Broken Dreams

by Tom Bower

  Protests about Sir Alex’s apparent nepotism were ignored, although Manchester United was a publicly quoted company subject to statutory regulations. The FA, Premier League and the regulators failed to query Jason Ferguson’s possible access to privileged information and ignored accusations of conflicts of interest. The complaints encouraged other sons to seek a similar advantage. Darren Dein, the son of David Dein of Arsenal, Kenneth Shepherd, the son of Freddie Shepherd of Newcastle United, Craig Allardyce, son of Sam Allardyce of Bolton, and Mark Redknapp, son of Harry Redknapp, the manager at Portsmouth, all became involved in the football business with the possibility of benefiting from privileged information.

  Denied that privileged access, Jon and Phil Smith of First Artist struggled to establish special positions in other clubs. Every three months Phil Smith telephoned Alan Curbishley at Charlton to offer First Artist as the manager’s agent. ‘We must do some business,’ said Phil. ‘Very pushy,’ said Curbishley, aware that the Smith brothers wanted to secure him as a gateway to supply players to the club, similar to the relationship First Artist had established at Crystal Palace.

  Crystal Palace, the same troubled club Jon Smith had known under Terry Venables’s management, was an incubator. In July 2000, Simon Jordan, a 32-year-old, brash self-made millionaire who sold his half share in the Pocket Phone Shop to One2One for £36.5 million, bought Crystal Palace from the administrators for £9.6 million. Known by his red suits and silver Ferrari, Jordan attracted publicity by giving Rolex watches to his players and taking his new team to a lap-dancing club in central London. The articulate new chairman did not believe ‘there is a great deal of difference between telephones and football if you approach football as a business and not as an ego trip’. In buying and selling players, he relied on First Artist. ‘I see agents as an evil curse on football,’ he pronounced in a bitter tirade. ‘They are parasites. They drive up the price of transfers and salaries, and make and break deals at will. They are duplicitous and a menace as far as I am concerned. I hate them, but it’s supply and demand. There’s a lot more money involved, so players feel more comfortable with an agent. I’m a deal-maker and always happy to reach a common ground with players but agents have shifted the balance of power, so that all the power is now with the players. Agents have also forced up the cost and price of everything, so the finances of clubs are far more precarious than is commonly realized.’

  To ease his financial burden, Jordan bought shares in First Artist worth £250,000 as ‘an investment opportunity’. With the help of Phil Smith, Crystal Palace had hired Trevor Francis, a client of First Artist, as the team manager, replacing Steve Bruce, another client of First Artist. To cement the relationships, Matthew Francis, the son of Trevor Francis, was employed by First Artist. Four Crystal Palace players were also represented by the agency. Like the Smith brothers, Jordan dismissed the notion of a conflict of interest. ‘I don’t accept that at all. It’s purely a personal investment in First Artist, nothing to do with football or Crystal Palace.’ On reflection, he admitted, ‘Clearly, it’s nice to have a rapport and relationship when some of our players are represented by them.’ The ‘rapport’ allowed Jordan to influence the agents supplying his players, which was not a handicap while negotiating the footballers’ contracts. The advantage, however, was limited. After two years, he found his ownership ‘unrewarding, disappointing and demoralizing’, not least because his annual wages bill had quadrupled from £2.5 million to £10 million.

  Crystal Palace was a small prize for Jon Smith compared with the prospect of establishing a close relationship with Chelsea. To fulfil Ken Bates’s ambitions, the London club had bought many foreign players. Twice during 2000, Gianluca Vialli, Chelsea’s Italian coach, did not field one British footballer. After Vialli’s dismissal, the agent enjoying the best relations with Claudio Ranieri, the club’s ninth head coach under Bates’s ownership, was Vincenzo Morabito. Ranieri was Morabito’s client. Over the years, Morabito had sold many players to Chelsea and Jon Smith expected First Artist to be crowned Chelsea’s favoured agent. The plan was materializing just as the fortunes of football, and especially Ken Bates’s, lurched downwards.

  In May 2002, Stanley Tollman, Ken Bates’s partner, was accused by the New York prosecutor of thirty-three separate charges of fraud and tax evasion. Since the 1980s, Tollman had allegedly presented false accounts suggesting irrecoverable losses to the banks and, in anticipation of bankruptcies, was accused of secretly transferring assets to other companies ultimately owned by Tollman. Banks in New York, which claimed to have lost $42 million, sought to seize all of Tollman’s assets. Among their targets were shares in Chelsea registered under Swan Management in Guernsey. Bates denied a financial crisis, but Chelsea’s quandary was indisputable. Swan had sold its remaining 26.3 per cent stake in the club, principally to Bates. The chairman increased his stake from 17.7 per cent (he had sold 15 per cent of his original shares since 1996 at a profit) to the maximum 29.9 per cent. The share price was 18 pence, a costly drop for those, including BSkyB, who had bought the shares two years earlier at £1.47. Bates was tarnished by the association with the two architects of Chelsea’s revival – Stanley Tollman and John Papi – who had both been accused of dishonesty involving bankruptcies, and he was under pressure to pay £7 million every year until 2007 on the £75 million Eurobond loan. For a company which consistently lost money, the burden was onerous. Chelsea could not afford new players and European clubs could not afford its rejects. The finances of the clubs were squeezed and the agents, especially Jon Smith, who had relied upon a relationship with Chelsea, were among the casualties.

  That month, May 2002, the Smith brothers were fearful of failing to produce the profits promised to the City banks which had invested in First Artist. At their offices in Wembley, Phil Smith, a robust trader who justified his frequent use of expletives as a manifestation of ‘wearing my heart on my sleeve’, was setting his staff high targets to sign new players. During their regular Monday morning conference, the young recruits claimed to have heard Phil Smith urge them to ‘get alongside the club managers’, bend the truth to obtain business and even boast that some managers required bribes. Smith would vigorously deny those claims but his aggressive demands caused several of the agency’s younger staff concern. They were especially worried that Phil Smith was expecting them to breach the FA’s code of conduct.

  Rule 12.4 of the FA’s professional code in the ‘Players’ Agents Regulations’ stated that the contract between a player and a club should explicitly identify who was paying the agent’s fee. A second rule stipulated that an agent could only be paid by one party in a transaction – either the club or the player – but not both. ‘Paying at both ends’ was forbidden.

  Two transfers completed by First Artist concerned some employees. The first involved the transfer in June 2002 of Steve Robinson, a 28-year-old midfielder, from Preston North End to Luton Town. First Artist obtained £5,000 in commission from Luton Town and subsequently asked Robinson to also pay £5,000 commission, although he only paid £1,000.

  The second transfer raising concern was Nicky Eaden’s from Barnsley to Birmingham City. Eaden, a defender, had signed a contract with First Artist in 1997. In 2000, he became a ‘free’ player under the Bosman rules. Phil Smith finalized Eaden’s employment by Birmingham City and invoiced the club on 10 July 2000 for a commission of £50,000. Eight weeks later, after the contract was finalized and the club had paid the commission, First Artist asked Eaden to pay £15,000 commission over three years for negotiating the transfer. ‘We are not earning enough money on these deals,’ Eaden recalled Smith saying. Unaware that First Artist had received as much as £50,000 from the club, Eaden paid the first instalment but later protested, firstly, after he was told about Birmingham City’s payment to First Artist by the club’s chief executive; and secondly, in early 2002, after he was actually shown First Artist’s invoice by Steve Bruce, the club’s manager. Eaden’s complaint of the double payment only became known t
o First Artist’s young employees during 2002, after a heated argument between Eaden and Phil Smith. According to Eaden, Smith had said that Birmingham City had only paid £20–25,000 in commission for his transfer and the remainder was for other work. Furthermore, Phil Smith allegedly told Eaden that the agency had ‘done a favour’ to the player by not recording the fee, which would otherwise have attracted income tax. Eaden received advice from an accountant contradicting Smith’s suggestion. Their bitter argument about illegal double payments became known to everyone at First Artist’s headquarters.

  In the opinion of First Artist’s disgruntled employees, their agency was breaking the FA’s rules. Eaden’s transfer to Birmingham could only be completed after the player’s own contract was finalized. Therefore, approaching Eaden for a commission for work completed eight weeks earlier, and taking fees from both sides simultaneously broke the FA’s rules.

  The Smiths disagreed. They believed that they were innocent of any wrongdoing and vehemently argued that Eaden’s transfer was two separate transactions. The first transaction was the transfer between clubs, in which First Artist was acting for Birmingham City, and the second transaction was the negotiation of the player’s contract with the club. That arrangement, the Smiths argued, was accepted in the football industry. Their view was that Eaden was not contracted to First Artist at the time the agency was negotiating his transfer, but only after the agency obtained its commission from the club. Hence, they insisted, the FA’s rules had not been breached. That explanation was rejected by the agency’s dissatisfied employees. The letter and the spirit of the FA’s rules, requiring an agency to possess a written contract with either the club or the player during the negotiations, had, they argued, been broken.

  The combination of the Smiths’ aggressive pursuit of profits and the disquiet within the Wembley headquarters about the agency’s treatment of several other players transformed the increasing antagonism into a crisis in July 2002.

  Neil Miller, the agency’s general manager, told the Smith brothers that he was resigning. He blamed the general culture of the Smiths’ business; despite their pleas, Miller departed. Miller’s departure prompted the resignation of Steve Wicks, and, to the brothers’ surprise, nine of their staff also offered their resignations. Six joined Miller to establish Grassroots, a rival agency representing several First Artist players. The Smiths feared catastrophe and sought an injunction to prevent their former employees soliciting the agency’s clients. On the eve of the trial, First Artist settled the case on undisclosed terms which permitted the former employees to continue to run the rival agency. This settlement meant that the allegations were never resolved in court. The crisis had passed. First Artist had not immediately lost any valuable clients but endured a very damaging experience. The Smiths’ football dream was souring.

  Restricted by what he perceived to be football’s declining fortunes, Jon Smith looked with envy at the close relationship of Jerome Anderson, the chairman of Sports Entertainment and Media, a rival publicly quoted agency, with Arsenal and in particular with David Dein. Anderson, a former estate agent and insurance broker from Cockfosters in north London, is a lifelong supporter of the club and boasts ‘a love affair with Arsenal’. A relationship with England’s champions was every agent’s dream.

  12

  ‘THE DREAM-MAKER’: DAVID DEIN

  Paul Walsh was bitter. ‘Gutted’ and ‘angry’ were his sentiments about David Dein, the vice-chairman of Arsenal and architect of the club’s remarkable success.

  During the first days of July 2000, Paul Walsh had telephoned David Dein and offered Igor Stepanovs, a 23-year-old Latvian striker eager to play for an English club. ‘I think you’ll find him good,’ urged Walsh, a former Premier League footballer turned agent, registered by FIFA. Understanding the pedigree of the telephone call, Dein agreed to consider Stepanovs. The risk would be borne by Paul Walsh. If Dein was not interested, Walsh’s time and expenses would be wasted; but if Arsenal were prepared to buy the Latvian, Walsh would expect a commission. The ultimate beneficiary would be Skonto Riga, a Latvian football club. In common with the owners of the world’s minor clubs, Guntis Indriksons, the club’s president, regarded the English Premier League as a source of rich profits. Several of his players had been bought by English clubs, including Marian Pahars by Southampton. Latvian footballers were fashionable commodities that year.

  To sell more players to English teams, Indriksons had sent a squad under Gary Johnson, their British manager, to play against Stockport, Woking and Sheffield United. By the end of July, David Dein, relying on reports from Arsenal’s scouts, decided to buy an option on Stepanovs and another player. To negotiate with Arsenal, Indriksons required the services of an English agent. He was recommended to use Jerome Anderson, an agent he had never employed before. In Jerome Anderson’s opinion, ‘It was a complete coincidence that Indriksons came to me.’ There was some evidence that Indriksons had been advised to retain Anderson by Alex Kozlovski, a Belorussian agent, unregistered by the FA and FIFA, whom Jerome Anderson called ‘my representative in Riga’. Indriksons gave Anderson a power of attorney which was valid between 2 and 11 of August. That was Anderson’s first contact with the Latvian player, about one month after Walsh’s telephone call to Dein.

  On 2 August, David Miles, Arsenal’s secretary, signed an agreement with Jerome Anderson to pay the Latvian club £100,000 for a two-month option on Stepanovs. The final decision on the purchase, as Dein frequently reaffirmed, would be taken by Arsène Wenger, Arsenal’s manager. ‘Arsène Wenger decides which player he wishes to acquire, and indeed sell,’ David Dein has said, insisting that the manager and not the vice-chairman decides.

  By the end of the option, Wenger had made no decision. On Indriksons’s behalf, Kozlovski telephoned Jerome Anderson frequently to discover the fate of the deal. His own commission depended on the club signing Stepanovs. In turn, Anderson called Arsenal. He was told that the club would wait until Stepanovs played again. During that period, Kozlovski promised Jerome Anderson that he would persuade Stepanovs to retain Anderson as his agent.

  On 2 September 2000, Wenger flew in a private jet to Riga to watch the national team play Scotland. Wenger had undertaken the journey only after a trusted French scout had agreed that Stepanovs was a good purchase for the London team. Wenger returned to London and reported to Dein that Arsenal should buy the player.

  At Gary Johnson’s request Paul Walsh again telephoned Dein. ‘I hear that you’re interested in Stepanovs,’ said Walsh. The vice-chairman’s answer was a bombshell. ‘Yes, but Jerome Anderson is dealing with it,’ replied Dein. Walsh was puzzled. ‘What’s Jerome Anderson got to do with it?’ he asked. ‘I’m Stepanovs’s agent, not Jerome Anderson.’ ‘Have you got any paper to prove it?’ asked Dein, anticipating the answer. In his Highbury headquarters, Dein had assessed Walsh as just another aspiring one-man-band agent, operating from a mobile telephone. Those peripheral lightweights, offering unknown foreign footballers in the hope of earning fortunes in commission were, in Dein’s opinion, best sidelined. Even if, like Walsh, they were agents registered by FIFA. Before Walsh could obtain the written authorization from Johnson in Latvia, the vice-chairman moved fast. In a telephone conversation with Johnson, Dein declared his interest to buy Stepanovs immediately for £1 million. Indriksons was delighted. In an exchange of faxes, the sale was completed on 4 September 2000, just two days after Wenger’s flight. The pertinent omission from that deal was Stepanovs’s contract with Arsenal. Although the player had been sold to the club, he had not signed a contract and remained technically unrepresented. Wishing to avoid any accusations of a conflict of interest and a breach of the FA’s rules, Jerome Anderson suggested that Alex Kozlovski, his own representative, advise Stepanovs. Arsenal, nevertheless, would be invoiced to pay the commission fee to Jerome Anderson. Two hours after landing at Heathrow on 4 September, Stepanovs signed a formal contract with Jerome Anderson to act as his representative. The timescale was bewildering
, even though everyone involved was satisfied. At the outset, Anderson had represented Skonto Riga; then through Kozlovski, he represented Stepanovs; and finally, he was paid by Arsenal. Potentially, the allegation could be made against Jerome Anderson of a conflict of interest which favoured Arsenal and the agent.

  Soon after, with Kozlovski’s help, Stepanovs signed a contract with Arsenal. There was, according to Anderson, little negotiation about the salary of about £7,000 per week, low for an Arsenal player. That did not displease Dein.

  In David Dein’s opinion, ‘Stepanovs was brought to Arsenal by Jerome Anderson and Paul Walsh was not involved, although he did try to involve himself in the transaction.’ Dein is scathing about aspiring agents chasing small commissions, shouting ‘I was there first.’ He wants them smoked out. In his air-conditioned office, Dein has the authority to pronounce, ‘The first call does not matter.’ Walsh was the forgotten loser, another casualty of David Dein’s trust in Jerome Anderson, an intruder disliked by many as a wealthy enigma who had first represented the Latvian club and then became the player’s agent. The contradictions caused no unease for the principals involved. Gary Johnson’s verdict about Anderson was definitive: ‘He’s very good for players and he’s trusted by Arsenal, who do the right thing by the players.’