House of commons

oral EVIDENCE

TAKEN BEFORE THE

Culture, Media and Sport Committee

Football Governance

Tuesday 8 March 2011

David Gill, Peter Coates, Tony Scholes and Niall Quinn

Lord Mawhinney and Henry McLeish

Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 8 March 2011

Members present:

Mr John Whittingdale (Chair)

Ms Louise Bagshawe

Dr Thérèse Coffey

Damian Collins

David Cairns

Paul Farrelly

Jim Sheridan

Mr Adrian Sanders

Mr Tom Watson

Examination of Witnesses

Witnesses: David Gill, Chief Executive, Manchester United, Peter Coates, Chairman, Stoke City, Tony Scholes, Director, Stoke City and Niall Quinn, Chairman, Sunderland, gave evidence.

I shall begin my blog with the oral examination of David Gill, the CEO of Manchester United Football Club.

David Gill Chief Executive Officer, MUFC.

David Cairns MP for Inverclyde.

David Cairns: Mr Gill, I have a general question. What do you think are the biggest challenges facing you as the Chief Executive of Manchester United?

David Gill: If you look at the level of the club, you will see that we have always had the team as our focus. Everything we have done has been about how successful the team has been. The challenge for us is making sure that we have the best team on the pitch. We have to make sure we have the best manager. Obviously, Alex Ferguson will retire in due course. The replacement for that is clearly a key business decision-

David Cairns: Feel free to tell us who it will be now if you like.

David Gill: Those are the key things, but obviously we want to make sure that we play a role in the development of football generally. We need to have competitive games against Stoke and Sunderland, for example. We need to ensure that it is a competitive game. We need to make sure that the English game develops and continues to be as successful as it has been so that we can benefit from that. We play within a game. We cannot go and buy five other clubs so that there are only 15 in the Premier League every year. It starts with 20 teams. We start in the third round of the FA Cup, the opening stages in Europe and so on. The biggest challenge is to ensure that the team remains successful, and our goal is to be the best team in the world, both on and off the pitch-things which are clearly interrelated.

David Cairns: As Chief Executive, on a day-to-day level, how large does the debt loom in your management of the club as a business?

David Gill: It doesn’t. The debt level that we have is £500 million in gross terms. There is roughly £130 million in cash in the bank at the moment, so there is a net debt of £370 million. We have gross interest costs per annum in the order of £45 million, and our cash profits are around about £100 million. So we have more than two times interest cover. The bonds that we have in place are covenant light-in other words, we do not have quarterly reporting in terms of covenants and so on-and we are very comfortable with that. We have seen great growth in the last five years in terms of our turnover. Also it is a profitable business if you get it right and that has generated cash profits. From my perspective, we know that the debt is there but it doesn’t impact on what we do. We look at trying to grow our revenues and invest in the business to make sure that we can continue to expand and be successful.

David Cairns: We are going to talk about debt financing in more general terms a bit later on. It does not impact on what you do, but surely servicing that debt, and interest payments and fees and all the rest of it, are money that is not being spent on players or improvements of the facilities or whatever?

David Gill: No; let us look at improvements to facilities. We have spent a lot on Old Trafford in the last few years. We have just had approved a £13 million improvement to our training ground, which has been open 10 years, upgrading it to reflect what has happened in football in the last decade. There has been no impact in terms of our transfers.

David Cairns: But you would rather you did not have this debt, presumably?

David Gill: Well, not having the debt is one thing, but the other point to note is what the owners have brought in terms of growth in certain aspects. For example, when they bought the club they saw lots of opportunities on the commercial side. Our commercial revenues in 2006, the first year after ownership, were £40 million. Last year, to June 2010, the amount was £80 million; this year it will be over £100 million. So they have grown that. We have invested in people. We had 460 employees then and we have 600 now. Yes, in answer to your question, simply the amount is £45 million. If that was not there it would be better in some respects, but at the same time it is not hampered us in developing the club. The net spend on players since the owner has taken over is greater than in the five or six years before that -  '[1]  Witness correction following the evidence session: Excluding the sale of Cristiano Ronaldo to Real Madrid CF for... £80m in 2009.

David Cairns: I am sure that that is true, but there can’t be any ambivalence about this. Obviously it would be much better if Man United was not carrying those levels of debt and servicing them, surely?

David Gill: In isolation, yes, but there is no issue in terms of asking whether Manchester United has been hampered in terms of what we have had to do as a club in respect of investing, as you quite rightly say, in facilities, players or player contracts. I personally believe that there has been no impact in that respect.

David Cairns: What kind of communication do the owners make with you in terms of setting out their strategy and so on? How do they communicate that to you? How do they set out their vision for the club on a year-to-year basis?

David Gill: We have both annual budgets and five-year plans, and we have constant dialogue in board meetings, in calls and so on. That speed of decision has been very positive, and I think that they have taken a view on longer-term investment which perhaps we would not have undertaken if we had been a quoted company. Who is to say? But that is the view, so I think they are intricately involved. As I said to you earlier, they clearly saw the commercial opportunities for Manchester United. They liked how the Premier League was run. They thought it was a very well-run league in comparison, say, with some aspects of the NFL. They felt that they could use the strength of the Premier League, but also the strength of Manchester United, to push the club forward. I think that they have demonstrated they can do that.

David Cairns: Would you prefer it if they were able to demonstrate that to fans? There is clearly a breakdown in communication somewhere. The fans say that the Glazers do not talk to them, and they are not getting the positive message that you are getting.

...and the answer is...

David Gill: The owners have delegated to me-to the team that we have, and to Alex Ferguson and so on-the task of doing that. That is a model that other owners have copied within the Premier League. I can give you other examples where owners have not spoken directly to the fans. The sheer size and nature of Manchester United perhaps means that we get more coverage on such matters, but as an executive team, on behalf of ourselves and the club, and so on, we have extensive communications with our fans. Yes, we do not communicate with certain fan groups, but they have an avowed aim to change the ownership. It would be slightly strange to enter into dialogue with those groups who have that intention or that objective. I am not sure where it is going to lead. We have to take all those elements of fan communication very seriously.

What a pitiful bloody excuse! "Yes we do not communicate with certain fan groups, but they have an avowed aim to change the ownership..."

Siena's own opinion is...'Nobody owns Real Estate [Grounds-Land], One is only the Caretaker, the Guardian...ALL MUFC fan groups should be included...Arrogant man this Gill character and as you will see, he begins to evade answering but alluding to other clubs...Gutless!

David Cairns: Why do you think so many of the fans just simply loathe the Glazers?

David Gill: You say "so many." They are well organised. They are very domestic. We have done studies which show that we have 333 million followers around the world. Our mailbags are large. We get thousands of e-mails; we had 36,000 phone calls last month. Not everyone hates the owners. The success that we have delivered on the pitch in the last five years is significant. There have been seven trophies since they have taken over. A lot of the fans want to ensure that there is money to spend on the team. They want to come to a safe modern stadium and see exciting, attractive football-and I think we have delivered on those counts.

But that has always been the case. Looking at Manchester United pre the Glazers, when we first went public in 1991, a lot of fans did not like the club at that time. We couldn’t understand why it was. The share price dropped. They didn’t buy the shares, then it went back up. They loathed the Edwards family. There are a lot of examples, not only around this table but across the Premier League, of fans who do not like the owners or management. That is one of the strengths of football. It creates opinion.

If ever I have read 'oral evidence' that is runnier than diarrhoea...I just have!

David Cairns: The situation of Man United in relation to the Glazers is no different to any other club?

David Gill:  I am not saying it is no different. The size of Manchester United and the coverage means that perhaps it is magnified, but without doubt, there are issues at other clubs. You just have to read the papers or watch the television to understand that.

David Cairns to Tony Scholes, Director Stoke City...

Tony Scholes

David Cairns: Mr Scholes, I have a similar question for you. What are the biggest challenges facing you in your job?

Tony Scholes: The No. 1 challenge, as Peter has just said, is putting a team out on the pitch that is good enough and competitive enough to stay in the Premier League-to stay in the best league in the world. Bearing in mind that we were out of the top league for 23 years, when we got promoted in 2008 we were some distance behind everyone else. By keeping the team in the Premier League we were able to build the club up, to build the support base and to pick up on those lost generations, if I can put it that way, derived from our being out of the top league for 23 years. Being in the Premier League gives us the opportunity to do that. The No. 1 objective is to stay in the Premier League, and doing that enables us to fulfil our objectives, which are to build a support base and the infrastructure of the club, and ultimately to build a sustainable Premier League club.

David Cairns: In day-to-day terms, what would you characterise as the main difference between being in charge of a football club in the Championship and being in charge of one in the Premier League?

Tony Scholes: I guess that running a football club is the same as running any company in many respects. You have to know what your objectives are, and you have to have good management to achieve those objectives. That is the same in the Championship and the Premier League. The differences, of course, come from the fact that we are playing in the biggest and best league in the world and the money that that brings with it. Obviously our income level went up substantially. That makes some things a lot easier, but it also brings some new challenges. Perhaps one of the key challenges is always managing the downside as well, so that if things do go wrong, we are strong enough to come back.

Ms Louise Bagshawe, MP for Corby to David Gill...

Louise Bagshawe, MP for Corby

 

Ms Bagshawe:  What do you think makes Premier League clubs so attractive to foreign investors? Could we start with you, Mr Gill?

 

David Gill: You are quite right; it is admired around the world. The way the league is structured is a factor, and it has clear objectives. The collective selling of the television rights has clearly been a success and it has made things more competitive.With regard to how the league is organised, there is light-touch regulation from the centre of the league but also an understanding what the commercial parameters are. The clubs get on very well. We all support the collective selling. We understand that strength behind that. Within that we have seen a sport that is growing. The sheer interest of this Committee shows that, and what is happening in football around the world, whether in the World Cup, the Euro or the Champions League. We are the most admired league in the world. We travel a lot with the club. Our following in Asia, and also in North America, is fantastic. If you ask all those people what their favourite league is, it is the Premier League, because the Premier League is one of the best leagues in terms of selling those rights on a collective nature in those markets. You can pick up all the teams, all the games and it is a very positive thing. So I think the time was right with the advent of satellite television. The league plays exciting football and it has attracted a good mix of foreign players-top, top players. All those factors coming together in a growing industry has meant it has become attractive.

 

Ms Bagshawe to Mr Peter Coates Stoke City chairman...

 

Peter Coates, Stoke City chairman

 

Ms Bagshawe: Mr Coates, you took a club back out of foreign ownership. What do you think made something like Stoke so attractive in the first place to foreign investors?

 

Peter Coates: What?

 

Ms Bagshawe: You took a club out of foreign ownership by buying it back.

 

Peter Coates: They wanted to go because they had lost their money and that happens a lot in football.

 

Ms Bagshawe: Whether they decided to sell it or they didn’t, but what do you think they-

 

Peter Coates: They were desperate to go.

 

Ms Bagshawe: What do you think attracted them to it in the first place?

 

Peter Coates: They thought they could make it work. They thought they could take Stoke into the Premier League. That was their objective. They thought they had a manager, an Icelandic manager, who could do it. They were confident. Iceland, if you remember, was doing rather well and growing and taking over the world and one of the first things they took over was Stoke City. They found it was much more difficult than they thought. Foreign owners come in and it is immensely difficult. It is the best league in the world and it is the most international league and that is why it attracts foreign owners, because of its international dimension. It attracted even small Iceland, which is a population less than Stoke. They thought they could make it work and do well. I remember it very well. They had a bit of money to spend; they thought they would have a bit of fun, enjoy it and make some money, because they thought they were going to get into the Premier League. Of course, they discovered how difficult it was. It is an immensely difficult industry to work in. You have immense pressure from the media, immense pressure from your supporters and it is a tough business.

 

Ms Bagshawe to Niall Quinn, Sunderland chairman...

 

Niall Quinn, Sunderland chairman

 

Ms Bagshawe: Mr Quinn, what do you think?

 

Niall Quinn: I suppose the example of Sunderland would be, again, one where the owner has bought into the potential. One of the first things I asked him to do was understand the emotion of our football club, and I think that is the area where foreign owners, through the lack of PR or whatever, sometimes have an issue where people do not understand where they sit in terms of their love and affection for the club. I would say one of the issues-it is not my issue but Manchester United’s-is the people do not really know how the Glazers feel deep down in their hearts about when a referee makes a bad decision. Do they go home really fed up after a game like we all do or are they taking the call from the golf course wondering how the team got on today? I think that is the thing that is out there.

I know that is not true, of course, and in our case it is especially not true. One of the great things about our owner, which is appreciated by our fans, is he has more than bought into the emotion of it. He has bought into it financially, but also in terms of his week being a bad week, no matter what he is doing, if the club has not done well. I think that is a measure of his involvement at the club.

The other good thing is he lets football people run the football side of it. There is trust in the air, and it is to get the fans in Sunderland to believe that, which makes our team-which is fans, work force, players, and of course our owner, and our board-know that we are all pulling in one way. That is a tough ask and nobody is more aware than me of how foreign ownership is mistrusted. In our case it is not; it is welcomed with open arms. In selling the club to Mr Short and selling the idea of the club, for somebody in that bracket as he was at the time it seemed a great story, a great adventure to go on. These people are winners. They like to see can they improve it. If I can marry that in with the fans’ approval, then we have a good formula.

CEO of Manchester United FC...

David Gill: I can assure this Committee that our owners have had a very bad week.

'A BAD WEEK' Ooooh!

Ms Bagshawe: In terms of restoring some of that trust with the public and foreign ownership and in terms of governance, do you as a panel think that the Premier League is making sufficient inquiries of foreign investors before they purchase a club? Do you think there is enough due diligence going on? Mr Quinn, we will start with you on that one.

Niall Quinn: It is interesting. I can think of one or two cases in the past where there was a media outcry on people who were involved with clubs. It involved fit and proper persons, as they were called, and the issues came into the public forum. Basically what I can say is that in the period over the last few years-post Portsmouth’s demise, post other things that have happened-that has really tightened up now. I think we are confident and we know that the Premier League have tightened that up and shifted that to a point. Without going too deeply into it, there is now an international company that covertly will find out everything they need to know about somebody coming into the game.

Ms Bagshawe: Associates, is it?

Niall Quinn: We can’t tell anybody who it is. That needs to be understood on the basis that if we were to turn around and stop somebody who can invest in other business in the country from investing in our business, could they sue us?

Tony Scholes: One of the things that is worth saying, I think, is that in football most things get into the media immediately. There is very little we do that does not get reported on the following day. This is an area that doesn’t. There have been a number of people who have wanted to take over football clubs but have been prevented from doing so because of the Premier League’s rules that never get into public exposure.

Ms Bagshawe: Are you prepared to name one of them?

Tony Scholes: To be honest with you, I don’t know them either. That is the Premier League’s job. We are aware that there are a number but that is their job to do that; to have a look at them and to vet people who want to take over clubs.

Tom Watson, Labour MP to David Gill...

 

Tom Watson Labour MP...He looks a lot of FUN!

Tom Watson: Were the Glazers vetted?

David Gill: Were they vetted? They went through the process. Not to the extent that both Niall and Tony have said. I think there are two things here: one is that the Premier League has learnt from certain situations. We learnt from the Portsmouth situation and we, as a group of clubs, all supported wholeheartedly the recommendations from the Executive to improve the rules in terms of financial information and so on going forward. As Niall and Tony have said, in terms of the vetting of owners, that has been improved. I think it is important for industry and for sport to learn from past issues and to look them.

I do not think that, regarding the attractiveness of English football versus other football and English business perhaps versus British business and other business, passport is an issue. You can have very bad British owners or very bad English owners. It is the ability of the people coming in, their aspirations for the club and the objectives of the club that matter. So I think we should shy away from saying it is a passport issue and saying that you can only be English in order to be a proper owner of a football club, because I don’t think that is true. It is much more about the right owners than about their passport.

Mr Watson: Am I right in saying that Manchester United, the actual company that is Manchester United, is now resident in Delaware in the United States?

David Gill: That is one for the owners. Manchester United Limited, is clearly a UK company. The football club is a UK subsidiary of that. As to the ultimate owners, that might be the case. Where is the ultimate owner of Chelsea Football Club or-

Mr Watson: I don’t know, where are they?

David Gill: It doesn’t matter, because my job as the Chief Executive of Manchester United is to run the club according to our own financial structures, to ensure we continue to compete at the highest level of the game. The ultimate ownership up there is something for the owners. But what I would say is they have confirmed-and the Premier League checks this-the ultimate owners of Manchester United, 100%, are the Glazer family.

The CEO of Manchester United (The UK company), I take it is dodging to be upfront with the committee members and if I can see it, so can they...and Richard Scudamore stated at a later hearing that David Gill is the BEST CEO of all the Premier League clubs - 'BEST AT EVASION TACTICS' thats the most APT description!

Mr Watson: My point is, though, that don’t you think there should be some national   embarrassment that a great English club like Manchester United is owned in Delaware?

Here comes the 'Verbal Diarrhoea'...

David Gill: Not at all. Manchester United Limited publishes its accounts every quarter of every year. I am not quite sure why they would be an embarrassment as long as the company is operating properly within a great competition. I think Manchester United should be a source of pride for England, in terms of what it does and has done within the Premier League, and in terms of its performance and importance to the economy. We understand football is very important to the economy of the United Kingdom, and to the social fabric, and we act responsibly within that. So I don’t think it is an embarrassment in any way, shape or form.

I know whats coming up next and I bet...it's a 'LAW FIRM'

Tom Watson: I am sorry to make this about Manchester United, but just on the point about the due diligence, the secret organisation that vets potential buyers-

Niall Quinn:  It is a law firm.

I know which Law Firm it is...I shall have to wait, I might get sued myself...I came across it in my research last year.

Tom Watson: Yes, law firm. Can I just ask, would you be confident that the Glazers would pass that new test today were they buying the club?

David Gill: Without a doubt.

Mr Watson: Without a doubt. Okay, thank you.

Labour MP Jim Sheridan to Niall Quinn...

Labour MP Jim Sheridan

Jim Sheridan: Just on this point, do you think it is fair to your supporters that there is some sort of secret organisation that vets-

Niall Quinn: It’s not a secret organisation. It is a law firm; sorry, I beg your pardon.

Too Late Caught Out!!

Jim Sheridan: We are getting closer; it is now a law firm.

Peter Coates: I think it is a specialist in that sector. It is something I wanted them to do because I felt if we were to improve the fit and proper person test, you want to make sure it is properly vetted and I thought a specialist company would be the best way to do it.

Jim Sheridan:  Did you not think it would be helpful to share that experience, that information, with your supporters?

Niall Quinn: Just on that point again-

Jim Sheridan: Aren’t they entitled to know what kind of person is owning the club?

Niall Quinn: Yes. Where there are certain people that this firm did not want involved, we couldn’t make that public, because those people could maybe have come along and tried to sue us.

Jim Sheridan: Are you aware of any other industry discipline that behaves like this?

Niall Quinn: In terms of trying to get to the best possible result for the fans?

BULLSHITE!

Jim Sheridan: People don’t know what kind of person owns the business?

Niall Quinn: I think they do. We obviously pass.

OWNED BY ALIENS ANONYMOUS

David Gill: The point here is that ultimately it becomes clear what this process is. There might be five people bidding for a club, and I think what the Premier League has done is institute quite proper procedures to look at various things regarding the appropriateness of that takeover, whether it relates to the actual person in terms of his past business dealings or past issues, or to their business plans, which will involve asking whether they have the finances and objectives to take the club forward. That will mean looking prospectively from a financial perspective. So out of that five-they vet five-three might pass the test, and for them it then becomes a bidding situation in terms of who gets the club. The other two might be failed and we as clubs and supporters don’t need to know who the Premier League has turned down. I think it is more appropriate for the organisation controlling the league to do that.

I would say without 'Fair of Contradiction' that in the case of the Takeover of Blackburn Rovers Football Club...Number One Objective: Financial objective...He does'nt even touch on the was recommendations at the last All Party Parliamentary Football Group's Inquiry into "Football Governance back in 2008'

"

we recommend that the Fit and Proper Persons Test is revised to

take into account the suitability of a new owner(s) or any director

. Agreed

criteria will be necessary to look at how suitability can be defined and that should be

agreed in coordination with the relevant stakeholders. We accept that this reform will

lead to decisions being taken with a degree of subjectivity, however we believe that

the benefits to this reform outweigh the degree of subjectivity that some will consider

as a drawback.

We urge the Department for Culture, Media & Sport to work with the authorities

to make sure that this proposal is viable under UK law. We believe that our football

clubs are national assets that must be protected to ensure their long-term success

and survival.

During the course of our Inquiry many of our witnesses

also raised concerns about who administers the Fit and

Proper Persons Test. Whilst we warmly welcomed its

introduction following a recommendation in our previous

report, we believe that now is the time for further reform

and its scope should be extended to disqualify anyone

who has been responsible for the insolvency of any

company, and not just football clubs.

We agree with football journalist, Charles Sale’s

statement, “

There should be a proper body to do it…

We need a proper body to investigate takeovers”

.

We believe it is necessary that an independent body

from the Premier League and Football League take

control of the Fit and Proper Persons Test to avoid any

possible conflict of interest.

The FA, the Premier League and the Football League

currently have their own Fit and Proper Persons Tests

for their respective member clubs – there are many good

points from each of these tests, but there does not appear

to be any good reason to continue having separate tests,

and we believe they should be unified at the earliest

opportunity.

We recommend adjudication of the Fit

and Proper Persons Test be put under the auspices

of the Football Regulatory Authority to create a

unified process, under an independent body.

Transparency and Accountability

Any business worth its salt will have a strong, robust CSR

programme which reflects their duties and responsibilities

to their stakeholders. This is something that is evident

throughout football, for example the Premier League

requires each club to produce a customer charter which

sets out its policy in relation to many aspects including

supporters and stakeholders. It also requires these to be

made available and they are easily accessible, generally

published on club websites. They also have to provide

the Premier League with an annual report on how their

stated policies have been implemented and to what

extent they have been achieved.

I shall include the PDF for the All Party Football Report 2008 on 'English Football Governance'

http://tinyurl.com/3tfxdvf

Tony Scholes: It is a very positive thing because the league in football has been criticised in the past for allowing people to take ownership of clubs which are very important institutions, allowing the wrong people to do so. So they have implemented what started as the fit and proper persons test and it has been strengthened as a result of learning from some incidents that happened in the past. They have got an independent firm in. Recognising they didn’t necessarily have skills to do that themselves, they got an independent firm in to vet those people. So the people who end up owning clubs are those people who have passed. The Premier League and everyone in football knows that they will be appropriate stewards and good custodians of the football club; so it is a very positive thing. I would not see it as a bad thing at all.

Complete and Utter Bullshite Mr. Scholes...Blackburn Rovers were taken over by....

                                                  ROTTEN EGGS!

Jim Sheridan: The point I am trying to make, perhaps rather badly, is that if you do not have that open transparency in sharing that information, you are then left with the conspiracy theories-the speculation about whether people owning clubs have an interest in laundering money, for example. That is the kind of speculation and conspiracy that opens up when you seem to be hiding or not sharing information that should be there.

Niall Quinn: I don’t think there is any hiding there. I think what we are saying to you is as a group this Premier League-

"hiding" and evasiveness...

Jim Sheridan: But you won’t even tell us who this organisation is, this law firm.

Watch My EYES...Every Blink is the ANSWER!

Niall Quinn: That could change. Maybe I sounded a bit too covert there. It is a law firm, a specialist law firm. It is up to the Premier League in a meeting to agree whether to make that public. I can’t make that public on their behalf. What I would say to you is the issue that you want is the issue we want, and we want to make sure that fans have a say about that. Do they need to be told about somebody who probably chanced their arm and came along and we saw coming early? I think it only creates a little bit of instability where people think that we even would speak to those kind of people. We have to do the thing right, Jim, to get the right kind of owner.

If you want the "right kind of owner", then speak up...

Jim Sheridan: Jim Sheridan: It just doesn’t sit well with me.

You and me both, Jim!

Niall Quinn: I am happy to bring that back to the Premier League and say, "Should we make it clear because people have a doubt about this?"

...so they have time to concoct a humbug excuse! whatever...

Jim Sheridan: In terms of the fans, it is a need-to-know basis.

Niall Quinn:  I am here to take that on board and I will bring it back and we will look at that on your behalf.

Peter Coates: But the UK does have open borders with business, and football is partially a business as well as a sport, and we have lots of foreign ownership of many of our companies around the UK. It is a fairly normal thing in that regard. They do not necessarily tell you who the people are who might have wanted to buy a company and who did not buy it for whatever reason. They only focus on the people who have taken it.

John Whittingdale MP for Maldon and chairman of the 'Football Governance' select committee Inquiry...

MP for Maldon and Chair of the select committee, John Whitttingdale

Chair: It has been suggested in the past that, given some of the people who have ended up owning football clubs, it is difficult to see what you have to do to fail the test. Are you saying to us there are people who have been told they are inappropriate to own a football club?

Niall Quinn: Yes.

Chair: Do we have any idea of how many?

Peter Coates: We don’t know the numbers but we do understand that there are people who wanted to buy and failed to buy because they did not pass the test. That is our information from the executive of the Premier League, but we have no numbers for you.

MANAGEMENT ABLUTIONS.

Chair: We will pursue it with the Premier League.

Torbay MP Adrian Sanders...

 

Mr Sanders: What role, if any, should supporters’ trusts play in the governance of your clubs?

Niall Quinn: When it comes to fans and their love for the club, I could just tell you about Sunderland and what we do with groups of supporters. We have a meeting every four weeks with our supporters’ liaison group. We have a meeting every six weeks with the branches. We have senior management attend those meetings. We take into account their fears and requests, and their desire for the club to do better-their side of the story. We bring it in and that reaches board level and we look at ways of comforting them that their club is being run properly. I think that is probably the issue. Just last night, for instance, I had a forum of 400 fans; I have another one tonight with 500 fans. Every so often we do this; we go out and we give them a state of union address. We hear their fears from the floor and not through the media, which is a much better way of getting to the problem. Look, there are problems out there. The Premier League is the most incredible thing. The world loves us, but in our own back garden everything isn’t so perfect and we are not here today saying it is. But what we have to be able to do is to listen to people and hear what they have to say, and feel that we can behave appropriately and give them the comfort that we run the clubs properly. In terms of fan representations and stuff like that, I am the fan. I am their person in there.

Mr Sanders:  I think there is a certain difference in north-east football being just that much more passionate and maybe even that much more local compared to Manchester United, whose fan base is perhaps not just located in the Manchester area. How does Manchester United communicate with its fans, given that its manager will not even communicate with the world at the moment?

David Gill: We communicate with our fans on an extensive basis. We have invested in our fan relations team heavily over the last few years to improve that area. As I said earlier, we had 36,000 phone calls last month. We have thousands of letters and e-mails, which we respond to appropriately. In terms of formal processes, we have a fans’ forum that I sit on with four other senior executives where we meet a representative group of fans to discuss issues.

Cough! Cough!

Mr Sanders: How often does this happen?

David Gill: We meet a minimum of three times a year, sometimes four. We have an extensive branch network, both in this country and overseas, and again there is regular dialogue between the branches and the team responsible for managing those relationships throughout. Then I went to a meeting just before our City game and answered questions in an open forum with other members of the team. So we communicate all the time. We understand it, but as Niall says, on our board we have Bobby Charlton. He is a big fan. We are all fans on the board. We understand it and we work with them, but I think we do communicate appropriately and sensibly with our fan groups.

Mr Sanders: But somewhere communication must have broken down for something like FC United to have been created. Have you tried to improve your communication with fans since the creation of FC United?

David Gill: There are two groups: FC United and MUST. As I said earlier, MUST’s objective is to change the ownership. So I think it would be rather strange, unless they change their objective, to open a dialogue with those fans. But there is nothing to stop a member of MUST or a member of IMUSA or a member of FC United sitting in the Fans’ Forum if they choose to apply. There are elections every year-half changes one year, half the next-to our fans forum. They can apply if they are a season ticket holder or a junior member and so on. They can apply to go on and appear through that. We are happy for them to be on those forums. Clearly, at the same time, we are not going to engage in structured dialogue with organisations like that. I do not think it is appropriate or sensible.

Mr Sanders: I am just bemused because Niall Quinn has perhaps given a model on how you would communicate with supporters-individual meetings involving lots of people on a regular basis. No disrespect to Sunderland but they have not won the league or the cup or been European champions, and here you are, a premier Premier League team, and yet you have all these supporters’ groups you will not even talk to because they are at war with you. What is going on?

COW PADDOCK FULL OF....IS THAT MR GILL? BETTER GET MY GLASSES...

David Gill: They are at war with us? They are at war with the owners. There is a group there, we understand that. But I am not going to sit here and say that we are going to suddenly open the dialogue. We understand the importance, like any business and any sport, of the fans and we do have those regular dialogues with them. We have many, many communications, as I have outlined. We take those on board when we are making decisions, whether on ticket pricing, concourse catering or the shape of the programme. Digital media is a great feature that we’re using, the internet. Particularly we have a number of sponsors overseas and we are developing products for them; for example, in Saudi Arabia for our fans there through Manchester United content. So we understand the importance of communication and we don’t take it lightly. We discuss at our management meetings, at board level, what we are doing with that. If we are going to be castigated for not speaking with one or two groups who have particular very clear agendas then so be it, we will take the castigation. We are very comfortable with our method of communication and we would be naive and stupid if we did not understand what the fans think and what they want, and reflect that in our business policies. We are comfortable that we do that.

Its the fans' and supporters' at home, whose BACKSIDES fill 'Old Trafford' Not the Likes of ME! from overseas who PAY TO PEER THROUGH THE WINDOW OF SKYSPORTS TO SHARE WITH THE PEOPLE OF MANCHESTER UNITED FC...'DIPSTICK! ...EMPTY STADIUM...LEAVES A LOUD ECHO OF EMPTINESS!

...I am the ONE BOOTING YOU UP THE A....MR GILL!

Mr Sanders: But don’t you see a pattern here that when you disagree with somebody you stop talking to them?

David Gill: No. Okay, I will ask you a question. Their intention is to change the owners. Do you think it is sensible to sit down and change the owners? This body came out of Shareholders United Against Murdoch, which was formed in 1998 when Sky tried to take us over. They have evolved since that. They want to have a situation where they have other owners, or they can own the club or whatever. So unless they change their situation I do not see a reason to sit down and talk to them.

This Gill character is treading on political toes with his smart-arsed answers...Government intervention, i.e. Regulation of football will most certainly occur...'Dipstick!

Ms Bagshawe: Let us just go back for one second to the last question on the issue of foreign ownership. Fully half the clubs in the Premier League are now foreign-owned and there is quite a lot of concern out there that that was going to affect the decision-making capabilities of the Premier League, particularly in ways that relate to support for the national team and for training young players up to be England players in the national team. Do you have any concerns at all that vast swathes of the Premier League being under foreign ownership may have a knock-on effect on our national team and our national game?

Peter Coates: I think that improvements have been made on that. There has been an argument, and it may be a good argument, that perhaps the balance had gone too far; there were perhaps too many foreign players. But the introduction of the new 25-man squad has changed things. Every club does want to produce indigenous players, obviously. There is nothing like your own players. We would love to have at Stoke-and I am sure Sunderland and Manchester are the same-boys who come up through the system and are local to the area. That is a very important thing. We pour millions of pounds into development. One of the arguments against the Premier League is that they perhaps don’t get enough opportunity, but with the difference in squad size, I think that is a positive thing and has improved the opportunity for young players to come through.

Ms Bagshawe:  Of course you are a British owner that took the club back out of foreign ownership, and I suppose the concern that fans have is that foreign owners are looking at the club as a successful investment, something where they want to make a bit of money. They have no skin in the game whatsoever if the England team does well or does poorly, and that is a concern for some fans. Mr Gill, how do you address that?

David Gill: No, I disagree with that. As I said earlier, the whole strength of football works in a pyramid system and I think if the national team does well there is certainly a knock-on impact to the Premier League, and to the attractiveness of it. We have seen what is happening in Spain at the moment with their team doing very, very well and I think that trickles down. So I don’t agree with that. As Peter said, we are very interested in developing our own talent. We put millions in and there is a big review going on now in terms of youth development, which is a tripartite process, involving the FA, the Premier League and the Football League to see what has happened. The academies have been in existence now for 13 or 14 years. We are now looking to see what changes and improvements need to be made. We are putting a lot of money in and perhaps the players are not coming out, so how do we improve that? Around the Premier League table, there is great support for the national team in making sure England does well. There are issues to be worked on, for example the match calendar, but it has never entered any discussion I have either had with the owners or around the Premier League table that there is lack of support for the English team, because I personally think it does benefit the game.

I have heard of....PYRAMID...SC....CROOKED!

Ms Bagshawe: What about you, Mr Quinn?

Niall Quinn: I suppose one of the proudest moments we had both as Sunderland fans, as the owner, as myself and the board and our manager, was when Jordan Henderson, who was at our academy since he was eight years of age, made his England international debut this year. I think to us that justified everything we have tried to do in the last few years about bringing our home players through. It is funny how things go. When I came back to the club five years ago even local kids in Sunderland didn’t want to come to Sunderland. We were losing them to Middlesbrough and Newcastle because our academy was not working. With the owner’s help we have been able to put more funds into that academy and, as I say, Jordan is the picture postcard this year. But the great thing is that on Saturday we were at the Emirates in a game that went all around the world-a fantastic game against Arsenal-and four of the players stripped out of our players and subs had come through our academy. We think that should augur well for English football in the future.

Dr Therese Coffey MP for Suffolk Coastal...

Dr Coffey: Debt has come up several times in this conversation and although my colleague Mr Collins is coming on the aspect of financial fair play-and it is interesting to hear your comments, Mr Coates-I wanted to ask Mr Gill, in terms of the financing choice for Manchester United, how much was driven by tax aspects, such as interest relief offset against tax and similar? How is it used potentially as a loss making vehicle to offset other tax? Is that the main driver for the reason why you financed that way?

David Gill: That is an owner issue really. It is true to say that interest expense for any UK corporate is a tax deductible item and they have used that. But I think if you step forward, we still pay significant amounts of tax. Our tax payments to the Exchequer last year totalled about £75 million; over the last five years it has been £370 million.

Dr Coffey: Is that corporation tax?

David Gill: No, it is various elements. There is VAT; PAYE is a big one, clearly; national insurance and corporation tax. So, yes, our corporation tax charge has clearly gone down as a result of that interest expense, but as to whether it makes sense to use that in terms of the overall planning of their finances, it is for them to answer.

Dr Coffey: I recognise that, but if you go across the other side of Manchester, Sheikh Mansour came in and made an equity investment. Do you think we should be changing the financing laws to encourage that rather than allow debt finance to leverage?

David Gill: I think if you are going to change it-and it goes back to Peter’s point, sport is a business but it is also a sport-you are going to have to change it for all UK corporates. I think companies should operate within UK corporate law, company tax and so on. If the Government do not want to operate that way, fine; but I do not think it will change for football’s purposes.

Excuse me, I would like to interject here...David!

Many supporters are suspicious of foreign ownership, especially the Manchester United fans and supporters[They are outraged], that their beloved 'Old Trafford' was purchased when it had practically a 'CLEAN SHEET' and now has been saddled with huge debts...These buggars bought it as an LBO [Leveraged Buyout]...and they did'nt put any of their own money in!
With the financial concerns, world-wide especially in the Banking Industry, the growth in the Premier League [that has been savoured in recent years],  cannot be sustained and the PROOF is right in your backyard...Mr Gill! He speaks through that hole of his called a 'COPPER MINE'






Dr Coffey:  I do not want to steal Mr Collins’ question so I will try not to, but with the forthcoming regulation is there not a case for you already making changes to how you operate financially in order to cope with what is coming?

David Gill: No, we are very comfortable with financial fair play, if you are talking about that, and how it operates and we understand the impact. Our interest expense is an operational cost to the business and it will be, quite rightly, included under financial fair play. It should not be excluded. We are very comfortable with that and we will operate within it.

BEWARE...Mr Gill...UEFA if they so wish can SANCTION the club-Which means 'The Club' will not be able to participate in the UEFA CHAMPIONS LEAGUE COMPETITION...Its about "rationality" and licensing matters...I wonder if the FA and/or The Premier League have a ROBUST LICENSING SYSTEM?...I DOUBT IT VERY MUCH.

Peter Coates:  I think there is nothing wrong with debt so long as it is sustainable debt and affordable debt. I think that that is the critical matter. Quite clearly, Manchester United can afford their debt. Debt is wrong when you cannot afford it and you are irresponsible. As for the tax aspect, there is an argument which I know is doing the rounds, and it is for UK legislators to decide whether interest should be allowed or not. But that is a matter for parliamentarians, not for football clubs.

Wake up and smell the ROSES, Mr Coates, obviously United's debt was unsustainable and unmanageable why they turned to BONDS! I wonder when real people with real skills are going to give evidence?...I shall conclude this hearing a little later...Tummy's Rumbling.

Bye for now...