Football Governance

Written evidence submitted by Rick Duniec (FG 72)

1 Biographical note

I have been a match-going football fan for about 45 years and currently still attend games, mostly at Elland Road, Leeds United. I am a former chairman of the Leeds United Supporters Trust and am currently the Trust Secretary. The Trust is a member of Supporters Direct and also a member of FSE – Football supporters Europe. I was previously heavily involved in SLU (Save Leeds United) which was an ad hoc group of concerned supporters during the time of the meltdown of the Leeds United Plc and up to the winding up of the Plc. I am personally also a committee member of the Yorkshire Division of the Football Supporters Federation and I attend Executive meetings of the Leeds United Supporters Club.

This submission is, however, a personal submission.

2 Summary of recommendations

· 2.1 The formal recognition that Football clubs are Monopolistic suppliers as far as the vast majority of their fans are concerned and that this monopolistic position in itself means that football clubs are not just like any other (non-monopoly) business. Such monopolies exist even when clubs are in close geographical proximity to each other.

· 2.2 The recognition of this monopolistic position presents legislators with an easily understood and generally accepted basis that may be used to justify intervention and regulation beyond that which applies to other (non monopoly) UK businesses.

· 2.3 The encouragement of the use of the "monopolistic" description at every available opportunity in relation to the football business and to football clubs so that public perceptions may be changed over time and with the objective that football clubs can no longer use the spurious argument that they are just like any other business and that they should be treated as such by law.

· 2.4 That additional legislation is enacted to better control footballs monopolies in ways that the Football League (for example) may never find itself in a position to do, as a result of its internal mechanisms for voting upon such changes. (Turkeys needing to vote for Christmas).

3. Statement of evidence

I personally endorse the evidence of the Football Supporters Federation, the evidence of Supporters Direct, and the evidence of the Yorkshire division of the FSF. This is a statement of evidence based specifically on my personal experiences as a supporter.

4 The football fan and choices of supplier

4.1 There is a well known joke that says whilst you might change your wife (or your

husband) you can NEVER change your football club. Within this joke lies a profound

truth which reveals the nature of the relationship between the fan and their "chosen"

football club. There are of course a small number of exceptions but these serve

to prove the rule more than anything else.

4.2 Bill Shankley is well known for his un-PC joke that essentially football was more

serious than life or death (to its fans).

4.3 Mrs Sophie Ridsdale gave her husband, Peter Ridsdale, a present of a cushion

embroidered with the words - "Life is a game. Football is more serious". She was

closer than most to the reality and intensity of the game.

4.4 All of the above are light-hearted acceptances of the deep importance of football to its followers and of the fundamental, even blind, loyalty which many fans show to their chosen club.

4.5 Not only is football a vital product to those who consume it, it is almost beyond comprehension that for example a fan might willingly decide to change his allegiance and move to another club. Players, managers and coaches will do it as a matter of course, board members and administrators might do it, increasingly we see owners doing it, but the fans remain in place and as loyal as ever. The fans do not move to follow another club. Even if they attend another clubs game from time to time, their thoughts will always be on their "real" clubs result.

4.6 The reality for most football fans is that no matter what their club does, no matter how much it takes them for granted, no matter how badly it treats them, no matter how much it attempts to exploit them, they will remain loyal to the brand. Fans will find some part of the clubs organisation to vent their anger and frustration upon but loyalty to the "concept" of the club does not significantly waiver. In many ways the fans ARE the club and everything else is temporary and transient.

4.7 There is little known evidence that Fans of Bristol City for example will in any significant numbers simply up sticks and take their business to Bristol Rovers.

Everton fans were not known to cross Stanley park and become Liverpool fans even

when Liverpool were dominating Europe. Huddersfield fans do not change allegiance

to Bradford City.

4.8 Football shows almost zero similarity to the situation where a bad experience or overcharging at Sainsburys will result in customers drifting away to Tescos and any suggestion that the market for football fans custom works in this way is misleading.

4.9 In economic terms this is very imperfect competition and represents something approaching a monopoly supply situation. Take it or leave it but you can’t get it from anywhere else.

4.10 This is very different to the market competition which other businesses experience and which imposes checks and balances upon the behaviour of businesses operating under such competition.

4.11 Football clubs are privileged to have the captive market of their fans and this situation allows them to abuse this privilege and in some instances this produces the inappropriate financial exploitation of the fan base.

4.12 An example of this might be an official membership scheme with arrangements such that paid up members can buy, say, 4 tickets for the same game with the result that almost nil tickets are available for sale to non members. In other words – if you want a ticket you must pay up and become a member even if there is no other benefit of membership for that individual fan. One ticket per member and the opportunity to have first choice may be justifiable, but as the member can only use one ticket themselves, there is little justification for them having access to more than one ticket as a result of their membership.

Such practices are naked exploitation.

5. Economic, Public, and Political Perceptions of Monopolies

5.1 In the UK there is a long history of recognition of the dangers (and sometimes the benefits) of monopolies. Even where monopolies are permitted (or even protected) there is a long accepted understanding of the need for additional controls, focussed legislation, checks and balances, and sometimes all-powerful independent regulators or ombudsmen, all of which has the objective of preventing the monopoly from inappropriate exploitation of its position.

5.2 Football has escaped such controls by perpetuating the fallacy that it is no different from any other business.

5.3 In reality football clubs are no different from any other monopoly. Some may be benign or benevolent but others are far from being either of these things.

5.4 Fans who are customers of these monopolies deserve to be protected from potentially excessive exploitation in the same way that customers of other monopolies need and deserve similar protection.

5.5 Economists have demonstrated, and politicians have taken on board, that additional constraints are required in order to moderate the potential worst excesses of monopoly suppliers. Monopolies cannot be relied upon to always restrain themselves in all potential circumstances.

5.6 The public will generally understand the need for additional controls when the example of monopolistic utility suppliers is used for example.

6. Changing perceptions and justifying intervention

6.1 Emphasising the reality of football monopolies and encouraging the common use

and reference to this concept will gradually result in the truth of the position of

football clubs to become more commonly accepted and understood. The

argument that football clubs are just like any other business will be revealed as

the falshood that it is, and may be replaced by the statement that football clubs

are just like any other monopolistic supplier.

6.2 Far from imposing special rules for football clubs, legislators can be shown to be

applying similar constraints as have been applied to other monopolistic suppliers

which have the objective or customer protection, however willing those customers

may be.

6.3 Treating football clubs in a similar way to other monopolistic suppliers is a

justifiable stance for government to take and draws upon precedence.

6.4 The Football League may internally believe that many additional controls are

needed (and there is some evidence of progress being made) but its own

mechanisms for formally adopting self-imposed additional controls requires a

majority vote (by football club chairmen) in favour of their imposition.

6.5 This may be likened to a self interest group of monopolists being asked to vote on

imposing anti-monopoly controls upon themselves and can be seen to be

desirable nor likely to be effective.

6.6 Where a body such as the Football League is shown to not have the

mechanisms within its own structure to bring about progress and improvement,

then assistance is required by outside authority which can enable and empower

football to better help itself.

6.7 Such assistance is of positive benefit to football and to football clubs, but most importantly it is of positive benefit to football fans.

January 2011