Pools Companies

– in the Scottish Parliament at 5:10 pm on 17th November 2004.

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Photo of Murray Tosh Murray Tosh Conservative 5:10 pm, 17th November 2004

The final item of business today is a members' business debate on motion S2M-1912, in the name of Roseanna Cunningham, on pools companies holding Scottish football to ransom. The debate will be concluded without any questions being put.

Motion debated,

That the Parliament expresses its concern at the decision by Littlewoods, Vernons and Zetters football pools companies to cease payment to the Scottish Football League (SFL) of copyright payments for the right to use SFL fixtures in their pools games; notes that, for this season, the SFL was scheduled to receive around £600,000, which would have meant an income of some £20,000 for each club; recognises that 20% of the SFL's commercial income comes from this source and that this decision will have a major impact on the finances of every member club of the SFL, and therefore believes that the three pools companies should reverse the decision.

Photo of Roseanna Cunningham Roseanna Cunningham Scottish National Party 5:14 pm, 17th November 2004

I am grateful for the opportunity to bring this debate to the chamber. I am also grateful to Geoff Brown—who is, of course, the chairman of my local senior football club, St Johnstone Football Club—for bringing the issue to my attention in the first place. I know that other clubs will have been in touch with members about the same issue.

The debate is about football and, I guess, about gambling. Football is devolved while gambling is reserved. I have taken up the issue with the Minister for Tourism, Culture and Sport here in Scotland, while my Westminster colleague Annabelle Ewing MP has written to the minister in London who is responsible for gambling and I hope that the two ministers will at least talk to each other about it.

In his initial letter to me, Geoff Brown spelled out the situation. Since 1960, the Pools Promoters Association—which comprises Littlewoods, Vernons and Zetters—has made copyright payments to the Scottish Football League, as it has done to the other three leagues, for the right to use the SFL's fixtures in its games. However, as of this season, the pools companies have stopped all payments to the leagues.

The SFL distributes all the money that it gets from the pools companies directly to the clubs. This season, the SFL was due to receive around £600,000, which would have meant an income of some £20,000 for each club. If we bear in mind the financial knife edge on which many clubs operate, it becomes clear how incredibly important that money is to their survival. In fact, the revenue from the pools companies amounts to 20 per cent of the SFL's commercial income.

The SFL has provided me with further background on the dispute. Originally, the payment was based on a percentage of the stakes that the pools companies received, minus prize fund allocation, Government tax and payments to charities. When discussions began for a new contract this season, the Pools Promoters Association sought to change the basis on which royalties were calculated. It proposed a heavily reduced fixed fee or a reduction—from 4.75 per cent to 1 per cent—in the percentage of the stakes that the pools companies received that went to football. It is understandable that that major cut was rejected by the leagues.

I admit that I may have been a little harsh with the pools companies in the title for the debate and I understand that they have been having a difficult time since the establishment of the national lottery. I wrote to the pools companies and this afternoon I met Gary Speakman of the Pools Promoters Association, who, along with a colleague, is in the gallery to listen to the debate. I know that they do not want to cause football harm. It is their view that any intransigence that there has been in the negotiations has been on the part of Football Dataco Ltd, which acts as agents for the two Scottish and two English football leagues.

Photo of Dennis Canavan Dennis Canavan Independent

In a letter to me, Littlewoods has claimed that

"no monies are currently being held back from Football, as there is no agreement in place" between the pools companies and the football leagues. Is that not an admission by Littlewoods that it is acting unlawfully by using football fixtures without the permission of the football leagues?

Photo of Roseanna Cunningham Roseanna Cunningham Scottish National Party

I understand that considerable legal debate on that matter is going on in the background. However, the fact is that a long-standing agreement has now come to an end and nothing has taken its place; that is what is causing the problem.

We know that the pools companies are in difficulty. The turnover of Littlewoods has declined from £800 million in 1993 to £89.7 million in 2003 and employee numbers have fallen from 5,000 to 300 in same period. According to Vernons, the industry has lost 90 per cent of its customers and revenue to the national lottery, which now dominates what it calls the long-odds betting market—I take that to mean that people who participate in it do not have much chance of winning anything. As a direct result of a Government decision in 1994 to establish the lottery, the turnover of Vernons has declined to the extent that it has reduced its work force in Liverpool from 1,050 to 120.

I have no doubt that the pools companies will also be worried about the potential impact of the planned loosening of the gambling laws. There is a huge difference between the weekly punt on the pools, which is almost a part of our way of life, and the slot-machine alleys and mega-casinos that are being touted at Westminster.

There is a symbiotic relationship between the pools and football. Many small team names and places are widely known simply because they appear in the classified results. However, the face of betting on football matches is changing and there is no doubt that there is an imbalance between what the pools companies have been paying and what is paid by bookmakers, for example, who use the same data for telephone and internet betting. That is part of the problem that Dennis Canavan referred to. A bookmaker such as William Hill will have paid about £0.1 million in total over the past three years, whereas Littlewoods has paid closer to £10 million over the same period. I understand and appreciate all that.

It is clear to me that the Westminster Government has a role to play in putting the situation right, as the root of the problem lies in the establishment of the national lottery, which has had a devastating effect on the pools industry. However, there is also a role for the Scottish Executive to play in trying to secure a successful resolution to the matter. We have debated the state of Scottish football in the chamber before—indeed, the debate was one of those rare occasions when the Executive parties supported a Scottish National Party motion.

The bottom line for me is that most SFL clubs are small community clubs. They are also businesses that are in a delicate financial state. We are talking about people's continued employment as well as their continued enjoyment. Kenny MacAskill said in the debate in February:

"Scottish football finds itself in troubled times. The list of clubs in financial trouble reads like an excerpt from a hall of fame. More may follow those that have already been engulfed. Others, professional or not, are in debt or at best cash strapped."—[Official Report, 11 February 2004; c 5695.]

Although I have focused on the SFL clubs, I have no doubt that some of the Scottish Premier League clubs are also feeling the pressure—we know that a number of them are teetering on the edge of bankruptcy. Any disruption in the flow of anticipated revenue will be difficult for them to deal with.

The purpose of the debate was never to point the finger of accusation at any one sector in particular, but to highlight the issues involved. I urge the parties to come to an agreement before it is too late for some of our financially weaker football clubs. I also urge the Executive to play whatever part it can in ensuring that some kind of compromise is arrived at.

Photo of John Swinburne John Swinburne SSCUP 5:21 pm, 17th November 2004

I thank Roseanna Cunningham for bringing this important topic to the chamber. I declare an interest as a director of Motherwell Football Club and an employee of the club for the previous 25 years. During that time, I was closely associated with the commercial side of football. Having attended many league meetings, I can say that the importance of the game can never be overstated.

We live in times when foreign imports can command salaries of around £30,000 or £40,000 a week. For some clubs, however, £20,000 per annum is a sum that, if taken away, could lead to their demise. The most important contribution that the £20,000 input makes to the smaller clubs—let us call them that—is in funding their youth development work. All over the country, in scattered little villages and towns, young people are being given the opportunity to show their footballing skills, to enhance those skills, to become members of their local team and perhaps to move on to higher grades of football. All that is of the utmost importance.

Unfortunately, football is going through a traumatic time. If there were some way of legislating for it, I would love to see the money from the pools being allocated only to the clubs that field a maximum of three foreign players in their teams. If a club did not comply with that rule, no money would be accorded to it. However, that suggestion might be a bit controversial.

The beauty of the pools contribution is that all the clubs right across the board—from East Stirling Football Club to Falkirk Football Club—received £20,000 or thereabouts. When clubs are having to do their sums in trying to make ends meet—I am thinking of East Stirling Football Club, which is allegedly one of the clubs with the lowest pay in the country—£20,000 is an enormous sum to take out of the equation.

It is wrong of any group of pools promoters to walk away from an agreement that has been standing for decades. They cannot simply say, "We cannot afford to pay this," and think that they can get away with it. They are using the names of football clubs to make money. There must be some legal recourse. I am sure that, if the clubs went to law, they would win. Sadly, however, none of them can afford to take legal action against the big pools companies. The Parliament and the Executive must be able to do something to ensure that the proposed reduction cannot be imposed on clubs in such a draconian fashion.

We should remember that the money is used towards getting young kids out of school and into training sessions; it is used to pay professionals to teach the youngsters the rudimentary skills of the game. However, the money could be cut off because the pools companies think that they are not making enough profit. Quite frankly, the profit of a pools company is a secondary consideration to the youth development of football in this country.

We have an international game tonight. I do not know what the outcome will be, but people will see one of the most youthful teams that Scotland has ever produced. The average age of about eight of them is 22. Those kids will play their hearts out for their country. Young people could be disadvantaged by not being able to improve and promote their skills because pools companies are taking funding away from clubs, which should not be tolerated. I support Roseanna Cunningham's motion and thank her for raising the issue.

Photo of Andrew Welsh Andrew Welsh Scottish National Party 5:25 pm, 17th November 2004

The sense of concern, the realisation of what is at stake and the desire to seek a sensible solution are already clear in the debate. Professional football is not just a business; it is an important part of Scotland's culture and communities and it is the foundation of a structure topped by the national team and international club competitions.

The majority of professional football clubs in Scotland are members of the Scottish Football League, which are local clubs in communities throughout Scotland. Today's debate results from the Pools Promoters Association ceasing payment of fixture royalties, which were worth £20,000 to each SFL member club. That is a huge and threatening loss for the majority of teams. In what was a symbiotic relationship for more than 40 years, the pools companies recognised that they had an obligation to the sport from which they profited. I hope that this debate will encourage a new agreement to the mutual benefit of the football leagues and the Pools Promoters Association.

Given last week's European Court of Justice judgment threatening an end to the traditional relationship between football leagues and pools companies and with problems extending to other sports, including horse racing, the dispute is part of a much bigger picture.

I call on the Executive to play its part in delivering a sustainable future for professional sports in Scotland. That will require community networks to be strengthened and supported. It will also require a rethink of core funding, especially for SFL members, which do not have anything like the fallback of television revenue or gate receipts that SPL clubs generally have—and all this is taking place in a climate where even SPL clubs are struggling. Public funds are already building up football at youth and grass-roots levels, but that investment will be pointless if there are no teams left for those young hopefuls to play in and start to fulfil their dreams, talent and potential. Scotland needs a strong network of professional clubs.

As the pools companies have discovered, times have changed. At the business end, with so many competing demands on people's time and money, teams cannot now depend on the attendances that they once attracted. However, that does not mean that the community role of clubs is equally diminished, as clubs continue to boost local economies and identities, provide a source of local employment and attract visitors to their communities on match days.

Football is a fundamental part of Scottish culture and the clubs are an integral part of community Scotland. The Executive claims to promote culture, communities and sport. Will it now recognise the worth of Scotland's professional football clubs in that context and offer them direct support to enable them to secure a viable and sustainable future? If a team goes out of existence, jobs are lost and a source of community spirit and identity is gone. This living part of Scotland's culture must not be allowed to disappear. I hope that tonight we will hear about Executive action to ensure that that does not happen.

Photo of Jamie McGrigor Jamie McGrigor Conservative 5:29 pm, 17th November 2004

In no way do I or the Conservative party wish to enter into a legal dispute between two parties. However, I cannot help feeling sorry for the victims of the argument between bookies and pools companies: the ordinary clubs throughout the United Kingdom. Those clubs are loved by their fans and are the grass roots of football, but they are trapped in a fight between pools companies and bookmakers, without any direction, support or encouragement from the Labour Government.

I do not particularly want to politicise a members' business debate. However, Tony Blair and company—and the Scottish Executive—have been issuing statements about getting rid of obesity by making youngsters more active and saying that they are encouraging initiatives to involve people in active sport, but what is a better active sport than football and who will fund those initiatives if the clubs do not exist? Ours is not like some European countries, where the game is subsidised—in Italy, the Prime Minister, Signor Berlusconi, owns A C Milan—although Prime Minister Blair is a dedicated Magpies supporter, which I know because I have read of his fantastical anecdotes of Newcastle United Football Club matches that he attended when he was a boy.

I am not privy to the past negotiations between the pools companies and the Government, but sensible arrangements have been agreed, such as the extra funding from the pools companies for all-seater stadia in return for less betting duty after the Hillsborough disaster. However, in 2003, the Labour Government allowed the three pools companies to cease funding the Football Foundation charity, which used to get 3 per cent of the income of gross stakes. What a shame. That body has done much for the grass roots of football, including the domesday book project that set out to assess the conditions of all the grounds, buildings and facilities in order to make a database for the United Kingdom. The Football Foundation has had its funding stopped, but the Government's sports and arts councils still get their 3 per cent of the gross stakes; those bodies—regrettably—seem more concerned with the glamour of the top clubs than with the potential seedcorn from which it all comes.

I am not surprised that the 114 football clubs that are not part of the Premier League are bitter when they receive so little help or direction from a Government that does not practise what it preaches and does not seem interested in the muddy origins or the blood and guts of most of the football that is played in this country. The Government must realise that, since 1881, football has been part of British culture—especially Scottish culture—and that success or failure in football can affect the morale of our nations and every city and town that has its own football club.

Football Dataco, which, since 2001, has collected the licence fees that the pools companies and the bookies pay, has explained to me that, although the pools companies would like to switch to a fixed-rate levy like that enjoyed by the bookmakers, it wants the bookies to be on the same system as the pools companies. The pools companies have a valid point: not only has their income dropped, but they pay more than £3 million annually, whereas the large bookmakers have been paying only £22,000. The pools companies cannot want to prevent the clubs from flourishing, but we now have a situation in which Football Dataco is in conflict with the bookies and the pools companies, so no one is paying any money into the internal mechanism that distributes money down the family tree of football and provides the less-well-off clubs with revenue that is vital to their existence. If they are already strapped for cash, the SFL clubs will find it hard to fund a court case, which would only be likely to line the pockets of lawyers.

I agree with Roseanna Cunningham that a compromise is needed. It surely would be more sensible for all concerned—the pools companies and the bookies, which would both benefit from the nation's love of football—to sit down with Football Dataco and sort out a fair way of putting enough back into the goose that lays the golden egg to keep the goose laying and the smaller clubs playing.

Photo of Michael Matheson Michael Matheson Scottish National Party 5:33 pm, 17th November 2004

I apologise, because I might have to leave early due to a constituency engagement. However, I congratulate Roseanna Cunningham on securing time to debate this important issue.

Like other members, I have a received representations from a number of football clubs. The headline figure of £20,000 alone does not appear to be a lot of money, but the reality is that clubs in the SFL will lose money. Those are the smaller, community-based clubs in Scotland, many of which operate financially on the margins. To the SPL-member clubs, £20,000 might not be a lot of money, but to clubs such as East Stirlingshire FC, it is a considerable amount. George Craig, the managing director of Falkirk FC, put it to me that the situation has serious financial implications for his club, which is one of the largest in the SFL.

It is important to emphasise the fact that the clubs that we are talking about are community based. They involve schools, local community networks and the local community in a wider sense. They play a valuable and important role in the community.

I recognise that the Executive finds itself in a difficult position with respect to this matter. Technically, it is a dispute between two private organisations, so we might ask what the Executive's locus is in trying to resolve the issue. When clubs begin to get into financial difficulties, the first area that they start to cut is often their community services—the community aspect of developing local football players or local clubs. I suspect that, if there is not a suitable resolution to the matter, that is the very first area in which a number of clubs will consider cutting back their expenditure. The Executive has a role to play, because that community aspect is a key part of any strategy to try to encourage young people to get physically active, to get involved with their local football club and—I hope—to play for their nation at some point in the future. Therefore, I believe that the Executive has a locus in trying to ensure that the matter is addressed.

I have real concerns about the way in which the pools companies have gone about things. I quote George Craig, managing director of Falkirk FC, who states in a letter to me:

"The Pools Companies have unilaterally withdrawn payment as part of their campaign to introduce a different formula for calculating copyright fees that would significantly reduce their payments to football."

That action has been carried out by the pools companies as part of their campaign to force the hands of the poorer football clubs so that they agree to a financial settlement that does not, in fact, reflect the market value of what they are providing. It is a cynical approach, which I do not accept.

I recognise that the pools companies have had financial difficulties with the introduction of the national lottery and that they have made significant financial contributions to the game of football over the years, but for them to act in such a unilateral fashion while recognising the serious implications that could be faced by smaller clubs is not acceptable. I hope that the Executive will be prepared to apply pressure to the pools companies to try to achieve some sort of compromise.

Photo of Christine May Christine May Labour 5:37 pm, 17th November 2004

I, too, thank Roseanna Cunningham for bringing the debate to Parliament tonight. I should declare an interest: only today, I accepted an invitation to be a co-opted member of the board of the East Fife Supporters Trust—perhaps not for my knowledge of football, which is legendarily poor, but I hope because of what I can bring to the supporters trust and for what we can bring to the community collectively.

Like Roseanna Cunningham, I thank the chairman of East Fife Football Club, Derrick Brown, who wrote a letter that I have copied to all members—I suspect that it is the round robin that reached everybody here. It shows the level of concern that is felt among football clubs, although I can speak only for East Fife, which is a proud team from a proud area. East Fife has just raised significant funds to complete the acquisition of its ground and its title. That is quite a momentous event in my constituency and for the Methil area in particular.

Whether it is to do with pools companies' inability to pay because of the lack of legal agreements, or to do with a lack of willingness to conclude such agreements, the impact of the decision that has been taken is worrying for clubs and communities.

My earliest football-related memory is of my dad finally agreeing that I was old enough to be given a pencil and the Saturday newspaper when "Sports Report" came on what I think was then the home service. Is anybody else here old enough to remember its signature tune? I do. I would write down the results—there was a set form on which to do so. We did that so that we could check the pools coupon to see whether we had won. Did we? No. We never won.

I remember results such as East Fife 10, Cowdenbeath 0—unfortunately it was usually 0, even then—and teams such as Stirling Albion and Brighton and Hove Albion, which I thought was all one word. I did not know where it was, because I was a little girl from the suburbs of Dublin and had never heard of any of those places. As Roseanna Cunningham said, we knew of those places just because of their association with the pools and the lists that were read out.

I am not asking the minister, as others have, to commit to funding football clubs. I do not think that that would be the right thing to do. However, I ask the minister, as others have done, to consider whether there is scope for her to find a solution and whether it would be appropriate for her to make contact with her counterpart in Westminster—as far as I am aware, this is not just a Scottish issue—to see whether politicians can help broker a solution.

Football is important and football clubs are important in our communities because of the economic benefits that they bring and because communities can use their facilities. We really want to help to support them so that they can remain in our communities.

Photo of Rob Gibson Rob Gibson Scottish National Party 5:41 pm, 17th November 2004

Roseanna Cunningham focused on the nub of the issue and I thank her for raising it. Recent correspondence that we have had from the pools companies explains how they hope we can get out of the problem. Today I received a letter from Littlewoods Gaming Ltd, which states:

"We have been keen to maintain a constant and open dialogue with Football Data Co, the company appointed by the Leagues to represent them in this matter. Football Data Co entered into a public consultation regarding the licence payments in February of this year. As part of this consultative process we asked that Football Data Co consider equitable treatment of football pools and bookmaking. We advised Football Data Co in writing (August 2004) that if a commercially acceptable agreement could be reached, Littlewoods Football Pools would pay any agreed level of monies in connection with the 2004/5 season effective from the beginning of the season."

It is important to put those words on the record to underline the fact that although people have been concerned that we are trying to deal with a private dispute, we are talking about the commitment of one football pools company to pay back the money that football clubs thought they were due this season. It would be useful to know the attitude of other pools companies in that respect, because it is important that the money flows in due course. If we had that guarantee, it might be possible for the minister to broker some sort of deal. I hope that she will tell us how she might go about that.

Clubs such as Ross County Football Club, which is in my neck of the woods and has been setting up a football academy and building a future on the basis of its being a strong community club, should not have to face the kind of blow that this crisis has dealt. All members know of clubs that require the sort of approach that Ross County is taking. It has been go-ahead in its attitude and has found ways to get finance to support its football academy.

The problem is that changing betting habits are reducing the amount that the football pools companies can offer. That issue has been creeping up on us for a long time. We have heard the figures about reductions in staff in the pools companies and their reduced revenue. If their revenues continue to decrease, which is entirely possible, we will have to find some other method to recompense the football clubs that relied on the money. Can the minister assure us that there will be a means by which to intervene at an early stage to ensure that the cash flow continues and that the other pools companies are prepared to make back payments when the problem is resolved?

Photo of Alex Fergusson Alex Fergusson Conservative 5:45 pm, 17th November 2004

Like other members, I congratulate Roseanna Cunningham on securing the debate on her motion, to which I was happy to attach my signature. She and Christine May both spoke about the fact that people often remember football clubs because they heard their names being read out during the results. It is funny that Christine May mentioned Cowdenbeath in that regard because I have, as long as the two teams have been in the same league, always tried to ensure that I catch the result of any match between Stranraer and Cowdenbeath. Sadly, when I first started doing that—I fear that it must have been on the home service, because I am sure that I am older than Christine May—the score was nearly always Stranraer 0, Cowdenbeath 0. However, if there happened to be a goal, it usually ensured that one or other of those clubs got out of their position at the bottom of the league. I was interested in those two clubs because I was at school near Cowdenbeath and was born in Stranraer. Times have changed, and Stranraer is now doing extraordinarily well.

Andrew Welsh was quite right when he spoke about the importance of a club to its community. It is notable that, on the back of the success of its football club, Stranraer is bursting with pride, enthusiasm and a renewed sense of confidence. The letter that I received from that club's secretary—I am sure that Christine May and everyone else received it as well—stresses what £20,000 means to the community that the club represents.

I recognise the problems of the pools companies, to which everyone has referred, and I can understand their desire to renegotiate. However, I have to say that I am concerned about the procedures and tactics that are being employed. The reasons for those tactics being used were put extraordinarily well by Michael Matheson. The language that has been used is confrontational and aggravating—it is as if a challenge has been issued to the clubs to take the pools companies to court if they do not like the situation. Of course the smaller football clubs—and, these days, probably the bigger ones—simply cannot afford to do that.

The correct way to renegotiate is to do just that: to negotiate again around a table over a set period of time while current agreements continue. The incorrect way is to hold a £20,000 double-barrelled shotgun to the heads of clubs such as Stranraer. The size of the club is unimportant; that is a big weapon to hold against them. I hope genuinely that all parties in the dispute can get around the table and that the pools companies can reconsider the tactics that they have used as a result of their understandable desire to renegotiate.

Finally, I hope that, after this debate, the minister will do everything that she can to bring about an acceptable solution for all the parties.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party 5:48 pm, 17th November 2004

I am no longer a weekly attender of football matches. When I was, the highlight was when I saw Dundee—that was in the days when there was really only one professional club of any importance in the city—win the league championship. I apologise to Roseanna Cunningham for the fact that, in doing so, they beat St Johnstone and relegated that team to the second division.

Roseanna Cunningham is right about the competition that exists in relation to lottery funding. Since many of us have gone down memory lane, I will say that I remember certain adverts on the sides of buses—actually I think that it was trams—

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

No, they were not. The adverts trumpeted the advantage of investing in the pools, which seemed to be that people could win something like a five-figure sum. The irony, of course, is that, although people can now win seven or eight-figure sums on the lottery, less money goes to the clubs than when the pools gave out five-figure prizes.

We should recognise, as Michael Matheson noted, that small football clubs in particular are exemplars for their community and help to get young people involved in sport and football. That is important at a time when the Executive and the Parliament want to encourage people—for all sorts of reasons, such as the effect on their health—to become fitter and start being engaged in sport.

As Andrew Welsh said, football clubs play an important role in the local economy as purchasers of goods and services. Alex Fergusson mentioned the example of Stranraer Football Club, which is currently top of the second division. Stranraer and all the other small clubs that have been mentioned perform miracles every week. I think that that club has gates of around 500 or 600 at home games. For away games—this applies to Ross County and Stranraer—clubs have to travel vast distances. Second division clubs such as Stranraer have to travel to places such as Berwick and Forfar. In fact, I last saw Stranraer at Station park in Forfar. They have to travel from areas in which transport links are not brilliant. Alex Fergusson and I have raised that matter many times.

As other members have said, we are talking about clubs that are very much community clubs. Christine May pointed out that the clubs depend very much on local fundraising, which they do successfully. They are a far cry from the plc status and image of clubs such as Rangers and Celtic. Even to balance their books each year, the clubs hope that they will either get a good run in the Scottish cup or that they will have a player who is good enough to sell at the end of the year. The pools contribution has therefore been vital to their finances.

In conclusion, I reiterate what Christine May said. I urge the ministers here and south of the border—it is clear that English clubs are involved, because they are either in the Scottish league or in the English league—to use their good offices to try to reach a solution to such an important problem.

Photo of Mike Watson Mike Watson Independent 5:51 pm, 17th November 2004

I declare an interest. I am a director of Dundee United Football Club. I will say no more on that subject or on that city in reply to what Alasdair Morgan said, other than that he must be even older than he looks.

I was interested in Christine May's reference to East Fife Football Club and the pools companies. I remember being told as a very young boy that the results announcer's absolute nightmare is apparently having to say, "East Fife 5, Forfar 4", which happened at one time. I hope that that never happens again for the announcer's sake.

I would like to speak a bit about Queen's Park Football Club, which is in my constituency. The club was formed in 1867, no less, and is Scotland's oldest football club. I have received communications from the club, as other members have received communications. David Gordon, who is the chairman, wrote to me in similar terms to those in the communications that other members have received.

One problem that has not been referred to so far in respect of fall-out if the pools companies are allowed to get away with ceasing what I regard as the fair dues of football clubs is that some of that money could be lost for ever. I have been told that there seems to be a tendency for pools companies to look to the English Football Conference League, which is the league just below the lowest Football League division. That league seems to be receiving more pools coverage than it has ever received previously, and that could be happening at the expense of Scottish clubs in the long term, which would be damaging.

Some £20,000 a year is a lot for a Scottish Football League club, particularly for clubs that are not full time. As almost every member who has spoken has said, each and every club is a community club, and it would be a grave loss to their community if they slipped under.

The ghost of a previous football league club ground—Cathkin park, which is where Third Lanark Football Club played—is close to the national stadium at Hampden, where Queen's Park play their games. Third Lanark went bankrupt and slipped out of existence in 1967. I still meet people in the community who say to me that they have never been to a senior football match since Third Lanark collapsed. They say, "I can't bring myself to watch anybody else—Third Lanark was my club." That is the way things are in football—people cannot transfer their allegiances.

There is more input to football than simply attending matches. People in the lower league clubs tend to do a lot for them, apart from simply turning up on a Saturday. If that is lost, a lot will be lost in the community. The youth input will also be lost.

David Gordon drew my attention to the fact—which I was well aware of, as many people are—that Queen's Park is, and always has been, an amateur club. The club's players are not paid for turning out. Often, the honour of playing for the club at Hampden is sufficient to attract players to Queen's Park. Of course, Queen's Park has an excellent coaching record and produces many players who go on to play at a higher level.

Mr Gordon said to me that, typically, football clubs'

"variable expenses can be flexed to cope with reductions in variable income."

Of course, if there are no players' salaries as one of the variable costs, that will severely restrict clubs such as Queen's Park even more. Mr Gordon said that if those variable costs include, for example,

"things like the costs of running youth teams (pitches, travel, kit, opposition hospitality, coach development, player admin/registration, etc)", the potential for making savings in those areas rather than in respect of the senior team is serious.

I want to make one further comment in relation to the role of the Scottish Executive. Of course gambling is a reserved issue: no one is in any doubt about that. However, I wrote to the minister on the issue two or three weeks ago, as I believe that she has a role to play through her relationship with Tessa Jowell, the Secretary of State for Culture, Media and Sport. With all due respect to her, Tessa Jowell will know little about Scottish football and will not be able to say in which towns or cities Albion Rovers, Raith Rovers, Queen of the South or Queen's Park have their home grounds. It is important, and MPs have also written to her on the matter.

The pools companies need to be told that they have to take a responsible attitude to this. If there is a difficulty with some bookmakers, we should get that sorted out. The minister—certainly at Westminster—needs to bang a few heads together and say that there are broader issues to be addressed. I hope that this debate and the message that Patricia Ferguson can take to Westminster will help all Scottish Football League clubs to secure their future.

Photo of Patricia Ferguson Patricia Ferguson Labour 5:55 pm, 17th November 2004

I, too, congratulate Roseanna Cunningham on securing this evening's debate on an issue that is crucial to the Scottish Football League and its member clubs.

The Executive is committed to working in partnership with the football authorities to ensure a prosperous future for Scottish football. Implementation of the action plan for youth football will ensure that more young people come into the game, which can only benefit clubs in the SFL—a point that was recognised by John Swinburne. The decision of the pools companies to stop payments to the SFL for use of the fixture list will have an impact on the SFL. Their decision is regrettable and I urge them to reconsider such drastic action. The SFL is not the only league to be affected by the decision, but the financial consequences here are possibly the most severe. To a club in the premiership in England, £20,000 may be little more than pocket change, but to the team that I support—Partick Thistle—and smaller clubs, such as East Stirlingshire, £20,000 can, as members have said, help to balance the books.

It is important that we understand the issue that is under discussion. The pools companies have been long-standing supporters of Scottish football for more than 40 years. As Roseanna Cunningham said, since 1959 they have made copyright payments to Scottish football for the rights to use the fixture lists. Similar payments have been made in respect of fixtures in the English leagues. In May 2004, the contract with the pools companies expired and the pools companies wanted to introduce a different formula for calculating the copyright payments, which would reduce their annual payments to the SFL from around £20,000 to £1,000 per annum for each club. The SFL and others have been in negotiation with the pools companies but, to date, no agreement has been reached. I sincerely hope that negotiations can continue and that we will see a resolution to the situation that is acceptable to both sides.

It is important to recognise the fact that the negotiation is purely commercial and that it would not be appropriate for the Executive to seek to intervene, especially as neither party has approached us to do that. The pools companies have taken a commercial decision in the interests of their shareholders—a decision that has been repeated in a number of countries across the European Union. Like any commercial organisation, the pools companies want to adapt to the climate in which they operate. However, it is the responsibility of those companies to work out with football what their relationship should be. Inevitably, from time to time there will be pressures that the companies and football will have to face up to. Although I have every sympathy with the SFL in this matter, it has to make a judgment about how it should best respond. If it takes the view that its legal rights have been infringed, it has the right to take court action. In making that decision, it will—as members have mentioned—have to weigh up the chances of success against the cost, which will no doubt be considerable. Given recent developments in the European Court of Justice, court action may be a lengthy process. That is why I hope that a resolution that is acceptable to both sides can be found quickly through negotiation.

Over the years, the pools companies have done good work in supporting good causes, especially football. However, overall, good causes in Scotland have benefited by almost £1.4 billion over 23,000 projects in the 10 years since the introduction of the UK national lottery in 1994. Football has also benefited greatly through the £126 million that has been invested in more than 2,700 sports projects in that period.

It is also important to see this issue in the context of the support that the Executive is offering to football. We are supporting the development of the game at youth level and the Executive is fully behind the Scottish Football Association in its implementation of the action plan for youth football.

Photo of John Swinburne John Swinburne SSCUP

Last week, we spoke in the chamber about banning smoking. In the centre of a football field is a circle with a line across it. The Executive spent £14 million through advertising companies to put anti-smoking advertising on television. It could replace the money that we are not getting from the pools companies by buying that space from every club in the country for a nominal amount and putting in it an advert of a cigarette in a red circle with a diagonal line through it. It would be subliminal advertising.

Photo of Patricia Ferguson Patricia Ferguson Labour

That is a very interesting idea. As someone who advertises herself at Firhill, I will pass on the idea to my colleagues who are responsible for that aspect of the Executive's programme.

We need to encourage more young people to come into the sport. A wider playing base and a single unified strategy with more and better coaching should bring more young people through the system. That can only benefit clubs at all levels in Scotland.

Clubs in the SFL can also benefit through the action plan by becoming accredited clubs in the youth initiative programme. They can also become truly community clubs by enhancing the work that they already do and by working with other local clubs in offering young footballers clear pathways to fulfilling their potential. I look forward to seeing that plan being put into action.

The Parliament is also playing its role. The Enterprise and Culture Committee has initiated a report on the financial information that is available to Scottish football and what contribution the Executive and others can usefully make. I understand that the report has been slightly delayed, but I am more than happy to assist with the investigation and I look forward to meeting Richard Baker to discuss the investigation in more detail.

Photo of Alex Fergusson Alex Fergusson Conservative

With great respect, I cannot help but feel that the minister is slightly sidestepping the nub of the debate in listing the worthy aspirations of the Executive. She said that it might be helpful if any of the parties involved approached the Executive with a view to getting involved. If any of those parties did that, would the Executive get involved in trying to bring about a negotiated settlement?

Photo of Patricia Ferguson Patricia Ferguson Labour

I made the point that a commercial negotiation is going on and that, to date, neither of the parties involved has asked the Executive to do that. The SFL has engaged the services of Football Dataco Ltd, and that is where the negotiation currently lies. It would probably not be particularly helpful if the Executive tried to intervene, but there might be other ways in which we can help, and I will mention those shortly.

One area where I am delighted that the Executive has made a telling contribution is in helping to establish Supporters Direct in Scotland. As Christine May mentioned, that is a very important way forward for football. It has allowed a significant number of supporters trusts to be set up. It is a well-worn statement, but supporters are the lifeblood of the game. They invest a significant amount of emotional and financial support in their club. Recognition and acceptance of supporters trusts can offer many of the clubs in the SFL a sustainable future.

I welcome the many contributions made tonight and I am more than happy to speak to my Westminster colleagues about any additional help that we might be able to offer.

Photo of Jamie McGrigor Jamie McGrigor Conservative

When the minister is speaking to her Westminster colleagues, will she bring up the point that the water has been further clouded by the Competition Commission, which is totally against the type of fixed-price scheme that the bookmakers have been using up to now?

Photo of Patricia Ferguson Patricia Ferguson Labour

The problem might be even more deep-rooted than that because it all comes back to what is negotiated on copyright and European judgments that have been made about this matter. This is not just happening in this country; it is happening in other European countries.

Across the board, I am happy with the support that the Executive provides to football. We can never do enough, but what we are doing is right and is appropriately targeted. I understand that the situation represents a setback for Scottish football and I sincerely hope that that setback will be overcome and that the implementation of the action plan for youth football will also help to secure a prosperous future for football in Scotland.

I have no doubt that this debate, which Roseanna Cunningham secured and in which many members have spoken eloquently and with passion, not only about their own football clubs but about football in Scotland more generally, will have helped to focus the minds of the parties who are involved in the dispute. I sincerely hope that both parties come to a helpful resolution in the near future.

Meeting closed at 18:05.