we have budgeted to continue to do so.

Q192 Dr Coffey: There was one element of the report where you said the women’s committee is going to report straight to the Board. I know personally how many Council members are very keen to see the women’s game develop, and we are now in the second season of the Women’s Super League. Is there anything you think you could do to try to persuade the member clubs of our established teams to do a bit more on hosting teams? Neither of the Manchester sides has a team. I just wondered about your thoughts on that, and then I have a separate one about grounds.

Alex Horne: Yes. Again it is a personal decision for clubs, although the example of Arsenal is a brilliant example where they have always been very, very supportive of the women’s side and they have been incredibly successful, champions of Europe multiple times. They invest a lot of money, multiple hundreds of thousands, in sustaining that women’s football club. That is a decision that other clubs have chosen not to take. Now, I think, as a result of our investment in the Women’s Super League-we invest over £1 million a year in sustaining those eight clubs and we are about to invest even more money in sustaining a new pyramid below that. We have just signed off on that for the next four years. The FA Board take their investment in women’s football incredibly seriously and I think, as a result of that, you are seeing other clubs become interested in sustaining their own women’s sides. I think there are other clubs who are now looking at whether they should embrace or reembrace their women’s sides. I think it is a process that will bear some fruit. Our investment in the Super League we are very proud of. It is a semi-professional game, but we have great hopes that it can grow-grow in participation numbers, grow in broadcast numbers, grow in sponsorship numbers-and we hope become sustainable over time and, either way, be of more interest to the brotherly clubs, if that is the right expression.

David Bernstein: Sisterly clubs.

Alex Horne: Sisterly clubs.

Q193 Dr Coffey: I hate isolating people, or singling them out, rather, but I am just thinking of David Gill, of course, who is on the Board of the FA. Admittedly, he is there on behalf of the Premier League, not on behalf of Man U. I think it would be a fantastic gesture to see perhaps a United-City initiative on this thing. The other question was about grounds. I attended the Arsenal v Chelsea game at the Emirates and it produced, I think, one of the biggest crowds of the season. I am all for endorsing and trying to encourage that, as opposed to, dare I say it, trying to find somewhere 20 miles away from the actual home stadium of the club. Is there anything you think you could do to try to encourage our clubs to do that?

Alex Horne: I think one of the important things is to house the women’s Super League clubs in good facilities. One of the problems the women’s game has had is priority, pecking order. The league would not play for weeks and weeks in a row over the winter because they are second and third priority to boys’ and men’s leagues and they cannot get the pitches. The facilities have always been a problem. Part of the commitment to being a Super League club and to being licensed as a Super League club is a facility with good attendance and sustainable attendance. Our ambition is that we would have 1,000 people watching every game of Women’s Super League. Those are big numbers. The Scottish Football League would look for crowds of that size. We are trying to be realistic. They are big numbers in our own pyramid in terms of the men’s game and there is no point trying to, today, expect a women’s game to fill the Emirates Stadium week in, week out. Where they can bring it to the Emirates Stadium, it is fantastic as a showpiece for the sport.

Chair: Good. Thank you very much, Mr Horne and Mr Bernstein.

Alex Horne: Thank you.

David Bernstein: Thank you.

Prepared 28th January 2013