The rewards for corruption in British football

Despite being a lifelong Leeds United fan, I love the game of football. The business of football is a different matter entirely.

Ever since the Daily Telegraph’s exposure of now former England football manager Sam Allardyce’s comments to undercover journalists about how to get around the U.K. Football Association’s (FA’s) and FIFA’s rules on third-party ownership, it has revealed a string of other misdemeanours. The Telegraph began its corruption-in-football investigation last year, when it received information that “specific managers, officials, and agents were taking or receiving cash payments to secure player transfers.” Just a few days ago, the results of this investigation disclosed a string of more than 10 serious examples of corruption over a period of just four days.

Now it would seem that Allardyce is being rewarded for his conduct, as reports indicate a golden parachute of £1 million (U.S. $1.2M) will be paid.

Before Allardyce’s sting, few outside the industry knew what third-party ownership was. Third-party ownership of football players, or other top athletes, involves a third party—such as a company, investor or group of investors, or an agent—owning all or part of the financial rights to a player. This means that the third party, rather than the football club for which the player is playing, benefits from transfer fees every time the player is sold. Because of this return on their investment, third parties are keen to transfer players as often as possible to generate more returns.

As the Telegraph claimed: “Third-party ownership (TPO) of football players has been described as a form of modern-day ‘slavery’ by some of the most senior figures in soccer.”

“This is a moral sacking by the FA. But when you take the moral exit route, particularly when you’re talking about the national game, you then have to see it through.”
Gary Neville, Former Assistant to Roy Hodgson (Allardyce’s predecessor)



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Subsequent to the Telegraph’s disclosures, the FA confirmed they and Allardyce had “mutually agreed to terminate his position after his ‘inappropriate’ behaviour was brought to their attention.” The latest disclosures seem to indicate that since the FA did not sack Allardyce (rather that he agreed to step down), he was receiving a £1 million golden parachute. Many U.S. CEOs have benefited from substantial golden parachutes in the same way, by agreeing to leave rather than being fired for misconduct, or even poor performance. That the practice is common does not make it right. It’s a practice that is unacceptable to most shareholders and is likely to be unacceptable to most football officials and fans alike.

This last revelation has appalled many in the English football world, not least Gary Neville, former assistant to Allardyce’s predecessor Roy Hodgson [no relation]. Neville, the ‘nice man of English football,’ made a series of comments in his Gary Neville podcast on Sky Sports questioning the payoff. “The FA cited ‘inappropriate behavior,’ yet reports suggest there was a £1M payoff. When you’re setting the bar of moral standards, which is what the new FA regime are doing, that is fine … [but] it will be interesting in the future when there are incidents like player or staff misdemeanours, whether they then follow through with the same actions.”

“I have to say I'm involved in a sport that I love and an industry that at times I don't like.”
Gareth Southgate, Successor to Allardyce

Neville continued—despite being mocked by Allardyce at the time of England’s miserable loss to Iceland in the recent European Championships—in his typically moderate and conciliatory attitude: “It [Allardyce’s filmed advice on TPO] was wrong but not in the sense that there was improper or criminal activity. It was more a moral issue. This is a moral sacking by the FA. But when you take the moral exit route, particularly when you’re talking about the national game, you then have to see it through.” See it through and not pay Allardyce off, in other words.

But it is not just Neville. John Motson, the U.K.’s best-known football commentator, said that greed in football had become a “cancer” infecting the game. And Gareth Southgate, Allardyce’s caretaker successor, said: “I have to say I'm involved in a sport that I love and an industry that at times I don't like.”

Another, more recent Telegraph article disclosed a succession of stings in just four days following Allardyce’s exposure. They highlight an extraordinarily high level of alleged and proven corruption in the game.

27 September: eight Premier League managers accused of taking transfer ‘bungs’ (undisclosed financial incentives to a club official to make a player transfer happen).

28 September: chairman of FA Greg Clarke admits the FA is powerless to police ‘bungs’ in the game and vows to overhaul its disciplinary process.

28 September: Tommy Wright, assistant manager at Barnsley, filmed accepting a “bundle of £20 notes handed to him in an envelope during a meeting in Leeds last month” as a bung.

28 September: Jimmy Floyd Hasselbaink, the manager of Queens Park Rangers, was also filmed agreeing to be paid £55,000 (U.S. $66,580) to fly to Singapore to make a speech to investors in a fictitious Far East firm. 

29 September: Leeds United owner Massimo Cellino filmed offering to sell 20 percent of the club to help businessmen get around TPO rules.

29 September: Jimmy Houtput, the chairman of Dutch club Oud-Heverlee Leuven, recorded saying that the club would be willing to pose as the owner of footballers whose economic rights would be held by a third party.

29 September: Eric Black, assistant manager of Southampton, was filmed offering advice on giving bribes to officials at other clubs.

30 September: former manager of numerous Premier League clubs Harry Redknapp admitted he discovered that his players bet on the result of one of their own matches.

Of course, Redknapp himself could be accused of nepotism since his son, Jamie Redknapp, played under him at Bournemouth and Southampton, and his nephew, Frank Lampard, played under him at West Ham United. But such allegations are nothing to the level of corruption slowly being uncovered.

FOOTIE FAQ

Below is an FAQ on governance in English football from the Daily Telegraph.
Who is responsible for governance in English football?
The Football Association is the governing body of English football and has jurisdiction over the Premier League and Football League, which are merely competition organisers. However, the Premier League and Football League also have their own rulebooks their participants must adhere to.
What powers do these bodies have?
All three have the ability to investigate and punish breaches of their rules, call witnesses and request documents and other materials. They can even punish those who refuse to provide them. But they can do little when a suspect denies being in possession of such documents or materials, as they have no power to raid private premises. Former FA figures have also raised concerns over its lack of resource allocated to governance.
How often do they use their powers?
All three bodies claim a zero-tolerance approach to corruption and have acted in the past when enough evidence has been uncovered to prove wrongdoing. But investigations have too often foundered on a lack of evidence.
Source: Daily Telegraph

Immediately following his ‘resignation’ it would seem unlikely that Allardyce would be able to get another job in English football, but with corruption this commonplace, a job offer looks extremely likely. Bill Coffin, editor of Compliance Week, commented: “When we look at ethics and compliance failures in sport, we see some of the most critical issues of ethics and compliance writ large. When I spoke with a former compliance officer who had been brought in to work with FIFA—a post he soon resigned in protest—he mentioned that corruption is rife within sports; and why not? It’s not just FIFA—most sporting organizations have no meaningful oversight, and they have not only the incentive of big money to lead them astray, they have the visceral connection people have with sports and particular teams—tribal allegiances that can also subvert one’s calculus of right and wrong.”

It’s not just FIFA, indeed. Although he is fighting the charges, Brazilian police say they have overwhelming documentary evidence that Patrick Hickey, former executive board member of the International Olympic Committee, former president of the European Olympic Committee and former vice-president of the Association of National Olympic Committees was involved, with eight other individuals, in ticket scalping at the Rio 2016 games. Brazilian authorities believe that the illegal ring had been in existence for about eight years and was preparing scalp tickets for the forthcoming Tokyo Olympics. But Hickey has not received any kind of pay off from any of the Olympic Committees on which he sat.

When FIFA, the pinnacle of authority in the sport, shows itself riddled with corruption at almost every level it can hardly expect any other kind of behaviour from the football associations, leagues, and professionals that look up to it. A more coherent example of how tone at the top affects behaviour throughout an industry could not be imagined.

Continue the conversation at Compliance Week Europe: 7-8 November at the Crowne Plaza Brussels. Join us as we look at changes in global anti-corruption regulations, slave labour risks in your supply chain, and how to detect fraud, to name just a few topics. Learn more