Following England’s dismal exit from the World Cup, the Football Association (FA) has reacted with its customary alacrity and promised that Fabio Capello’s position as manager will be subject to a two weeks “review”. Although it makes sense to have a period of reflection to prevent a knee-jerk reaction to England’s desperately poor performances, this lack of decisive action is symptomatic of the FA’s inability to lead the national game. Any confidence we might have felt that the various committee men, suits and consultants that comprise the FA could reach a sensible decision surely faded away when we discovered that the assessment will be lead by Sir Dave Richards, jack of all trades and most certainly master of none.
The latest chapter in England’s never-ending story of failing to live up to expectations at major tournaments should not deflect football fans from a rather more fundamental question for the Football Association: in this media age dominated by the Premier League what exactly is it for? According to the FA itself, there are three core elements in its role: to lead the game in England with confidence; to build successful England national teams; and to protect football’s status as the nation’s favourite game. Leaving aside the last aim, which does not seem overly taxing, given that the alternatives of rugby, cricket and tennis are hardly going to set the spectators’ imagination alight, it could be interesting to see how the FA has performed against its own objectives.
However, David Davies, the former FA executive director, admits that the organisation’s focus is not completely clear, “You cannot tell me what the agreed priorities of English football are – nor can I. The problem is there are none. Everybody does their own thing.” In the absence of any decent guidance from the Football Association itself, I thought we could draw up our own list of areas where the FA plays a part and produce a sort of report card. As is the nature of these exercises, I have identified a top ten to examine:
1. National Team
Disappointing as the displays of England’s finest were in South Africa, it’s nothing new under the sun for the national team. In fact, since England won the World Cup way back in 1966, they’ve not even reached a major final. Compare that record to our closest rivals: in the same period, Germany have won five trophies (the World Cup twice and the Euros three times), while the song remains the same for other countries: Italy three trophies (two World Cups, one Euros), France three (one World Cup, two Euros) and Spain, frequently labeled as “chokers” by the British media, two (one World Cup, one Euros). Hell, even countries like Netherlands, Denmark, Greece and the Czech Republic have won the Euros since Alf Ramsey’s boys did the business. Not to forget the major South American nations, who have won five World Cups between them in that time: Brazil three, Argentina two. Given that barrage of statistics, it’s difficult to argue that England is a footballing powerhouse – very far from it.
The ease with which Fabio Capello’s team qualified for the World Cup may have proved all too illusory, but the fact remains that the national team is not very good – and rarely has been. This is a problem for the Football Association, as they candidly admit in their annual report that “a successful England team is fundamental to the well-being of the game at all levels.” Oh dear. More specifically, the national team is the engine that powers the FA’s finances, enabling higher broadcast and commercial deals and filling the white elephant known as Wembley. This is why the FA pushed the boat out in South Africa, spending huge sums on the management team, a purpose-built training complex and even some natty three-piece suits for the players. Seriously, this was an expensive gamble, designed to give the England team every chance of bringing home the World Cup, which would have sent their commercial value through the roof. Unfortunately, it’s clearly not paid off.
"Unclear future for the FA"
2. FA Cup
The Football Association’s flagship trophy is obviously the FA Cup, but this has lost its lustre over the years. No matter how many times ITV scream about the “romance of the Cup”, most fans seem to have tired of this relationship. Certainly, most of the Premier League clubs pay lip service to this competition, invariably not fielding their best eleven players. Even though the prize fund and broadcast payments increased in 2008/09 to £28 million, the winning team only received £3.8 million. That might be a reasonable sum for a Championship team, but it’s chicken feed for a club like Manchester United, which in the same season earned £51.5 million from the Premier League and £32.6 million from the Champions League.
This lack of interest and uncertainty over the televising prompted E.ON, the competition’s main sponsor for the last four years, to announce in 2009 that it would not be renewing its deal after this year’s final, though it recently changed its mind and decided to extend its sponsorship for one year for £10 million.
3. Generate Revenue
Exactly like their big brothers at FIFA, most of the revenue comes from selling their rights to broadcasting partners and commercial sponsors, in the FA’s case mainly for England’s matches and the FA Cup.
"Watmore do you want?"
(a) TV Rights
The last deal, covering the four seasons from 2008 to 2012, was a record for the Football Association, securing £425 million from ITV (£275 million) and Setanta (£150 million) for domestic rights (up 40%) and £145 million for overseas rights (up 270%). Given the paucity of the product on offer, this might have seemed too good to be true – and it was. Setanta went bust last year and its collapse has left a significant hole in the FA’s accounts. Although a replacement deal was signed with ESPN, this was only for £60 million. As “here today, gone tomorrow” former chief executive Ian Watmore said, “Losing the Setanta deal was a big blow for us. It was a deal at the peak of the market.”
And that’s the key point. It’s extremely unlikely that the FA will get the same amount of money for the next TV deal. ITV have effectively admitted that they over-paid last time by writing-down the value of the rights in their accounts, while they have already asked the FA to delay the phasing of their payments, as their own advertising revenue slumps. The BBC is under pressure to reduce its expenditure and has allocated much of its sports budget to Formula One, while politics mean that Sky may not be allowed to bid. It is possible that ESPN might see this as an opportunity to broaden their access to the UK market, but they might prefer to focus on the Premier League’s golden goose. On the other hand, live football is still very popular on television with England’s lamentable displays at the World Cup still pulling in massive viewing figures, so the FA may yet pull the proverbial rabbit out of the hat.
The FA’s decision to delay signing a main sponsorship deal until after the World Cup always looked to be very risky and England’s early elimination will definitely weaken their bargaining position. They turned down a £20 million offer from loyal partners Nationwide for four more years and it is unclear whether that is still on the table. They had hoped to secure a significant increase from other potential partners, but the brand has been severely tarnished and some skilful negotiation will now be required. Tim Crow of sponsorship consultancy Synergy said, “The reality is they will take a price for the England team sponsorship rather than set the price.”
In contrast, Karen Earl, chairman of the European Sponsorship Association argued, “People have short memories and will want to get behind the team and show unity and national pride. Sponsors want to tap into that and are in it for the long-term.” Nigel Currie of Brand Rapport concurred, “As long as England qualify, the level of interest they get in a World Cup period is massive. Everybody wants to be part of it.”
Indeed, a number of important second-tier sponsorship renewals and new deals were signed on the back of England’s impressive World Cup qualifying campaign, including Carlsberg (£12 million a year for four years) and kit supplier Umbro. They have also signed deals related to grass roots development with McDonalds, Mars and Tesco. The McDonalds deal is worth £10 million over four years and will provide financial support to more than 200,000 coaches; Mars will help drive the FA’s “Get into Football” campaign; while Tesco will sponsor the FA’s skills programme.
However, National Express sent a blast of cold air in the FA’s direction when they pulled out of their multi-million sponsorship deal with Dean Finch, the new chief executive, complaining, “I am not compelled by the impact of that sponsorship. We will not be renewing it. We are better focused elsewhere.”
"It's been so long"
(c) Other Revenue
Despite their old-fashioned reputation, the FA has been exploring new revenue streams, especially in the world of digital media, having launched FA TV with “official 24-7 access to Fabio Capello’s team” at the World Cup. Although this may strike some as particularly undesirable content, especially as it is presented by the incredibly annoying Tim Lovejoy, it can still be sold to broadcasters. The FA has further ventured into the modern world by screening some FA Cup matches live on the internet.
In other attempts to generate revenue, the FA is considering previously unthinkable initiatives, so the previous chief executive, Ian Watmore, said he wouldn’t “rule in or out” the idea of signing a betting partner. They would also not be averse to a sponsorship deal for Wembley, although they would baulk at renaming the stadium as a whole, instead offering the possibility of naming specific stands.
4. Protect The Finances
Although the FA’s last annual report announced with quiet confidence, “we ended the financial year well placed, in an uncertain economic environment, to handle the challenges our game faces”, there’s no doubt that their finances have been hard hit by Setanta’s demise (not their fault) and the unholy mess that is Wembley (entirely their fault). To be fair, they have reacted to these challenges by reducing their cost base by 10%, including the relocation of their offices from the plush Soho Square to Wembley, though it is unclear whether a tenant has yet been found to pay the £2.4 million annual rent on their former offices. Nevertheless, Ian Watmore warned that the next four years were a “critical period” for the FA’s finances.
Many would point to the removal just before the World Cup of the break clause in Fabio Capello’s contract that would have permitted a parting of the ways without penalty, as evidence that the FA is not overly competent in the finance arena. It would now cost up to £12 million to terminate the Italian’s contract, though a negotiated settlement would probably be less than the remaining two years of his contract. I just don’t understand the FA’s rationale here. If a top club wanted Capello and he wanted to go, would the FA really hold him to this contract against his will? There has been precious little evidence of such a strong approach elsewhere in football.
Of course, the FA has previous here, the most recent accounts revealing that Brian Barwick, just one of the numerous former chief executives, received almost £2 million in his last year, including a hefty £1.5 million pay-off, which represented three years salary. Nice work if you can get it.
Although the FA produced a profit before tax of £14.6 million on turnover of £183.7 million, the group as a whole registered a loss of £15.3 million, dragged down by the £31.1 million loss contributed by Wembley Stadium, almost all of that due to interest payments on the construction loans.
"We're going to Wem-ber-lee"
5. Wembley Stadium
As the financials amply demonstrate, far from being England’s crowning glory, Wembley is a gigantic millstone round the association’s neck. The stadium cost £757 million to build, going £300 million over budget, and has been a disaster from every perspective. To put it plainly, without this vanity box, the FA would have another £20-30 million a year to invest into football.
In fairness, thanks to money paid upfront by the Club Wembley bondholders, the outstanding bank loan is down to £341 million and the net debt is “only” £204 million after taking into account £133 million of cash. Furthermore, the FA has also managed to refinance the loan, so that the interest rate has been reduced from 7.8% to 6.8%, but the loan still has to be repaid over the next 15 years (until 2023).
Last year’s interest payments of £39 million were inflated by a £10 million write-off in respect of bank signing fees (relating to the original financing), but Ian Watmore estimated that the FA would have to subsidise Wembley to the tune of £20 million a year until 2014, when the business plan predicts break-even. Even that seems optimistic, given that it must rely on revenue growth, which largely depends on customers renewing their expensive Club Wembley boxes and premium seats (60% of revenue), which is by no means a fait accompli. Indeed, it has been reported that a many of those ticket holders have not renewed before this week’s deadline. The annual report described this as the “principal risk” facing Wembley, so much so that a significant reduction in renewals could put the company in default of its banking covenants.
In addition, the FA has to pimp Wembley out for a plethora of other activities, including rock concerts and American Football, in order to pay off the loans. This obviously damages the pitch, which then has to be relaid at a cost of £100,000 a time, and produces a dangerous playing surface that is hardly conducive to playing good football (though this may be a blessing in disguise for the England team).
The saddest thing about this saga is that it is totally unnecessary. Almost all other countries get along fine without such a monument to their ego, sorry, national stadium. There are many other stadiums that could comfortably host England matches, such as The Emirates, Old Trafford and St. James' Park, which would have the added benefit of allowing fans all around the country to watch the national team. It makes you want to find the blazer responsible at the FA and bash his head repeatedly into a table while yelling in his ear, “What were you thinking? You utter moron.” If they could find someone willing to take this awful stadium off their hands, they should get rid of it and focus on their core competences.
"Jack Wilshere - the future boy"
6. World Cup Bid
It’s come to something when England appear more concerned about winning the bid to stage a World Cup, rather than actually winning one, but there would be one huge advantage if we were awarded the 2018 tournament. It would allow us to make a radical transformation in our football set-up, safe in the knowledge that we would already have “qualified” for 2018, so the worst-case scenario from making wholesale changes would be failing to qualify for just one World Cup (Brazil 2014).
However, the bid is placing an additional burden on the FA’s resources of up to £15 million, not to mention the need to grovel to the likes of Jack Warner in order to stand any chance of winning. Having said that, this is a case of speculating to accumulate, as hosting the tournament could earn the FA serious money. Germany’s 2006 event earned their football federation around €150 million and the FA would expect to make even more, as there is less need to improve infrastructure in England.
What does go against the grain is that members of the FA appear to be enriching themselves during the bid process. Former chairman Lord Triesman was entitled to £100,000 a year for his commitment to the bid (two days a week) on top of his normal salary, while the other six members of the bid board were awarded an additional £35,000 a year for the duration of the campaign. Are we getting value for money here? Yes, if you consider the entertainment Triesman provided as he allowed his ego to get the better of him during dinner dates with a woman 30 years his junior, when he foolishly accused Spain and Russia of planning to bribe referees. It remains to be seen whether his resignation will save the bid.
"Sir Trev - puts the football in the FA"
An important step in the development of players and coaches is the National Football Centre, which is planned to be England’s equivalent of France’s Clairefontaine and Coverciano in Italy. The key word in the last sentence is “planned”, as the FA has owned the site at Burton since 2001, thus wasting nearly ten years. This facility must now be fast-tracked, allowing the association to bring together the best players from each club, building a playing philosophy and continuity for all age groups. Although the FA has already put £25 million into the project, £70 million is still needed to complete the centre, which will require assistance from private funding. Ironically, a solution may have been provided by the Germans, or at least BMW, whose training facility, which was financed by a residential development (hotel and houses), could be the template for Burton.
The FA’s failure to develop coaches is implicit in the decision to hire an Italian to manage the England team, but is most evident in the number of coaches in England holding UEFA’s top qualification, which is less than 3,000. In stark contrast, Germany has 13 times more coaches, Italy 11 times more, Spain 9 times more and France 6 times more. Can you see a trend here? This is a truly shocking statistic, an abject failure by the FA that signals a complete indictment of its priorities. The lack of expert coaches is felt most strongly among the youngsters, which is the most important period for a player’s development. As the great Dennis Bergkamp said, “8 to 12 are the golden years of learning.”
However, it’s not all doom and gloom and there has been some success at youth level this year: the Under-17 team beat Spain 2-1 to win the European Championship, while both the U-21 and U-19 teams were runners-up in their age groups. These days, there is a greater emphasis on technical skills and possession, as laid out in the FA’s radical new coaching programme for young players, “The Future Game”.
"England U-17 - land of hope & glory"
8. Grass Roots Investment
The FA is understandably proud of the amount it invests in the game – over £80 million in 2008. Approximately half of this was invested into grass roots football through the Football Foundation £15m, county football associations £10m, the FA Cup £5m, the FA’s investment programmes £8m and other grants £3m. The remainder was invested by the professional game including the FA Cup prize fund £20m, grants to the Football League £9m and the Professional Footballers’ Association £2m.
However, given the FA’s financial difficulties, this level of investment is by no means guaranteed. Indeed, the annual report makes this fear explicit, “At a time of considerable economic and financial uncertainty, the support of our commercial sponsors and broadcast partners is central to our ability to fund our investment in the management and development of the game and to support football at all levels.” Indeed, it goes further, describing such investment as “discretionary expenditure” that can be “reduced without breaching legal commitments.” Pleasing to the accountants, but not exactly encouraging for the football family.
"Triesman makes his point"
The FA’s own Vision document contains the goal of being “Trusted to Lead”, which focuses on the importance of leading and governing with confidence. This is apparently vital if the FA is to be seen as an influential and respected voice in the international world. Even though it is abundantly clear that they have dismally failed to regulate the Premier League, who only recognise self-regulation (a bit like investment banks), they still appear to have UEFA’s support: “The national association should retain overall control in order to ensure balanced development of the sport in question. UEFA is of the view that there is (and should be) a single governing body responsible for English football and that is the Football Association.”
It must be difficult for the FA to provide strong leadership when it has gone through so many chief executives itself, six in the last 12 years: Graham Kelly, David Davies, Adam Crozier, Mark Palios, Brain Barwick and Ian Watmore. To get round this problem, Alex Horne, the latest incumbent, has been given the title General Secretary, in line with his counterparts at FIFA and UEFA. However, given that both the chairman and chief executive have resigned in the last four months, there is still a power vacuum at the organisation’s centre, which is why Capello is being left hanging in the wind, as nobody is capable of making a decision - though there is a school of thought that he should only be informed two hours before England’s next match. At least the FA proved that it has not lost its sense of humour, when it said that Horne’s appointment would provide “strong leadership and stability.”
"It's been nice knowing you, Fabio"
Even the government has implored the FA to grow a pair. Former sports minister, Gerry Sutcliffe, said, “The FA must put their house in order. If that doesn’t happen, the influence of the FA will diminish and football as a sport will suffer.” He encouraged the FA to establish itself as the main decision-making, governing body for the game. However, the velvet glove masked an iron fist with a threat to reduce funding if the FA failed to deliver, starting with the implementation of the 2005 Burns report – though this in itself is so insipid that even the Premier League supports it. Similarly, Hugh Robertson, the new sports minister, has given football until autumn to sort itself out before examining whether a new structure should be imposed.
It is true that the structure of the FA Board does them no favours, containing an independent chairman, the chief executive and ten members: five representing the professional game (three from the Premier League, two from the Football League) and five representing the grass roots. This has been ridiculed as men in suits meeting men in blazers (they’re always men) with UEFA expressing concern at the lack of representation for managers, coaches, players, supporters, agents and referees. In contrast, the Spanish FA appointed the former Real Madrid player, Fernando Hierro, as technical director shortly after he retired in 2005.
The origins of the FA’s loss of control over the game can be traced back to 1992 when they sanctioned the establishment of the Premier League. Incredibly, the break-away was sold to the FA on the basis that it would benefit the national side, as the number of teams in the top league would be reduced to 18, thus reducing fixture congestion, but this never happened. Instead, the Premier League has been run in the interest of the top 20 clubs, most blatantly in their attempts to keep the vast majority of the enormous TV money for themselves. Even Graham Kelly, the FA’s chief executive at the time of the split, now admits the decision was wrong, describing it as a “tremendous collective lack of vision.” As UEFA put it, “break-away leagues do not help the development of sport as a whole (although they may benefit a small interest group).”
"What's going on?"
The reality is that football is suffering from a major constitutional crisis. Outgoing Football League chairman, Lord Mawhinney, baldly stated, “There is no doubt that there is a structural problem in the relationship between the FA and the two professional leagues.” The former executive director, David Davies, agreed, “The structure builds in conflict, which is hardly surprising, given it is riven with conflicts of interest and people’s roles and responsibilities are either blurred, or not defined at all, or worse still set up in competition with each other.”
And this week, former culture secretary, Andy Burnham, also put the boot in, “The governing body is a hung parliament and it isn’t able to take a view, as the interests of the Premier League, sadly, predominate at the FA.” He was probably thinking back to the time when he asked the football authorities to comment on the state of the game, only for the FA’s response to simply refer to those delivered by the professional leagues. This was widely interpreted as a cry for help from the FA, saying that it lacked independence and could not hope to govern football when members of its own board had vested interests.
The problem is epitomised by Sir Dave Richards, who is chairman of the Premier League and a prominent member of the FA’s Board at the same time. Despite his own appalling track record, which has involved saddling his former club, Sheffield Wednesday, with huge debts and taking a number of companies into administration, apparently he is the right man to decide Fabio Capello’s future. Let’s not forget that this is the mastermind who once said, “Does the Premier League hurt the national side? I think the answer has to be yes.”
"You can call me Dave"
Frustration at the lack of desire for change provoked Ian Watmore into resigning from his role after just nine months, complaining that he was “neither chief, nor executive.” Rather than leading English football, the chief executive at the FA appears to be little more than an administrator. When Watmore attempted to introduce some reforms, his proposal went down “like a bucket of sick”, as it dared to address areas like club ownership and reckless spending. It didn’t take long for the Premier League to circle the wagons. Similarly, Lord Triesman had been a dead man walking ever since he dared to point out that the Premier League was a wild west of debt and unsustainable player wages.
So why don’t we just let the Premier League run the game? That’s certainly the opinion of Wigan chairman, Dave Whelan, who harrumphed, “The FA is an amateur organisation running the world's biggest professional game. They haven't a clue how to run the England side, so let's get professionals in there.” That’s pretty rich when the Premier League clubs have managed to run up more than £3 billion of debt. Leaving that aside, can you imagine what would happen if the Premier League ran the national team? No friendlies, players not released for matches, clubs richly rewarded if they deigned to release players. Alternatively, they would leave the FA with all the boring governance, while concentrating on what the Premier League does best, namely making money. I’m sure they think they could do better with the television and sponsorship rights.
"Scudamore - you wouldn't like me when I'm angry"
If the Premier League really wanted to help the national team, they could easily forge a better relationship with the FA. That might sound naïve, but it seems to work OK in Germany, where the FA's counterpart, the DFB, has a far more balanced relationship with the Bundesliga and is able to weigh what is best for the league against what is best for the game as a whole. In particular, the Premier League could agree to: a winter break, fewer clubs, no participation in the Carling Cup and more home-grown players. Can you see that happening? No, me neither.
Even if the FA is a self-elected elite, it’s still really all we have to keep the barbarians at the gate. A recent Times survey confirmed that the FA is overwhelmingly the most trusted organisation in football. However, as The Stranglers once sang, “Something Better Change” or England will continue to win sweet FA. After Watmore’s departure, the FA claimed that it was “stable, working normally and geared for success.” Yeah, right.