Post by QPR Report on Dec 24, 2009 7:23:18 GMT
David Conn/The Guardian
The noughties: a decade when football's rulers ducked responsibilityThe game boomed but so did insolvencies as the government called on football to rethink its relationship with money
When you take a longer view of English football than this week's managerial ousting or the latest results, to consider how the game developed over a whole decade, Sheffield Wednesday is a reliable place from which to get your bearings.
It was at Hillsborough, of course, that football's name as the people's game foundered in disaster on a landscape of neglect at the end of the 1980s. Ten years ago, at Christmas 1999, the Leppings Lane end in which 96 Liverpool supporters died had long become all-seated, and Wednesday's stint as a member of the breakaway, big-money Premier League was about to conclude in relegation.
Under the club's chairman, Dave Richards, a local engineer who joined the board six months after the disaster, and Trevor Francis as manager, Wednesday had, with the rest of the top clubs, enjoyed the luxury of no longer sharing their television money with the other three divisions of the Football League. Richards and his board had aimed to float on the stock exchange, like other Premier League clubs whose flotations made personal fortunes for their chairmen, but financially they were stricken by their excursion into the foreign player revolution.
Eric Cantona had spent a week at Hillsborough on trial in 1992 but the man who would define the elan of overseas stars left for championships with Leeds and Manchester United. Wednesday spent their TV windfall on outsized wages for the Holland midfielder Wim Jonk, the Belgium striker Gilles de Bilde and the Dutch striker Gerald Sibon. They were not exactly catalytic. Ten years ago this week Wednesday, bottom of the league, lost to Aston Villa, a 13th defeat in 17 matches.
Earlier that year, Richards had taken temporary charge as Premier League chairman following the exit of Sir John Quinton. Richards's appointment was supported by Ken Bates, then the Chelsea chairman, and approved by the clubs without a formal recruitment process.
In February 2000, with Wednesday looking certain to be relegated, Richards left the club to become the first paid chairman of the Premier League, a part-time position for which his salary in the first full year was £177,000. At the time his own business, Three Star Engineering, was in financial difficulties; in June 2001 it was placed in administrative receivership with debts of more than £1m.
Sheffield Wednesday went down with debts of around £20m from which they have never recovered. Richards remained Premier League chairman throughout the decade, becoming a Football Association director among several other senior administrative positions.
If the 1980s were a story of a great sport crashing into disaster because those who ran the game never kept pace with their responsibilities, the noughties can be viewed the same way. Football continued its 1990s revival, money poured in, the clubs became slicker on and off the field, yet the handling, harnessing, of the game's challenges lagged behind its development. The grounds remained safe because, after Hillsborough, that was the law. Even Margaret Thatcher's Conservative government was not prepared to leave safety to the clubs any longer.
Ministers in the new Labour government genuinely supported football, unlike Thatcher, who, according to her former minister Kenneth Clarke, had regarded fans as another "enemy within". Labour recognised that the commercial free-for-all which followed Hillsborough – the Premier League's breakaway, ticket price increases, players' wage inflation, club flotations, withering of the grassroots – had not been the best and only way the game could have rebuilt.
The government established the Football Task Force within weeks of winning its 1997 landslide, and its final report, on the bitterly debated financial issues, was delivered 10 years ago yesterday. The chairman, David Mellor, had striven for unity in other areas – in a remarkable accord, the Premier League agreed to contribute 5% of its next TV deal, matched by the FA and government, to improving the wastelands on which England's amateurs mostly play the game. Yet on the questions of financial control, the task force was divided, and two separate reports were issued.
The first, approved by a majority, including fan groups and academics, recognised that football was basking in success, but argued it needed reform to manage its good fortune in the interests of all. The report recommended a "fit and proper persons test" for club owners, democratic representation for supporters, a "Football Audit Commission" to oversee the game's governance, and reduced ticket prices "to embrace those who have felt excluded from football". Research had shown that although crowds were flocking back, many fans who had stayed loyal throughout the grimy years had been priced out, and the average age of a Premier League football fan climbed over the decade to 44.
The other report was produced by the FA and the Premier and Football Leagues themselves. It said they were "impressed" by supporters' trust initiatives, agreed that clubs should implement codes of conduct, even suggested an "independent scrutiny panel" to report on how well the game was governed. But repeatedly, the football authorities' argued against introducing any rules.
Clubs must have "freedom to act", the report said, and in a phrase of heroic confection, the men running football argued their "primary response" should be: "To adopt the contemporary principles of customer care and a more inclusionary approach to key stakeholders." With that clarity and keenness of vision, the game's rulers took football into the 2000s.
The Premier League was on the threshold of its next TV deal, from 2001-04; the live rights went exclusively to Sky again, and the total for the 20 clubs came in at £1.6bn.
Roy Keane, Manchester United's captain, made his memorable remarks about home supporters, having "probably the prawn sandwiches" and being unable "even to spell football, let alone understand it", in December 2000. At the time, Keane himself was reported to have set the new benchmark for players' wages, holding out for £52,000 a week.
Yet even such galactic earnings were eclipsed by the takings of chairmen selling out their shares. Alan Sugar, who had described the leaking of money to players as "like drinking prune juice while eating figs", made £22m when he sold part of his Tottenham stake to the investment group Enic in December 2000.
Martin Edwards, whose father, Louis, accumulated his majority Manchester United stake in the 50s and 60s, would make £93m from selling shares, in chunks, on the stock market, before the Glazer family bought United and ladled their borrowed multimillions on to the club. David Moores, the Littlewoods heir who had invested around £12m for his stake in Liverpool, would be paid £89m from selling his shares to Tom Hicks and George Gillett, who also borrowed to buy the club and made it responsible to pay the debt.
As Sky's profits soared from expensive subscriptions to homes and pubs, Carlton and Granada's joint venture, ITV Digital, paid £315m for three years of Football League rights. In April 2002, after one year, the company collapsed. Carlton and Granada refused to stand behind their company's agreement, Championship clubs each lost £4m they had fairly budgeted to receive, and the league plunged into crisis.
No Premier League club has collapsed into insolvency since the 1992 breakaway, but their overspending has been exported through relegation. Leeds, top of the Premier League 10 years ago with David O'Leary's sprightly side, "lived the dream" after that on borrowed money but did not fall into their £35m administration until 2007, under Ken Bates's chairmanship, and the unidentified offshore owners backing him. In 2002, of the three clubs relegated from the Premier League, Derby County were placed into receivership, and Leicester and Ipswich collapsed into administration.
Football, in its boom time, saw 40 professional clubs fall insolvent, leaving millions of pounds unpaid in tax, to police, fire and ambulance services, to hundreds of small businesses and, in all cases, to St John Ambulance. Yet the leagues' rules require that "football creditors" – other clubs and the players' rocketing wages – must be paid in full. Leeds owed HM Revenue and Customs £7m, West Yorkshire ambulance service £8,997, St John Ambulance £165, and Bates's backers' first offer, accepted by the administrator, KPMG, was to pay those creditors 1p in the pound. The former players still owed money from Peter Ridsdale's dream time all had to be paid in full, including, for example, Danny Mills, owed £217,000 on a contract which had ended three years earlier.
The grimmest spectacle in a gallery of mismanagement came at Chesterfield, the fourth-oldest professional club in England, formed in 1866. In May 2000 the club had been "bought" by Darren Brown, 29, who had, it turned out, borrowed the money to do so, then emptied the club of cash to pay his lenders and himself.
Brown was investigated by the Serious Fraud Office and ultimately sentenced to four years in prison after pleading guilty to two charges of fraudulent trading. The club nearly went to the wall; it was saved by local businessmen in partnership with the Chesterfield Football Supporters Society, a supporters' trust newly formed as at clubs elsewhere to salvage the heritage from the wreckage.
An irony of football's jolt into finally recognising it did need some rules to protect its integrity in the cash cascade is that it was led by Lord Mawhinney, a former Thatcher minister. Mawhinney saw that the sport is not a free market, and that the Football League needed reforms to help it emerge from chaos. He was tough enough to insist solid changes were necessary, not waffle about "a more inclusionary approach to key stakeholders". The Football League introduced the game's first "fit and proper person test" in 2004, persuaded significantly by Darren Brown's pillage. Nobody convicted of a fraud offence could any longer be a director or 30% owner of a club, nor could anybody who had been involved with two club insolvencies. Observers noted that this would not have prevented Brown's takeover, because he had no convictions before he was handed the keys to Saltergate.
The Premier League followed, introducing the same test, five years after insisting in its task force report to the government that no new rules were needed. The league was flourishing, glittering, but facing a host of new challenges. Chelsea, in 2003, and now Manchester City, were bought by men from the world's rich list, willing to pump huge money in to increase players' wages and so skew competition. Other clubs were overspending to keep up, relying on burgeoning loans, from new owners or increasingly jittery banks. The Glazers' and Hicks and Gillett's "leveraged" buyouts were to saddle Manchester United and Liverpool with those enormous debts, which look to be biting at the decade's end. Contemplating their openness to all this, the Premier League introduced the rule designed to deter a small-time chancer in Chesterfield. And they wanted a pat on the back.
Mostly, the government acquiesced. The then sports minister, Richard Caborn, another Sheffield man, grew close to Richards, who was knighted for services to sport, largely for his work as chairman of the Football Foundation, which distributes the professional game's money to the grassroots.
Caborn, in tandem with Richards, seized on the 2004 sex saga involving Sven-Goran Eriksson, the England coach, the FA's chief executive, Mark Palios, and the secretary Faria Alam to demand a "structural review" of the governing body. That, carried out by the former Treasury mandarin Lord Burns, suggested modest changes, principally an independent chairman and two non-executive directors, which the Premier League itself does not have.
Lord Triesman, the former Labour Party general secretary and junior Foreign Office minister, was appointed as the new FA chairman, another interesting departure from the previous orthodoxy that businessmen must run everything. Triesman demonstrated that he wanted to lead reform, breaking with his predecessor Geoff Thompson's habitual public silence, and expressing reservations about the "Game 39" plan for global expansion of the Premier League's chief executive, Richard Scudamore. Last October Triesman also warned of the danger, in an economic crisis, of professional football carrying debts which he actually underestimated at £3bn. Triesman found common ground with Michel Platini, the president of Uefa, who was feeling his way towards tackling excessive debt and "sugar daddy" owners, and Triesman also suggested to the government there should be a review of the game's financial affairs.
The response to this for the FA chairman has, mostly, been relentless attack. Andy Burnham, who as a young task force administrator had helped secure government backing for the Football Foundation and the establishment of Supporters Direct to encourage supporters' trusts, returned as minister for culture, media and sport nine years later and called for football to "reassess its relationship with money". Burnham asked seven specific questions, calling for a unified response from the two leagues and FA, but they replied separately. The Premier League, which had furiously rejected Triesman's warnings, nevertheless agreed to take debts more seriously and to investigate the solidity of the money when a club is taken over. The Football League cited "competitive balance" – the financial gap between it and the Premier League – as football's "greatest challenge", but still there are no moves towards seriously addressing it.
Triesman proposed strengthening the FA's role in financial governance, but he was shot down by the Premier League representatives who sit on the FA's own board. These internal politics, long the greatest barrier to genuine reform of football, spilled over into the FA's bid to host the 2018 World Cup. Last month Sir Dave Richards resigned from the bid's board – prompting another deluge of negative, anti-Triesman coverage – in protest, reportedly, about the precise role Richards would be given and how far he was consulted on key appointments.
Over the decade, the former Sheffield Wednesday chairman has rubbed shoulders and made alliances with football leaders all over the world. He was paid £350,000 last year as the Premier League chairman. His former club ended the decade with £26m net debt, mired in a Championship relegation battle.
For the families of those who died at Hillsborough, the 20th anniversary in April saw a wholesale change in the way the disaster was viewed and reported. In place of false accusations made against the fans which had lingered for 20 years, there was universal sympathy for the families and a recognition that their treatment by the police and legal system had been a travesty. Prompted by Burnham and the junior justice minister Maria Eagle, the government promised that all documents held by the police and public agencies will be released.
For the families, the purpose is to pore over the whole, horrible truth about what happened and maybe, after that, be able to grieve properly, their fight completed.
After the disaster football moved on without much of a backward glance. Reform, the game's history tells us, takes years to catch up.
www.guardian.co.uk/sport/david-conn-inside-sport-blog/2009/dec/23/noughties-decade-review-football-money
The noughties: a decade when football's rulers ducked responsibilityThe game boomed but so did insolvencies as the government called on football to rethink its relationship with money
When you take a longer view of English football than this week's managerial ousting or the latest results, to consider how the game developed over a whole decade, Sheffield Wednesday is a reliable place from which to get your bearings.
It was at Hillsborough, of course, that football's name as the people's game foundered in disaster on a landscape of neglect at the end of the 1980s. Ten years ago, at Christmas 1999, the Leppings Lane end in which 96 Liverpool supporters died had long become all-seated, and Wednesday's stint as a member of the breakaway, big-money Premier League was about to conclude in relegation.
Under the club's chairman, Dave Richards, a local engineer who joined the board six months after the disaster, and Trevor Francis as manager, Wednesday had, with the rest of the top clubs, enjoyed the luxury of no longer sharing their television money with the other three divisions of the Football League. Richards and his board had aimed to float on the stock exchange, like other Premier League clubs whose flotations made personal fortunes for their chairmen, but financially they were stricken by their excursion into the foreign player revolution.
Eric Cantona had spent a week at Hillsborough on trial in 1992 but the man who would define the elan of overseas stars left for championships with Leeds and Manchester United. Wednesday spent their TV windfall on outsized wages for the Holland midfielder Wim Jonk, the Belgium striker Gilles de Bilde and the Dutch striker Gerald Sibon. They were not exactly catalytic. Ten years ago this week Wednesday, bottom of the league, lost to Aston Villa, a 13th defeat in 17 matches.
Earlier that year, Richards had taken temporary charge as Premier League chairman following the exit of Sir John Quinton. Richards's appointment was supported by Ken Bates, then the Chelsea chairman, and approved by the clubs without a formal recruitment process.
In February 2000, with Wednesday looking certain to be relegated, Richards left the club to become the first paid chairman of the Premier League, a part-time position for which his salary in the first full year was £177,000. At the time his own business, Three Star Engineering, was in financial difficulties; in June 2001 it was placed in administrative receivership with debts of more than £1m.
Sheffield Wednesday went down with debts of around £20m from which they have never recovered. Richards remained Premier League chairman throughout the decade, becoming a Football Association director among several other senior administrative positions.
If the 1980s were a story of a great sport crashing into disaster because those who ran the game never kept pace with their responsibilities, the noughties can be viewed the same way. Football continued its 1990s revival, money poured in, the clubs became slicker on and off the field, yet the handling, harnessing, of the game's challenges lagged behind its development. The grounds remained safe because, after Hillsborough, that was the law. Even Margaret Thatcher's Conservative government was not prepared to leave safety to the clubs any longer.
Ministers in the new Labour government genuinely supported football, unlike Thatcher, who, according to her former minister Kenneth Clarke, had regarded fans as another "enemy within". Labour recognised that the commercial free-for-all which followed Hillsborough – the Premier League's breakaway, ticket price increases, players' wage inflation, club flotations, withering of the grassroots – had not been the best and only way the game could have rebuilt.
The government established the Football Task Force within weeks of winning its 1997 landslide, and its final report, on the bitterly debated financial issues, was delivered 10 years ago yesterday. The chairman, David Mellor, had striven for unity in other areas – in a remarkable accord, the Premier League agreed to contribute 5% of its next TV deal, matched by the FA and government, to improving the wastelands on which England's amateurs mostly play the game. Yet on the questions of financial control, the task force was divided, and two separate reports were issued.
The first, approved by a majority, including fan groups and academics, recognised that football was basking in success, but argued it needed reform to manage its good fortune in the interests of all. The report recommended a "fit and proper persons test" for club owners, democratic representation for supporters, a "Football Audit Commission" to oversee the game's governance, and reduced ticket prices "to embrace those who have felt excluded from football". Research had shown that although crowds were flocking back, many fans who had stayed loyal throughout the grimy years had been priced out, and the average age of a Premier League football fan climbed over the decade to 44.
The other report was produced by the FA and the Premier and Football Leagues themselves. It said they were "impressed" by supporters' trust initiatives, agreed that clubs should implement codes of conduct, even suggested an "independent scrutiny panel" to report on how well the game was governed. But repeatedly, the football authorities' argued against introducing any rules.
Clubs must have "freedom to act", the report said, and in a phrase of heroic confection, the men running football argued their "primary response" should be: "To adopt the contemporary principles of customer care and a more inclusionary approach to key stakeholders." With that clarity and keenness of vision, the game's rulers took football into the 2000s.
The Premier League was on the threshold of its next TV deal, from 2001-04; the live rights went exclusively to Sky again, and the total for the 20 clubs came in at £1.6bn.
Roy Keane, Manchester United's captain, made his memorable remarks about home supporters, having "probably the prawn sandwiches" and being unable "even to spell football, let alone understand it", in December 2000. At the time, Keane himself was reported to have set the new benchmark for players' wages, holding out for £52,000 a week.
Yet even such galactic earnings were eclipsed by the takings of chairmen selling out their shares. Alan Sugar, who had described the leaking of money to players as "like drinking prune juice while eating figs", made £22m when he sold part of his Tottenham stake to the investment group Enic in December 2000.
Martin Edwards, whose father, Louis, accumulated his majority Manchester United stake in the 50s and 60s, would make £93m from selling shares, in chunks, on the stock market, before the Glazer family bought United and ladled their borrowed multimillions on to the club. David Moores, the Littlewoods heir who had invested around £12m for his stake in Liverpool, would be paid £89m from selling his shares to Tom Hicks and George Gillett, who also borrowed to buy the club and made it responsible to pay the debt.
As Sky's profits soared from expensive subscriptions to homes and pubs, Carlton and Granada's joint venture, ITV Digital, paid £315m for three years of Football League rights. In April 2002, after one year, the company collapsed. Carlton and Granada refused to stand behind their company's agreement, Championship clubs each lost £4m they had fairly budgeted to receive, and the league plunged into crisis.
No Premier League club has collapsed into insolvency since the 1992 breakaway, but their overspending has been exported through relegation. Leeds, top of the Premier League 10 years ago with David O'Leary's sprightly side, "lived the dream" after that on borrowed money but did not fall into their £35m administration until 2007, under Ken Bates's chairmanship, and the unidentified offshore owners backing him. In 2002, of the three clubs relegated from the Premier League, Derby County were placed into receivership, and Leicester and Ipswich collapsed into administration.
Football, in its boom time, saw 40 professional clubs fall insolvent, leaving millions of pounds unpaid in tax, to police, fire and ambulance services, to hundreds of small businesses and, in all cases, to St John Ambulance. Yet the leagues' rules require that "football creditors" – other clubs and the players' rocketing wages – must be paid in full. Leeds owed HM Revenue and Customs £7m, West Yorkshire ambulance service £8,997, St John Ambulance £165, and Bates's backers' first offer, accepted by the administrator, KPMG, was to pay those creditors 1p in the pound. The former players still owed money from Peter Ridsdale's dream time all had to be paid in full, including, for example, Danny Mills, owed £217,000 on a contract which had ended three years earlier.
The grimmest spectacle in a gallery of mismanagement came at Chesterfield, the fourth-oldest professional club in England, formed in 1866. In May 2000 the club had been "bought" by Darren Brown, 29, who had, it turned out, borrowed the money to do so, then emptied the club of cash to pay his lenders and himself.
Brown was investigated by the Serious Fraud Office and ultimately sentenced to four years in prison after pleading guilty to two charges of fraudulent trading. The club nearly went to the wall; it was saved by local businessmen in partnership with the Chesterfield Football Supporters Society, a supporters' trust newly formed as at clubs elsewhere to salvage the heritage from the wreckage.
An irony of football's jolt into finally recognising it did need some rules to protect its integrity in the cash cascade is that it was led by Lord Mawhinney, a former Thatcher minister. Mawhinney saw that the sport is not a free market, and that the Football League needed reforms to help it emerge from chaos. He was tough enough to insist solid changes were necessary, not waffle about "a more inclusionary approach to key stakeholders". The Football League introduced the game's first "fit and proper person test" in 2004, persuaded significantly by Darren Brown's pillage. Nobody convicted of a fraud offence could any longer be a director or 30% owner of a club, nor could anybody who had been involved with two club insolvencies. Observers noted that this would not have prevented Brown's takeover, because he had no convictions before he was handed the keys to Saltergate.
The Premier League followed, introducing the same test, five years after insisting in its task force report to the government that no new rules were needed. The league was flourishing, glittering, but facing a host of new challenges. Chelsea, in 2003, and now Manchester City, were bought by men from the world's rich list, willing to pump huge money in to increase players' wages and so skew competition. Other clubs were overspending to keep up, relying on burgeoning loans, from new owners or increasingly jittery banks. The Glazers' and Hicks and Gillett's "leveraged" buyouts were to saddle Manchester United and Liverpool with those enormous debts, which look to be biting at the decade's end. Contemplating their openness to all this, the Premier League introduced the rule designed to deter a small-time chancer in Chesterfield. And they wanted a pat on the back.
Mostly, the government acquiesced. The then sports minister, Richard Caborn, another Sheffield man, grew close to Richards, who was knighted for services to sport, largely for his work as chairman of the Football Foundation, which distributes the professional game's money to the grassroots.
Caborn, in tandem with Richards, seized on the 2004 sex saga involving Sven-Goran Eriksson, the England coach, the FA's chief executive, Mark Palios, and the secretary Faria Alam to demand a "structural review" of the governing body. That, carried out by the former Treasury mandarin Lord Burns, suggested modest changes, principally an independent chairman and two non-executive directors, which the Premier League itself does not have.
Lord Triesman, the former Labour Party general secretary and junior Foreign Office minister, was appointed as the new FA chairman, another interesting departure from the previous orthodoxy that businessmen must run everything. Triesman demonstrated that he wanted to lead reform, breaking with his predecessor Geoff Thompson's habitual public silence, and expressing reservations about the "Game 39" plan for global expansion of the Premier League's chief executive, Richard Scudamore. Last October Triesman also warned of the danger, in an economic crisis, of professional football carrying debts which he actually underestimated at £3bn. Triesman found common ground with Michel Platini, the president of Uefa, who was feeling his way towards tackling excessive debt and "sugar daddy" owners, and Triesman also suggested to the government there should be a review of the game's financial affairs.
The response to this for the FA chairman has, mostly, been relentless attack. Andy Burnham, who as a young task force administrator had helped secure government backing for the Football Foundation and the establishment of Supporters Direct to encourage supporters' trusts, returned as minister for culture, media and sport nine years later and called for football to "reassess its relationship with money". Burnham asked seven specific questions, calling for a unified response from the two leagues and FA, but they replied separately. The Premier League, which had furiously rejected Triesman's warnings, nevertheless agreed to take debts more seriously and to investigate the solidity of the money when a club is taken over. The Football League cited "competitive balance" – the financial gap between it and the Premier League – as football's "greatest challenge", but still there are no moves towards seriously addressing it.
Triesman proposed strengthening the FA's role in financial governance, but he was shot down by the Premier League representatives who sit on the FA's own board. These internal politics, long the greatest barrier to genuine reform of football, spilled over into the FA's bid to host the 2018 World Cup. Last month Sir Dave Richards resigned from the bid's board – prompting another deluge of negative, anti-Triesman coverage – in protest, reportedly, about the precise role Richards would be given and how far he was consulted on key appointments.
Over the decade, the former Sheffield Wednesday chairman has rubbed shoulders and made alliances with football leaders all over the world. He was paid £350,000 last year as the Premier League chairman. His former club ended the decade with £26m net debt, mired in a Championship relegation battle.
For the families of those who died at Hillsborough, the 20th anniversary in April saw a wholesale change in the way the disaster was viewed and reported. In place of false accusations made against the fans which had lingered for 20 years, there was universal sympathy for the families and a recognition that their treatment by the police and legal system had been a travesty. Prompted by Burnham and the junior justice minister Maria Eagle, the government promised that all documents held by the police and public agencies will be released.
For the families, the purpose is to pore over the whole, horrible truth about what happened and maybe, after that, be able to grieve properly, their fight completed.
After the disaster football moved on without much of a backward glance. Reform, the game's history tells us, takes years to catch up.
www.guardian.co.uk/sport/david-conn-inside-sport-blog/2009/dec/23/noughties-decade-review-football-money