Graham Jones MP: Football Governance And Venky’s

Member of Parliament for Hyndburn and lifelong Blackburn Rovers fan Mr Graham Jones attended the recent parliamentary debate on football governance and spoke for some fifteen minutes on the issue of Blackburn Rovers’ problems under the ownership of Venky’s.

The debate on a report on football governance prepared by a select committee of the Department of Culture, Media and Sport was held on Thursday, 9 February, in Westminster Hall, one of the chambers in the Houses of Parliament. The debate lasted for some three hours and addressed a number of issues pertaining to the ownership of football clubs in Britain, particularly with reference to the involvement of overseas interests.

The government has resolved to take decisive action in order to protect the interests of the national sport and it is understood that it is prepared to introduce a licensing system for ownership of football clubs as a robust alternative to the fit and proper persons test currently in place, which is widely viewed as inadequate. The Premier League has been give a deadline of 29 February by which it must produce a viable proposal of its own for the safeguarding of the integrity of the competition.

This weekend, BRFCS had the chance to speak to Mr Jones with regard to the debate on football governance and how this relates to Blackburn Rovers and the club’s owners, Venky’s. Ahead of the publication of this interview in BRFCS Podcast 26, the full text of Mr Jones’ speech in parliament is reproduced below for reference.

Graham Jones (Hyndburn, Labour): It is a pleasure to serve under your stewardship for the first time, Mr Havard. I declare an interest as a season-ticket holder at Blackburn Rovers, where I have been attending regularly since 1978. Blackburn’s proud 137-year history and status as a founding member of the Football League is under significant threat due to the risks of poor foreign ownership. The club is in a sorry state, finding itself in the firestorm of the foreign ownership debate. I hope that lessons can be learned from my contribution.

Over the past 14 months, the club’s proud history has received little respect from its new Indian owners, Venky’s London Ltd. I must apologise at this stage; I was supposed to be joined by my right hon. Friend the Member for Blackburn [Mr Straw], who wanted to concur with a lot of what I am going to say. I would like that noted on the record.

The club’s sale by the Jack Walker Trust to the Indian company Venky’s in November 2010 has been followed by a series of damaging headlines, shock resignations, instability and regression of the club’s fortunes on and off the field. More recently, elements within and connected to the club have engaged in a damaging PR campaign against supporters that has been confrontational and, in my view, has highlighted significant failings of the owners, the manager and his expansive role and associated parties. They are at the centre of the shambles that is currently Blackburn Rovers, a club held up and respected by the football industry as an example of one of the best-run clubs in the Premier League. Weekly protests, a plummeting league position, huge losses, dubious transfers, escalating agents’ fees and — more pertinently, and against league rules — the suggested involvement of agents in the running of the club have all undermined its authority and management.

I put on record the comments of Alex Ferguson, who seemed to echo that final point about the role of agents in football clubs. The role of the board of directors is now unclear, and their authority is now negligible or, at worst, undesirable. That is far removed from the mirage painted by the new owners: a Shangri-La of increasing transfer budgets, Champions League football and the promised continuation of a stable and well-run club.

The current situation at Blackburn Rovers opens up a new set of questions about football governance, transparency, the fit and proper persons test and the undermining of the Premier League itself. What concerns me and many supporters is the role of Jerome Anderson, a leading football agent, and of Steve Kean, manager and, more significantly, Anderson’s client in the running of the club under the Venky’s governance arrangements.

Following Rothschild’s failed attempt to sell the club, Mr Anderson was brought in to find a new buyer and found Venky’s. After that takeover, he became an advisor for Venky’s at Blackburn Rovers. In his own words, that involved sleeping and eating at the training ground and advising and helping during the transfer window of 2011. I remind the House that rule H8b of the football agents regulations governs the behaviour of agents and their organisations and prohibits them from having an interest in a club, which includes “being in a position or having any association that may enable the exercise of a material financial, commercial, administrative, managerial or any other influence over the affairs of the Club whether directly or indirectly and whether formally or informally”.

It could not be clearer. Anderson has stated on his own website and reported on the Sky Sports website: “In January 2011 I was requested by the owners to assist the club during that transfer window. … At the conclusion of the January 2011 transfer window I ceased to assist Blackburn Rovers Football Club in any capacity and I can confirm that I have not had any role or influence in their transfer policy or any other business of the club whatsoever since that date.”.

I wish to draw Members’ attention to a leaked letter signed by the former and respected chairman John Williams, currently employed by Manchester City, his equally able assistant Tom Finn and the finance director of Blackburn Rovers. The letter says: “Finally, our Football Secretary” at Blackburn Rovers “has, this morning, been instructed by SEM” — the company with which Jerome Anderson is involved — “to issue a mandate to a third party without any reference or approval from the Board. We are not familiar with the player concerned nor is he one that has been mentioned to us by the Manager. Could you please, therefore, clarify the role of SEM in our transfer policy?”.

That letter was sent to the owners last January. I will draw further on its contents later.

Those decisions have led to the resignation of an experienced and highly regarded set of administrators, risking the club’s ability to manage its own affairs. Notable and of grave concern is an agent’s admission that he has been involved in decision-making within the club, that that has allegedly involved instructions to the club’s directors to make payments to third parties, and that the manager connected to that agent and given overall responsibility for all affairs at the club — on and off the field and above the board — has a conflict of interest.

Dai Havard (in the Chair): Order. Can I advise the Member? I need to be careful about privilege. I understand what you are saying, but I am listening carefully. Quoting from published material is fine, and I noted your word “allegedly”. If you carry on with caution, I am happy, but I am listening carefully.

Graham Jones: Thank you for that advice, Chair. I respect your latitude. The letter has been published in several national newspapers and online, just for clarity.

Dai Havard (in the Chair): It must be true, then.

Graham Jones: It is more than alleged — I think it is probably true, as nobody has come out and disputed it.

Clearly, there is a significant risk that Blackburn Rovers will regress rapidly while its owners have little understanding of football and the whole management of the first team and club administration rests with an individual as unqualified and inexperienced as Steve Kean.

Mrs Desai, the club’s apparent owner and quasi-decision-maker, confirmed in the Lancashire Telegraph that Mr Williams did not get on with manager Steve Kean: “I know that he did not get along with Steve [Kean] and he had struggled to accept Jerome [Anderson]’s role at the club.”.

Ian Battersby, a well-known supporter and local businessman, flew out to meet Venky’s in Pune, India. Blackburn Rovers Football Club is just one of 170 subsidiaries in the Venky’s group. Each has a business head who reports directly to the Venky’s board. In the case of the Rovers, that appears to be Steve Kean. Ian Battersby said: “The notion of a board executing the owners’ plans on a day-to-day basis is a complete anathema to them and many of our problems flow from that. … We have a sporting director who nobody would know if they were sat next to him, and that’s a high-profile job allegedly responsible for player recruitment. We have a deputy chief executive — but no chief executive — whose effectiveness is, in the circumstances in which he operates, negligible.”.

I place on record the manager’s statement that he had an irrevocable confrontation with the outgoing manager and that important questions persist about his involvement, as a client of Jerome Anderson, in a coup to oust the former manager, Sam Allardyce, bypassing the board of directors. None of that serves the club well.

Questions remain whether proper due diligence took place and whether Mr Anderson or his associates had a predetermined managerial change in mind and were interested not in the club’s assets and liabilities but in first-team managerial contracts. The FA must look into it. What we do know is that the current board, tasked with the responsibility of managing the club, seems powerless to act in the best interests of the club. Serious questions now have to be asked about the owners’ ability to manage an English Premier League club; their awareness of Premier League rules; their future intentions for the club; whether foreign business practices bring the club into disrepute; and whether such practices should be prohibited within the framework of the Football Association Premier League’s fit and proper persons test.

Recent financial accounts have resulted in further destabilisation of the club, and newspaper reports have claimed that the club’s bank, Barclays, has initiated steps to protect its liabilities. Recent club accounts detail losses accrued up to June 2011 of £18.6 million; the previous year’s loss was only £1 million. The club’s value while it is in the English Premier League is approximately £40 million. According to newspaper reports, Barclays is protecting its liabilities in the club by reducing credit facilities and discouraging asset sales of high-value players.

In other words, the bank is determining transfer policy. That practice is not new. John Williams stated a year ago in his letter to the owners of the club: “Brian Foreman from Barclays Bank is attending the Liverpool game tomorrow and has asked for a catch up meeting with us before the match. He will inevitably ask about our plans for the transfer window and at the present time not only are the Board unaware of these but it has been made clear that we will not have any input into the strategy. This is unacceptable and not in the best interests of the club.”.

Why were Blackburn Rovers purchased by Venky’s? Were they purchased to promote football or to promote chicken burgers? Worryingly, during this period, fees paid to agents have risen approximately threefold. The £475,000 transfer of Ruben Rochina carried an additional agent payment of £1.65 million, which was during Jerome Anderson’s admitted involvement. Despite an alleged defensive injury crisis, an out-of-contract 28-year-old, Bruno Ribeiro — described by the manager as the next Denis Irwin — who had no caps and little top-flight Brazilian experience, was given a three-year contract and has yet to make a single appearance in the team or on the bench. Myles Anderson, who is Jerome Anderson’s son, was brought in despite having made only one appearance in the Scottish league. David Goodwillie, who is, to quote the manager, “the next Wayne Rooney”, was brought in from Scotland.

What has been destructive in this spiralling vortex is a smear campaign by the manager, his agent and other clients, which is aimed at ordinary Blackburn Rovers fans who seek only constructive dialogue with the club on the subject. To my knowledge, there have been no arrests or public disorder during the protests, which have always been conducted with the full consent of the police and dialogue with the club. The protests were suspended for seven matches to facilitate positive discussions, but those discussions have not taken place. Three pre-arranged meetings between the manager and organisers have been cancelled by the manager or by the club, the authority over which lies with the manager.

The Premier League is culpable in allowing the current trend of foreign ownership to continue without suitable safeguards; we have heard about Liverpool, Manchester United and Portsmouth. I welcome the comments of the Select Committee Chair that one can drive a coach and horses through the fit and proper persons test. That is clearly the case. This is coming from a completely different angle from Manchester United and Liverpool, and it should open our eyes to how we deal with football governance matters.

As Mr Battersby, the Blackburn businessman, states: “We hear an awful lot about the sham that is ‘fit and proper’. … This is a major industry we are talking about here — it’s worth billions globally and there has to be something akin to licensing of owners. How can someone wing their way into the UK, take ownership of a club and within 12 months destroy a community? The warnings of Portsmouth, Notts County and now Blackburn must be heeded.

If the same had happened at Jaguar or similar, there would have been outrage in the House of Commons and yet we sit and watch this happening. In essence, the Premier League are watching one of their member clubs get savaged and haven’t batted an eyelid. It is nonsense.”

Venky’s management of Blackburn Rovers has raised a number of broader questions about the corporate governance of Premier League clubs. The FA must look beyond its current ownership rules at arrangements for licensing prospective owners. Those arrangements must include, as Mr Battersby recommends, stricter compliance over financial strength and track record; the quality and strength of the management team; experience of delivery in the sector; the feasibility of the business plan and strategy; and corporate governance. There would need to be provision for the submission of quarterly- or half-yearly accounts in addition to the annual ones. The fit and proper persons test in this case has failed. Dialogue with supporters has failed, because the owners have resisted all communication and have neutralised the board’s involvement.

I conclude with another remark from Mr Battersby: “137 years of football heritage has been decimated inside 12 months. It is like watching a slow-motion car crash.”.

Note that this parliamentary information is reproduced from the online Hansard with minor editorial adjustment for style in accordance with the terms of the current Open Parliament Licence. The video of the debate in its entirety can be viewed on the Parliament Live channel, with Mr Jones’ contribution to the debate starting around the 80-minute mark. The transcript of the debate in full is available on Hansard and Mr Jones’ contribution starts here.

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