Monday, 16 May 2011

Goals On Film - Lord Sugar Tackles Football

Please note: This post was originally published on 12th May but was then lost when Blogger crashed.  This is a recovered version which includes some minor alterations but no substantive changes and so it does not mention West Ham’s relegation.

On Saturday (May 7th) I spent the evening watching the excellent Uncaged Monkeys which featured, among others, sexy particle physicist Professor Brian Cox and scourge of bad medical journalism Ben Goldacre.

Among the few bits I could actually understand Cox made an interesting suggestion that all opinion is worthless and there's only true value in conclusions based on the rigorous critical analysis of facts.

Fast forward 24 hours and I was watching Lord Sugar tackling football for the BBC. Unsurprisingly there wasn't a huge amount of critical analysis on display. It didn't matter though, because he had an opinion and he wasn't scared to tell us exactly what it was.

Lord Sugar, himself, is not to blame for this; it's simply an indictment of the state of modern journalism which packages complex issues into easy-to-digest but over-simplistic stories. For example, in the first minute Lord Sugar asks “why has it taken so long for alarm bells to ring” setting himself up as a path finder but totally ignoring the excellent journalism on this very subject which has been ringing alarm bells for a decade and more.  One such writer, David Conn, appears in the show (along with Dan Jones from financial analysts Deloitte) but their contribution – especially Conn’s – is so small as to be effectively pointless.

When you couple this with our fame-hungry society you end up with the new phenomenon of the celebrity-fronted documentary which surely hit rock bottom when BBC3 sent Lindsay Lohan (yes, the star of Herbie Fully Loaded) to 'investigate' child trafficking in India.

Back to Lord Sugar, who was telling us that what football needed was "a dose of hard business reality". Yeah! You tell 'em, Lord Sugar. (Ooh, and by the way, do you know anywhere else I could get "a dose of hard business reality"? I'm thinking perhaps a reality TV show, y'know based on business. What? The Apprentice was back on telly? Whodathunkit!?!)

The, no doubt coincidental, timing of the two shows apart, Lord Sugar told us he was “going to be talking to people in all facets of the industry including managers, agents, owners of football clubs" but interestingly not fans. It was alright though because he quickly outlined his own past as a fan (Lord Sugar watched Tottenham as a boy before saving the club from bankruptcy in 1991 when he bought it for £8m to “do something for the community”).

Allowing Lord Sugar to set himself up as the supporters' representative was documentary's first problem. There have long been questions as to exactly why he bought Tottenham and how strong his affinity to the club really was. Even the BBC website's own profile of their Apprentice star says he had "little knowledge of the club's history" and claims he once asked "Double, what double" about Spurs’ historic 1961 team.

However, there was no time to question that in this programme and so, with his man-of-the-people credentials established, Lord Sugar jumped into his chauffer-driven Rolls Royce and headed off to investigate.

He wasn't in the car long though as his first port of call was West Ham United where he interviewed co-Chairman David Sullivan and Vice Chairman Karren Brady. Sullivan co-owns the club with David Gold and we were told the pair are "local boys made good" before the club's current debt problems were laid squarely at the feet of previous owner Icelandic billionaire Eggert Magnússon.

Again this raises significant questions which aren't covered. There was no attempt to balance the claim with an interview with Magnússon, nor any attempt to explain why he was being blamed for this debt when we'd just been told that 14 of 20 Premier League clubs are in the red with an average annual loss of £27m.

In short; why was Magnússon being painted as incompetent when it had already been established that debt is a structural problem within the game?  Furthermore there was no attempt to analyse the devastating effect that the global credit crunch had on Iceland's economy and the ripple effect that in turn had for Magnússon and the Hammers.

Nor was any mention made of the fact Karren Brady appears alongside Lord Sugar on The Apprentice (and so, like Lord Sugar, is in effect a BBC employee) nor - more astonishingly - that Gold and Sullivan were co-owners of Birmingham City until 2007. This last omission was just one damning indictment of the journalism on display in the programme given its subject was the business side of football.

Now to be fair, Gold, Sullivan and Brady appear to have run Birmingham very well, having been very thrifty with both salaries and transfers thus keeping the club more-or-less debt free. So, why not mention this? It seems to more than justify their being interviewed.

Yet, on the other hand Gold and Sullivan encountered a few legal difficulties towards the end of their time in charge at St Andrews before the sale to Carson Yeung ended in acrimony. A tribunal found against the club in 2007 over reclaiming VAT on agents fees, and Brady and Sullivan were arrested in 2008 on suspicion of false accounting and fraud although ultimately no charges were brought.

Furthermore, Brady received a pay-off of just under £1m when she left the club and Yeung was moved to take legal action to block the payout as part of a £7m writ in which he claimed to have unearthed a catalogue of financial mismanagement.

Gold threatened to counter-sue for libel, but the issue was eventually settled out of court, and the club's 2010 accounts noted a repayment of more than £2m from Sullivan, Gold and Gold's brother Ralph "relating to management charges incorrectly invoiced to the club in previous years".

There is clearly no suggestion of wrong doing, however what this demonstrates more than anything is that the issue of football finance is hugely complex and not something which can or should be dealt with in a simplistic hour-long TV show.

However, with none of these issues mentioned, Lord Sugar bade farewell to his chums and we moved on to look, briefly, at Portsmouth's fall into administration.  “Like West Ham,” Voiceover Man tells us “Portsmouth had fallen under foreign ownership and their debts had become too much to bare.”

So, another question goes unasked and unanswered: Is foreign ownership a cause? If not, why mention it?  I don’t think Peter Ridsdale is foreign and yet it was under his chairmanship that the Leeds United’s dream turned into a nightmare.

This section briefly goes into the issue of the football creditors rule, whereby should a club go into administration they are duty bound to pay their football creditors (such as other clubs, players and ex-players) first and in full. Their other creditors are then paid, however this is likely to be only a fraction of what they are owed. It's a worthy subject, which in many ways deserves a programme of its own. It's also, well, a little bit dull which is probably why Lord Sugar took a rest and let Voiceover Man deal with this bit.

Back in London Lord Sugar then relayed the story of how he had a defining role in football's “revolution” as he was one of the chairmen who voted for TV rights to be sold to Sky back in 1992. He freely tells us that his company Amstrad made the set-top boxes for Sky, however he is clearly still aghast that others saw this as a potential conflict of interest and apparently still finds it 'ridiculous' that his presence in the meeting should be the subject to a vote. Ultimately he was allowed to stay in the meeting.

Chris Horrie in his book Premiership and Tom Bower in Broken Dreams both claim that Rupert Murdoch encouraged Lord Sugar to back Terry Venables' attempt to buy Spurs so as to ward off a rival bid from Robert Maxwell. According to Horrie and Bower, Murdoch was worried that if Maxwell became owner he would support ITV's bid for the Premier League rights, which could have meant financial ruin for Murdoch's company (and would have made Sky's £125 take over of Amstrad in 2007 extremely unlikely).

Sugar has always denied this but as the winning bid needed at least 14 chairmen to support it, what is clear is that Lord Sugar in effect had the casting vote as the chairmen voted 14-6 (with two abstentions) in favour of Sky.

Of course, in Lord Sugar's retelling he is simply a man who ensured a revolution in football and this might be true but again there is no proper analysis of whether the deal was right for the game nor particularly its fans who would for evermore have to pay to watch something which had previously been free and this is odd given the seeds for many of the problems that beset the game today were sown in that meeting,

...and Bernstein
Next up in the boardroom, I mean to be interviewed, was Wigan owner Dave Whelan, or as Lord Sugar called him: "an old fashioned owner" (the definition of which seemed to be someone who will bankroll the club from their own pocket, which must make Roman Abramovich and "old fashioned owner" too).

Whelan we are told bought the club when they were in the Forth Division (League Two for you post-decimal kiddies) and took them all the way to the Premier League. It's a remarkable journey, but here's the interesting bit: Whelan says the club is now £70m in debt.  Does Lord Sugar take him to task over this? Does he hell. Instead the blame is placed squarely on the players and their crippling wage demands, which creates and internal contradiction within Lord Sugar’s argument.

On the one hand West Ham and Portsmouth's debts are blamed on their former (foreign) owners but on the other hand, Wigan's debts are not blamed on their (English) owner. It's a simple, convenient narrative but it's totally inconsistent and so, of course, it's ignored.

Lord Sugar then decided he needed to speak to the people the clubs are paying: The players. Did he talk to a range of players from different clubs or levels within the game? No. Did he talk to a current player? No. Did he talk to a representative of current players, say the chief executive of the PFA Gordon Taylor? No.

Instead, he spoke to ex-player Alan Shearer (again without leaving London) and again without mentioning Shearer is a pundit on Match of the Day and thus, like Sugar and Brady, effectively a BBC employee. It's all a little depressingly predictable, isn't it?

This section was confusingly edited. One moment the pair are talking about transfer fees and the next about player salaries when the two things are separate; players of course have no control over the size of the fees paid for them.

Now, I'm no Shearer fan, not least because he fell over when Neil Lennon head-butted his foot, but his defence of players is reasonable - if clubs are willing to pay them for their talent then why shouldn't they take the money on offer?  (In a sense it's no different than the payout Birmingham were contracted to award Brady when she left the club.)

Sugar has no answer to Shearer but says he “didn't expect any better” which is odd as what the ex-Toon star’s argument is essentially a free-market Thatcherite thesis – which helped Lord Sugar himself become so successful in the Eighties.

Lord Sugar then decided he needed to speak to a manager. No doubt to minimise his carbon footprint he visited another London club to speak to Spurs boss Harry Redknapp. It's in this part of the programme that we come across the most astonishing omission.  No mention is made of the fact that Redknapp was manager of Portsmouth in the period of spiralling wages and high transfer fees criticised just minutes earlier. Redknapp may not have been at fault but to not mention it - even in passing - is sloppy journalism of highest order.

There was also no mention of the fact that Redknapp is awaiting trial on two charges of tax evasion after allegedly receiving payments totalling £185,000 into a Swiss bank account from former Pompey chairman Milan Mandaric.  The pair are, of course, innocent until proven guilty, but to not mention it in a programme purporting to be about the business and finance of football is again woefully poor journalism.

There is also no mention of Redknapp's time as manager of either Bournemouth or West Ham which both drew criticism for over-spending. At Bournemouth the club's debt increased from £150,000 to £2.6m between 1987 and 1992 and the club's subsequent financial adviser Roy Pack was moved to say of Redknapp in the News of the World (as quoted by Bower) "there was a degree of irresponsibility in what he did. It has developed into the mess we are now trying to resolve. What has happened is almost unbelievable and in a business sense it is ludicrous.”

Instead Redknapp is able to reminisce about how things were different when he was first team player for West Ham - he had a summer job stacking shelves - and claim that he has no idea what his players are earning. Thus, when asked how much responsibility a manager should take, Redknapp is allowed to assert - unchallenged - that "we know nothing about finances, we are football people."

Sugar then talks to agent Jerome Anderson - again seemingly without leaving London as Anderson appears to come to Sugar's office. It's an odd interview as Sugar clearly wants to give the impression he's giving Anderson a tough grilling. But his hardest line of questioning is "Come off it, come off it. What went on there with the Rooney thing?"

It's hardly Paxmanesque and it's ludicrous - Anderson doesn't represent Rooney, so how can he be expected to give an insightful answer? If Lord Sugar really wanted to probe Anderson, then why not quiz him about his dealings with Manchester City during Thaksin Shinawatra's ownership, when Anderson pocketed around £7m in agents fees? Again, there’s no suggestion of wrong doing, but if he’s worried about club debts, isn’t the issue of agent’s fees something he should look at?

However, that wouldn't support Lord Sugar's opinion - you know, that players are to blame so, refusing to give up on this idea, he pushes Anderson to agree that players don't have passion for the football, just for money.  Anderson has none of it, instead arguing 'celebrity' footballers have been created as part of the process of enhancing the Premier League brand. It's a very good point but, obviously, it's ignored.

The documentary then briefly focuses on the leveraged buyouts of both Manchester United and Liverpool (where the debt incurred in buying the club was placed on to the club) and also talks briefly to head of UEFA Michel Platini about new ‘financial fair play’ regulations he is introducing which will require clubs to balance their books over the course of three years.

Again two separate issues are confusingly brought together.  The ‘fair play’ rules won’t stop leveraged buyouts or clubs borrowing money for capital projects (as long as they can balance their books, they’ll be OK).  What they do aim to stop is mega-rich owners underwriting huge spending (as Arsène Wenger calls it ‘financial doping’).  Here surely there should have been a discussion of the business models of Chelsea and Manchester City, yet the clubs were only fleetingly alluded to.

That none was forthcoming is ironic as leveraged buyouts, by imposing huge (and in Liverpool’s case ultimately unsustainable) interest payments limit spending and essentially have a deflationary effect on transfer and salary spending – Lord Sugar’s bugbear - whereas owners who bankroll clubs (like Abramovich, Sheik Mansour and, er, Dave Whelan) are the ones having an inflationary effect. Perhaps also at this point some analysis of the effect the Bosman ruling has had on player wages and how this could be dealt with would have been useful, but again it was absent.

My new hero

So, finally, with his investigation complete, came the moment viewers had no doubt been waiting for - Lord Sugar’s five-point Game Plan for Football.

1) Controlling Players Wages
He wants a salary cap.. However, a few problems are raised - the man from Deloitte says it would have to be pan-European (and arguably it would have to be global) and Scudamore, not unreasonably, asks in what form it should be implemented. Sugar, just looks annoyed that someone has dared to disagree with him and perturbed that his idea is, unlike the average Apprentice contestant, not as simple as he at first thought. There is no discussion or explanation. Lord Sugar has spoken and so we move on to ...

2) Borrowing to Build Not To Buy
Lord Sugar wants an end to leveraged buyouts and wants clubs to only be allowed to borrow for capital projects. Nice idea, but hardly new. Furthermore, leveraged buyouts - whatever you think of them - are common business practice. Could they realistically be removed from football?  And what about billionaires bank-rolling clubs, why is that issue not dealt with?

Strangely the regulatory nature of points (1) and (2) are somewhat at odds with the aggressive Thatcherite business philosophy Lord Sugar expounded and implemented in the 1980s but it's OK, he's back on form with...

3) Tougher Penalties for Financial Failure
In essence, Sugar believes clubs should be allowed to go to the wall. He repeats again they need a dose of hard business reality (just in case you'd forgotten he has a business reality show starting two days later). Scudamore, not unreasonably argues: "Fans don't want these clubs to die. My prime responsibility is to keep clubs alive because they are bigger than the current owners. For the fanbase, community there is a whole thing bigger than a single business entity."

Now, when Scudamore's the one making sense, you should realise you’re in trouble but Lord Sugar retorts in dismissive Apprentice mode: "Nah, nah, nah, nah. The fan base of this country needs to see a couple of disasters" and there we have it. In Lord Sugar's worldview it's the fans that need to wake up to reality - they're the real culprits who need to be punished.  Yet, again, there is no explanation; why are supporters suddenly in the spot light?  Why didn’t Lord Sugar just let Spurs go to the wall in 1991? Oh, that’s right he wanted to ‘do something for the community’.  That’ll be the fans, no?

4) End the football creditors rule.
I'll give him this one although it's neither new nor groundbreaking.

5) A Football Trust Fund
Sugar wants half the TV money to go into a trust fund for, as he says, "I don't know.... new stadiums, new facilities. All the good stuff."  As you can see Sugar's used the full extent of his business acumen to the give the idea, oooh I don't know... about two seconds’ thought.

Again, there is no detail how this would work, Think about it: who would decide who got the money? Who would take ownership of a stadium financed through such a fund; the Premier League, the community or the club's owners? If the latter, would they be able to then profit from selling the club once the shiny new stadium was built?

This final point of Lord Sugar’s game plan is a depressing microcosm for the rest of the programme - at the shallowest of shallow levels it sounds good and it’s spouted with aggressive confidence, but in reality it’s just an empty and ultimately worthless opinion.

Last Goals on Film: The Damned United

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Ben said...

Excellent article, I agree with it wholeheartedly.

The programme was a convenient ego trip, superficial in the extreme.

Gareth said...

I have to say, I enjoy your blog more than most nowadays.