by Tom Bower
The changing sentiment was influenced by the repeated refusal of Adam Crozier to deliver signed contracts committing the FA to using Wembley, its own project. Without those agreements Wembley was not guaranteed an income and the banks were unwilling to loan money on realistic terms. ‘Crozier’s excuse,’ complained Bates, ‘was that the agreements were delayed by the lawyers.’ Some politicians were delighted by Bates’s failures but the responsibility was Adam Crozier’s and the FA’s. Repeatedly, the directors of the project ignored warnings from Tropus, hired as project managers, about ‘irregularities’. ‘The Wembley fiasco wouldn’t be happening,’ Kate Hoey told the prime minister, ‘if we hadn’t bid for the World Cup.’ The FA had become entangled in another problem of its own making.
Labour’s manifesto in 1997 had committed the government to support the FA’s bid to host the World Cup in 2006. Two years later, seventeen full-time staff and an international manager on secondment from the Foreign Office were helping Tony Banks, Alec McGivan and England’s football stars to visit over twenty countries, some more than once. Bobby Charlton and Geoff Hurst were paid £300,000 and £200,000 each as retainers, plus fees and expenses for each foreign visit. In 1999, FIFA executives and members of their technical committee were welcomed to England in ostentatious style. Housed in five-star hotels, they were taken on shopping trips, visits to the theatre and entertained at Hampton Court before meeting Tony Blair and the Prince of Wales. The prime minister was always available for important photo-calls. The financial investment was substantial, provoking internecine bickering.
Kate Hoey was a principal opponent, who believed that Bert Millichip had undertaken not to bid for the World Cup and recoiled about public money being wasted on hype, receptions for foreign delegations, vast expenses spent by Tony ‘the minister of tickets’ Banks, and government planes and helicopters. Her anger spilt over into apparent sabotage. Ignoring Downing Street’s authorization, she refused to sign letters to the Ministry of Defence requesting the aircraft. Livid that Alec McGivan appeared to have direct access to Downing Street, she sniped to the Evening Standard of London, ‘McGivan is treated like God.’ Everything Kate Hoey was told by Banks appeared to be reported in the Daily Telegraph. Chris Smith, she alleged, was ‘bending the rules’ in negotiations with hotels. ‘I just resented the way we seemed to be lowering the standards while Chris Smith didn’t want to challenge things that were wrong,’ Hoey complained. ‘He always looked for the easy way out.’ Her invective sparked retaliation. Chris Smith telephoned and demanded an apology to McGivan. James Purnell criticized Kate Hoey as ‘unhelpful’. Banks criticized her as ‘disloyal’. The personal antagonism was mutual. Kate Hoey’s opposition to the bid was not unique. Many in England believed Germany’s version, rather than Bert Millichip’s, of his conversation in 1993 in Las Vegas.
Although in public Alec McGivan had no choice but to support Millichip’s version that there was no deal at Las Vegas, in private he seemed less certain telling Jo Gibbons, his press officer, ‘there could have been a deal but there’s nothing on the record’. The pretence was self-defeating. ‘It’s an albatross which will not go away,’ complained Tony Banks in private about the ‘conversation’. Banks’s limitations as a special envoy had also become apparent – the socialist resented the process of lobbying powerbrokers at FIFA. ‘It’s a gentlemen’s club,’ he scorned. ‘So many people in football loathe each other but smile and kiss when they meet. They know how to behave in public and how to conceal their hatred.’ Banks, accustomed to Westminster intrigue, was especially disdainful of Franz Beckenbauer, the smooth-talking German champion who applauded capitalism. Sophisticated foreign sportsmen appeared to be anathema to English socialists. Banks also resented the FA, which he discovered was staffed by unlovable and pompous officials excluded from the centres of power in the international game.
The disappearance of Graham Kelly, whose shy manner was a nuisance to the bid, had been blessed as an advantage by Tony Banks and Alec McGivan, but both similarly lacked the experience to broker international deals. McGivan, a Labour supporter but ‘not a heavy hitter’, was unfamiliar with the politics of international football. Bereft of personal relationships with foreign football associations, the director of the bid focused on individual FIFA representatives, oblivious to the influence exercised in those countries by government ministers and the leaders of the national football organizations. While praised by his detractors for organizing the nameplates and serviettes at the grand dinners, McGivan was criticized for lacking an overall strategy. Haplessly he and Banks watched South Africa secure Latin America’s support while Germany negotiated Asia’s votes. ‘We haven’t got enough cards in our hand,’ lamented Banks, blaming the FA’s ‘lack of clout’ on England’s refusal to bribe like some other countries. ‘We are unwilling to be corrupt,’ he announced proudly. ‘We are too accountable for rules and unwilling to put women and cash into delegates’ rooms.’ Yet the notion that English, unlike European, football was clean ignored the evidence that the transfers of some players in England had been accompanied by ‘bungs’ and that Graham Kelly had been recently dismissed for the secret inducement offered to the Welsh FA. Consistent with that self-delusion, the FA decided to compete with its rivals by contributing £1 million to a football training school in the Caribbean and to finance the employment of a coach and the staging of a youth tournament in Thailand. Those votes, it was hoped, would neutralize the alienation of UEFA’s delegates by England’s support for Sepp Blatter rather than Lennart Johansson during the voting for a new president of FIFA.
At the beginning of 2000, Banks, McGivan and the FA believed, despite the uncertainty of Wembley’s reconstruction, that England’s bid would be successful. Their conviction ceased on 16 June 2000 after outbreaks of hooliganism among English fans in Belgium. Six days later Banks and McGivan flew to New York to meet three FIFA members whose support was crucial. ‘England cannot win,’ they were told. During their return journey, the two men agreed to recommend that England’s bid should be withdrawn. In his presentation to the FA on 27 June 2000, Banks revealed that besides losing votes because of hooliganism, seven out of the eight European nations with votes on FIFA would support Germany’s bid. Banks’s report was contradicted by Bobby Charlton who said that withdrawal would be associated with hooliganism and would permanently scar English football. That opinion was endorsed by Adam Crozier. ‘We want to carry on,’ David Davies told Banks. The FA still believed that England enjoyed more support than Germany. Banks was incredulous. The FA’s leaders were truly pitiful and deluded; the managers of English football were their own worst enemies.
Hours later, Banks appealed personally to Blair in his private office at the House of Commons. ‘We’ve got no chance,’ he urged. ‘Even if it’s a manifesto commitment we’ve got to withdraw the bid.’ It was agreed that Banks would again urge the FA to withdraw. Adam Crozier and the FA again refused. Loyally, Banks agreed to continue the battle on the FA’s behalf.
All the weaknesses of English football coalesced in that decision and its implementation. The previous criticism of Graham Kelly as naive could similarly be directed at Adam Crozier. The insularity of England’s football establishment was reconfirmed. The delusion that their failure to build one stadium at Wembley would not reflect upon their ability to organize a whole competition demonstrated their limitations. English football’s crudity was displayed in the days before FIFA’s decisive vote on 5 July 2000.
In a preliminary meeting the eight UEFA countries met in Luxembourg. After three years of ‘living and breathing the bid’, Banks argued his case gracelessly. Unless UEFA supported England, warned the politician, the World Cup would be awarded to South Africa. There was a stony silence, not least because before 1997 Banks had supported South Africa’s bid. ‘You haven’t bothered to read England’s submission,’ continued Banks. ‘You’ve got closed minds if you only bother with Germany’s bid.’ Insults might be successful in Labour party caucuses, but in Luxembou
rg Tony Banks had committed a tactical disaster. ‘That’s an insult to Germany,’ Lennart Johansson said calmly.
The English bid was resoundingly defeated yet the lesson had still not been learnt. In Zürich the following day Banks’s tactics were more unusual. He and McGivan briefed journalists that because England was promised more support than Germany, South Africa was certain to win after a split vote. In private conversations, the English lobbyists also whispered about South Africa’s perils and how football matches in the dark continent were played on mud pitches. The shock for the whisperers, just before the announcement of the final decision, was the publication of FIFA’s technical report. England’s facilities were ranked third behind Germany and South Africa. Compared to England South Africa was judged to possess superior transport, telecommunications, security and stadiums. ‘We were spitting blood about the total stitch-up,’ Banks admitted. ‘It’s a scandal,’ agreed McGivan.
Their naivety remained uncured; they retained their optimistic belief in Sepp Blatter’s assurance to support England. In the contest between Lennart Johansson and Blatter, the Swedish president of UEFA had collected the European, Gulf and some Asian votes; Blatter had secured the support of Africa and South America. England’s largesse to win Thailand’s support failed: Worawi Makudi, the Thai delegate, owned a Mercedes franchise in Bangkok and supported Germany. Sepp Blatter returned England’s support for his presidential bid by arguing South Africa’s case. England’s humiliation was complete. The truth was buried in Downing Street. ‘It was a big mistake,’ James Purnell admitted, ‘to think we could win. We did not understand the international politics of football.’
The credulousness of Purnell and Andy Burnham remained, both believed that the removal of the discredited old guard – Kelly, Wiseman and Leaver – had revolutionized English football. They thought that the replacement of the men wearing blazers by the money-men enjoying hand-to-hand combat ought to have guaranteed England’s success. Only Kate Hoey was impenitent. The distress in Downing Street, she gloated, was ‘huge’. Blair, Campbell and Purnell had been misled. Finally they understood the agenda of those involved in the FA. At last, she believed, all three would be cautious about further involvement with football. Wembley was the first casualty.
In November 2000, thirty banks rejected Ken Bates’s business plan for the new stadium. Bates’s notion that the hotel and conference facilities located in a remote industrial zone could be profitable was derided. Forlornly, Bates sought allies but discovered that he was spurned by Crozier and a chorus condemning his plans as ‘grandiose’. The mood was turning hostile. His own club’s net debts were doubling from £37.5 million to £66.9 million, with an overall debt of £140 million. Turnover had fallen by £13 million to £93.6 million, and the company’s trading losses, caused by the two unsuccessful hotels and five restaurants, were rising by £3.5 million to £11.1 million. Most damning of Bates’s commercial weaknesses was his sale of only three of the stadium’s fourteen corporate boxes, offered at £1 million per year. His dream of a profitable club was shattering. Chelsea’s share price was falling from £1.20 towards 30 pence, valuing the company at £52 million. Everything was turning sour, including the football team’s fortunes.
A damaging critic was Tropus, the project management consultant for Wembley stadium. In the consultant’s subsequent submissions to a House of Commons committee they expressed surprise that Bob Stubbs, the chief executive of WNSL, had advanced money to Multiplex, the Australian contractors, on the basis of a letter submitted on 1 September 2000 by the contractor. According to Tropus’s submission, Stubbs had ignored the legal consequences of the letter. In Tropus’s opinion, without any suggestion of illegality or impropriety, Multiplex used the letter to exploit its position and increased the cost of its work from £316 million to above £400 million. Stubbs vehemently denied those criticisms. Nevertheless, the apparent mismanagement of the project influenced the banks’ final refusal to provide any loans. Bates lost the confidence of the FA. In a bruising confrontation with Crozier and other club chairmen Bates was removed from his chairmanship of Wembley’s development company on 8 December 2000. Retreating ‘very hurt’, his humiliation was welcomed by his adversaries. ‘The FA,’ said Chris Smith, ‘made a mistake giving Wembley to Bates. There was no sense that they took a grip on what was happening.’ Kate Hoey was more damning: ‘Bates is a bully. He embarrasses people. It’s a tragedy that years have been wasted, but I know what we did was right.’ The politicians barked too quickly.
To the government’s irritation, financial experts disproved their criticism. Sir Rodney Walker, a building engineer, appointed by the FA to save Wembley’s reconstruction, endorsed Bates’s business plan as ‘largely sound if the luxury bells and whistles are removed’. Without the hotel, offices and banqueting facilities, Walker reported, the original plan was feasible. Two years later an independent quantity surveyor judged the design of the stadium to be ‘value for money’. The hiatus had been caused by Bates’s manner and his style of management. To government ministers, the confusion confirmed the FA’s incompetence and Adam Crozier corroborated their fears in his own words.
In his after-dinner speech to Lancing College old boys at a London hotel in March 2001, Crozier attacked greedy agents, insolvent clubs and a culture of ‘fear, suspicion and mistrust’ inside the FA. His inheritance from Kelly, he said, was ‘the biggest shambles I’ve ever seen’. To avoid the blame for mistakes, he disclosed, decisions within the FA had been indefinitely delayed. The state of the English clubs was equally bad. ‘Fifty per cent of all the professional clubs in Britain,’ he revealed, ‘are technically insolvent. They are bust.’ The examples Crozier chose to demonstrate the iniquities within English football were stark. An unnamed Liverpool player had paid a fine of £80,000 in advance to Gérard Houllier to be released from training; and there was suspected corruption in Aston Villa’s purchase of Juan Pablo Angel, because only £2 million of the £9 million ($12.5 million) transfer fee was paid to his club, while the remainder was taken by agents. Crozier’s portrayal of English football was accurate, but to placate the uproar he later apologized.
There was good reason to question clubs’ finances. The dream financed by Sky had soured. English football had attracted a lot of money but also huge debts in pursuit of glory. Financial results in 2000 and forecasts for 2001 proved the precariousness of the business. While Manchester United’s shares at 400 pence each valued the company in March 2000 at £1 billion, its profits slid that year from £22.4 million to £16.7 million and the club’s value would be halved. Chelsea was valued at £413 million in 2000 on a turnover of £76.7 million with losses of £3.5 million and debts of £37.5 million. In 2001, Chelsea lost £6.83 million on falling turnover and accumulated an overall debt of £140 million. The club’s share price fell further towards 16 pence. Bates dismissed the criticism of his financial management as ‘lurid’ and ‘nonsense’ and affirmed his ‘excellent’ position, but his aggressive gloss could not impede the developing crisis.
Leeds, on a turnover of £57 million, had debts of £21 million rising to £37.5 million in 2001 and £78 million in 2002. (In September 2001, Leeds’s losses were £7.6 million on a record turnover of £86 million.) The company was valued on the stock exchange at £35 million but its players were valued at £198 million. On flotation the club’s share price was 19 pence but by mid-2002 the price had slid to 7 pence. Newcastle’s debts in 2001 rose from £46.6 million to £65.8 million and its share price fell from £1.35 in April 1997 towards 21 pence. In 2000, Liverpool spent £40 million on wages and costs on a turnover of £46.6 million. In 2001, the club spent £48.8 million from a higher turnover of £82.3 million. Charlton’s share price fell from 80 pence in 1997 towards 17 pence. Playing in Europe had become vital to the financial health of spendthrift clubs, but only the Big Five could be likely to qualify and there were no guarantees. In 1999, Manchester United earned £26 million from the European Champions League. In 2002, that income was uncertain.
Bolstered by merchandising and full attendance at its huge stadium, Manchester United could nevertheless effortlessly survive but other clubs lacked those resources. To prevent the anticipated financial crisis required common sense and leadership.
New Labour’s relationship with English football had become a liability, damaging many reputations including Chris Smith’s. Fearing his dismissal after the imminent general election, Smith seemed willing to humiliate the FA. On 24 April 2001, Adam Crozier had written to the DCMS concerning the finance of Wembley stadium suggesting a ‘partnership’ with the government. In return for guaranteeing a £30 million loan from the banks, the FA asked the government to contribute a subsidy of £150 million. Crudely, Crozier offered to keep any agreement ‘under wraps’ until after the election. The begging letter, in the opinion of those disenchanted in Whitehall, confirmed the unreliability of a relationship with the FA. A public divorce, officials calculated, could prove advantageous. To embarrass the FA, Smith’s department leaked Crozier’s letter to a newspaper at the beginning of May 2001, for publication on 6 May. That marked the end of New Labour’s love affair with football. Football, it was implicitly agreed, would no longer receive the government’s embrace. For the football business, that was a good deal; self-regulation suited the mavericks.
Two days after the Labour government’s re-election on 7 June 2001, Chris Smith and Kate Hoey were dismissed. ‘Was it Wembley?’ Hoey asked Blair on the telephone. ‘Is that the reason?’ ‘No,’ replied the prime minister. ‘It’s no reflection on the work you’ve done, Kate. I just have to make room for new people.’ Kate Hoey cried. Blair lacked the courage to be honest.
