Broken Dreams

by Tom Bower

  To implement the plan, Bates flew with Papi to Guernsey. Sitting in the office of Patrick Marrin, an accountant, the two visitors watched the unfolding of a paper trail between banks and lawyers, prompted each time by Bates signing a succession of forms. By the completion of that circle, Chelsea Village became the CFAC’s preferred creditor and the Royal Bank of Scotland possessed a secure debt in Chelsea Village rather than an unsecured debt with CFAC. On his return to London, Bates had secured possession of Chelsea free from the threat of insolvency, which he and the Royal Bank of Scotland stood to gain at the expense of the other creditors. To complete the process, the revenue of Chelsea’s season tickets that year was not deposited in the old company’s (CFAC) account. In June, Papi transferred CFAC’s remaining assets of £620,000 to Chelsea Village, leaving debts of £418,000 owed by CFAC. The new company’s shares were owned by anonymous trusts registered in Marrin’s office, most notably, a 60 per cent stake owned by Swan Management, reputedly a vehicle of Stanley Tollman. Seven weeks later, unaware of those transactions, Maybanks, the printers, issued a formal winding up order of CFAC.

  In May 1993, Chelsea Village, acting as the debenture holder of CFAC’s assets, appointed John Papi as the receiver of CFAC. Formally, John Papi announced that CFAC ‘had no option but to cease trading’ and the company was placed into receivership. CFAC, disclosed Papi, owed Chelsea Village just over £1 million. On 30 June 1993, at a meeting of CFAC’s creditors at the Sheraton Park Tower in Knightsbridge, Papi said, ‘the company has a £2.4 million “black hole”. There are not enough assets to cover the amounts owed.’ CFAC was wound up. The club’s creditors were outraged that Papi’s liquidation had favoured Bates and appeared to discriminate against themselves. Papi did not recall Bates showing undue concern for their plight.

  In late 1993, the creditors, bewildered by Bates’s dealings, appealed to the FA to investigate Chelsea’s unorthodox finances. The FA retained Christopher Morris of Touche Ross to examine the transactions. To his surprise, Morris received specific help from the Inland Revenue and Customs and Excise but, during the first months of 1994, he grew frustrated by the lack of cooperation and the absence of any documents. The official receiver was also perplexed. On 16 May 1994, the receiver also retained Christopher Morris to undertake a formal investigation. For the third time, an insolvency linked with Bates was under official scrutiny. Immediately, Morris dispatched Paul Mather to the Chelsea stadium to search for documents. ‘They’re all in that container,’ shouted Bates, cheerfully pointing at the metal box. ‘Help yourself.’ Bates felt no fear. Six weeks later, in an application to the High Court, he won an order to halt Touche Ross’s investigation. The court judged that John Papi’s scheme had been legitimate but secured from Bates a guarantee that all the creditors would be paid. Christopher Morris hailed that assurance and the subsequent payments as his victory.

  After defeating the Inland Revenue and Touche Ross, Bates faced one last hurdle. Mark Day, the FA’s finance director, ‘had a feeling that things were not quite as they should be’ and probed Bates’s takeover of Chelsea. Bates’s response, disputing Day’s authority, was brutal. Handicapped by minimal powers, Day was outwitted, not least because Bates, as a member of the FA’s executive committee, had the right of access to his own files. Bates Day discovered had no hesitation in exploiting that to his own advantage. Day received no support from Graham Kelly or his other colleagues; his superiors pleaded impotence towards the controversial owner of a football club.

  Bates was victorious and again won the gratitude of the fans. John Papi, the anti-hero of the operation, was less fortunate. Outraged by the insolvency expert’s behaviour, Christopher Morris complained to the DTI and the Insolvency Practitioners’ Association about Papi’s ‘gross professional misconduct’. In 1994, Papi’s licence was withdrawn and four years later he was jailed for cheating the Inland Revenue. Papi had hoped that his payment for saving Chelsea from extinction would be ‘Mandalay’, Bates’s house with 40 acres near Beaconsfield. Bates disputed their agreement and refused to meet again. ‘You are unreliable and a fantasist,’ Bates told Papi, whom he blamed for failing to maintain an efficient operation.

  Now in his sixties, Bates had achieved a dream: fame. Unencumbered by other directors, shareholders and claimants, he could cast his eyes over the assembled hordes at Stamford Bridge on match days and sense the thrill of the emperors at the Colosseum in Rome. The roar of the crowd, the emotion and the sense of control fed his egoism. ‘I’m doing what all the bloody moaners would like to do – I’m the chairman. A supporter’s dream is to own a football club. Chelsea is the ultimate.’ Unlike so many, his bid for stardom could be satisfied. ‘The Romans,’ he liked to say, ‘didn’t build a great empire by organizing meetings. They did it by killing anyone that got in their way.’

  Bates’s brash behaviour, until then familiar to a few, became his trademark; journalists were invited to his office to observe his bombastic telephone calls. His aggression was judged by many to be caused by insecurity, the fear that he might lose the club. Bates’s private life reflected that turmoil; his marriage to Theresa, with five children, had collapsed after she discovered his affair with Pam, a model. He moved to Chelsea Wharf and began a relationship with a journalist. His personal life reflected his desperate haste. Conscious of his age and yearning to be crowned by public acclaim before he died, he launched what he called ‘a dash for growth’, hampered only by his limited wealth. His timing was fortunate; football had entered a glorious decade. The contracts with the television corporations were transforming football into a billion-pound business. Bates, like many other club chairmen, managers, players and agents, had good reason to be excited. By 1997 his investment had pushed his team to rank among the Big Five, a stunning achievement. Bates’s exuberance and success, however, alarmed football’s traditional fans, especially among the supporters of New Labour.

  5

  THE PASSING PURIST: ALASTAIR CAMPBELL

  Alastair Campbell, the new prime minister’s official spokesman, appeared agitated. The mood in the Cabinet room on 23 July 1997, nearly three months after New Labour’s election victory, was unharmonious. Football was the topic, Campbell’s passion. In opposition, New Labour had, partly under his guidance, proposed radical new policies. Influenced by the accusation of corruption against Bruce Grobbelaar, the goalkeeper, the Labour party was committed to imposing an independent regulator on football. The policy was supported by Tony Banks, the unexpected appointee as the sports minister who, like Campbell, also appeared to be irritated at that meeting. Across the table, Tony Blair was noticeably bewildered.

  Banks, a vocal south Londoner, was complaining about a telephone call from a civil servant in Downing Street. In an imperious tone the official had rejected Banks’s suggestion that David Mellor, the former Conservative minister, should be appointed as the chairman of the new Football Task Force. Banks, a reformed far left politician, disliked these Whitehall messengers. Initially, he believed that Alastair Campbell had opposed Mellor’s appointment but he had been mistaken; although Campbell was ambivalent about whether the humiliated Tory was an ideal choice to implement his own idea of the Football Task Force. ‘Don’t people really hate David Mellor?’ Blair asked James Purnell, the young special adviser, a protégé of John Birt at the BBC, and another football fan. ‘He’s the sort of person people like to hate,’ agreed Purnell, who favoured the populist Tory rather than a tribal Labour appointee. Decisively, Purnell was supported by Angus Lapsely, the only civil servant in the room. ‘Then Mellor’s OK for me,’ declared Blair. Campbell shrugged in agreement. At least the discredited Tory would be grateful for his reacceptance within the political establishment. Alastair Campbell would allow Mellor to believe that the appointment was his idea. The apparent favour would induce Mellor’s gratitude.

  Pertinently, Mellor shared the anger of all those in the Cabinet room that football, like politics, was mired in sleaze. Headline stories about match-fixing, agent’s bungs
, profiteering and dishonest managers were, he believed, just the tip of the iceberg. Mellor also agreed with his Labour opponents that their beloved game faced a greater danger. Money was replacing sentiment as the reason to own a football club. The Task Force was football’s last chance of salvation.

  The rules to protect and keep football clubs as a focus of local communities had been eroded. To safeguard football from financial predators, the FA had restricted clubs until 1981 from paying shareholders more than a 5 per cent dividend of the nominal value of the shares. That rule was deliberately undermined by clubs altering their legal ownership. Rule 34 of the FA’s regulations forbidding directors to profit personally from the sale of club assets had been abandoned. Clubs could be sold to the highest bidder. Astute chairmen had, after secretly accumulating shares bought a generation earlier by loyal fans and retained by ignorant widows, floated their clubs for enormous profits. The Edwards family had spent between £31,000 and £41,000 to purchase 54 per cent of Manchester United’s shares, and approximately £500,000 for a further 20 per cent. After the flotation in 1991, the club was valued at £429 million. Martin Edwards earned £33 million on the shares he sold and he still retained a 15 per cent stake. Sir John Hall, the chairman of Newcastle United, invested about £2 million for a 48 per cent stake, which was valued on flotation at £102 million. Peter Johnson, a Merseyside businessman, paid £20 million for a 66 per cent stake in Everton, which was worth £70 million. Doug Ellis bought 47 per cent of Aston Villa for £425,000 which, on flotation, was worth £42 million. The growing outcry by football’s purists towards the windfalls – ‘Football is a working man’s game,’ they protested – was aggravated by the revelation in 1996 that Sky’s annual profits from 6 million subscribers had reached £374 million.

  Convinced that they would receive further hundreds of millions of pounds when the next contract was negotiated in 1997, the club chairmen spoke of an opportunity for permanent change. Sentiment about the past was dismissed as an irritant. That brashness was provocative. The critics, especially articulate, educated, left-wing fans speaking on behalf of football’s traditional roots in the community, complained that the new money-oriented owners were ignoring the emotional investment by poor fans in their local clubs. The slaughter of spectators at Hillsborough and Bradford had inflamed their anger against the Football Association and the clubs’ chairmen. Eight reports on safety, the critics complained, had been ignored by the game’s complacent owners. In the traditionalists’ opinion, no one at the FA or in Westminster appeared to be concerned by football’s mediocre leadership and flawed governance. Their fears were echoed by Lord Taylor in his landmark report in 1990 following the ninety-six deaths at Hillsborough: ‘The picture revealed is of a general malaise or blight over the game due to a number of factors. Principally these are: old grounds, poor facilities, hooliganism, excessive drinking and poor leadership.’ Lord Taylor blamed the same chairmen for eagerly maximizing their profits. ‘It is legitimate to wonder,’ he speculated, ‘whether the directors are genuinely interested in the welfare of their grass roots supporters. Boardroom struggles for power, wheeler-dealing in the buying and selling of shares and indeed whole clubs sometimes suggest that those involved are more interested in the personal financial benefits or social status of being a director than of directing the club in the interests of its supporter customers.’

  Taylor’s criticisms had stimulated major reforms. The financial investment in new stadiums was applauded, but the projected prices of tickets were condemned as evidence of the chairmen’s selfish promotion of football as show business. The debate between the chairmen and supporters was no longer confined to hooliganism but encompassed the soul of football.

  David Mellor supported Alastair Campbell’s ambition to redress the balance between the money-men and the fans, and impose an independent regulator on the game’s managers. Only Campbell, a supporter of Burnley, and Purnell, an Arsenal fan, understood an exquisite irony. Both Tony Banks and Mellor were passionate Chelsea supporters and personal friends of Ken Bates, a chairman accused of several of the sins to be investigated. Neither was embarrassed by their friend, who opposed any regulation to cure the sport’s diseases.

  To ensure that the Task Force’s birth was properly promoted Campbell planned to announce its creation in a briefing to a chosen Mirror journalist. He would also mention that Alex Ferguson, the manager of Manchester United and a godfather of football, had agreed to join the crusade to reform the sport. ‘He can make things happen,’ Alastair Campbell acknowledged about a hero noted for his ferocious temper, ambition and enmities. Alex Ferguson’s prompt refusal to participate was not the only disappointment. The Task Force’s budget was just £100,000, derisively insufficient to research and produce authoritative plans to compel the clubs to combat racism, improve access for the disabled, negotiate lower ticket prices and impose greater supporter involvement. Those complications were hidden from the public when Tony Banks and David Mellor posed on the pitch of The Valley (Charlton Athletic’s home in south London) to publicize the new Task Force and their determination to clean up the game. Charlton was symbolic of football’s crisis. During the 1980s the club had been declared bankrupt and was compelled to abandon its ground. Under the guidance of Richard Murray, its sober chairman, the club had been rebuilt with a supporters’ representative on the board and, with new finance, had rebuilt its stadium to celebrate promotion to the Premier League.

  That morning, David Mellor was openly emotional about the declining morality of the sport. In the 1960s, he fondly recalled, the players travelled to matches with the fans on Corporation buses. Now, they swept gracelessly into the grounds driving the latest Ferrari. The symbolism of uncontrolled fortunes contaminated the game. ‘I feel frustrated that there’s no desire to clean up football,’ he emphasized in his unequivocal manner. ‘The FA and the Premier League are in a position to do something and have the responsibility. But they’re just too pleased with themselves. Unjustifiably pleased.’

  The raw statistics confirmed to the architects of the Task Force a business unable to control its costs or its behaviour. Sky had agreed in 1997 to pay the Premier League £743 million for a four year agreement, a spectacular amount which would inevitably transform English football. In the previous year, wages had increased by 30 per cent – the average annual wage of a Premier League player was £550,000 – and the tabloid newspapers were reporting the familiar aggression, drunkenness and extraordinary excesses of stars only recently emerged from adolescence. To the loyalists, the Task Force was the last chance to save football from self-destruction.

  ‘Everything depends on Number 10,’ Banks told Mellor; adding rhetorically, ‘But have they got the courage? Taking on football is a big deal.’ In the years before the general election, Alastair Campbell and Labour politicians had discussed a Task Force to reverse the deliberate alienation of sport’s traditional supporters by clubs maximizing their profits on tickets and merchandise. Both the FA and Premier League executives were criticized for ignoring democracy and compelling the alienated fans ‘to pay through the nose’. Controlling the greed of managers, agents and players would be a crusade. ‘Has Downing Street got the stomach to make it a priority?’ wondered Banks. ‘I’m not sure.’

  Mellor cast aside those doubts after Alastair Campbell telephoned from his summer holiday. ‘The fans want ownership of the game . . . . We’re right behind the fans’ complaints about how the game is run,’ said Campbell, emphasizing his personal interest in the Task Force’s success. Nothing, it seemed, was too radical for Campbell; personally and politically he saw the potential to slay dragons. New Labour would win the support of hundreds of thousands of football fans. The publicity would be invaluable. His object was not to resuscitate old sentiments but to challenge the game’s ownership, most significantly, by an independent regulator. Football would be brought under control.

  Alastair Campbell’s arrival at the first meeting of the Task Force in Mellor’s home in St Kathar
ine’s Dock by the River Thames on 2 September 1997 reinforced that conviction, although the first fissure had appeared. Racism and access for the disabled were easy topics to examine, but Adam Brown, a left-wing academic critical of the commercialization of football, mentioned the fans’ desire for the return of terraces. ‘That isn’t part of the government’s thinking,’ said Campbell, sensitive to the political obstacles. There was no time for Mellor to close the gap. ‘I’ve got to go,’ Campbell announced. ‘I’ve got a funeral to organize.’ Princess Diana had just died.

  Campbell left behind a group united in changing the status quo but divided about the cure. Could the ‘core sporting character’ of football club companies be protected, asked Mellor, or was football ‘a speculative entertainment business run for financial gain’? David Dein, Ken Bates and the other Premier League chairmen were determined to reinforce the power of the richest clubs. Adam Brown and his supporters wanted the opposite.

  Some in Mellor’s camp were doubtful. His outspoken opinions on Radio 5 and in his newspaper column aroused some loathing. ‘A problematic grandee,’ concluded Adam Brown. After that evening, some inside Downing Street were also puzzled. Mellor was entertaining those people he assumed to be the powerbrokers for breakfast at the Ritz. To his new friends, he appeared desperate to be liked and was possibly even hoping for a peerage. In Mellor’s own opinion, he was seeking to negotiate unanimity among the rival interests. He was hampered by his reluctant reliance on Tom Pendry, a disgruntled Labour MP.

  Tom Pendry was a 63-year-old former trade union official and had been an MP since 1970. His passion was sport, first as a champion boxer and then as a football supporter. His friends called him ‘vain but lovable’ and applauded his appointment in 1992 as Labour’s shadow sports minister. ‘You deserve it,’ said John Smith, the party leader. Two years later, Tony Blair reconfirmed Pendry’s appointment. Pendry believed that Labour’s new leader owed him some gratitude. In 1982 Pendry had arranged Blair’s candidacy in an important by-election in Beaconsfield. But their relationship became tarnished after Blair’s election as party leader. Blair’s first speech on sport had been written by Alastair Campbell without consulting Pendry, and the older politician had lambasted the newcomer from Fleet Street. Thereafter, Campbell was cool towards Pendry as he fashioned New Labour’s policy towards football. The legacy of that argument threatened the Task Force with fatal consequences.