Reform 'disgraceful' agent fees, MPs tell soccer clubs

The Inland Revenue is called on to investigate the murky world of transfer fees following the escalating feud engulfing Alex Ferguson and Manchester United

By Mike Bygrave,Andrew Johnson
Sunday 01 February 2004 01:00

The crisis engulfing Manchester United over the murky world of football agents could spread through the whole of football, MPs warned yesterday as they called on the Inland Revenue to investigate football transfers.

They also renewed calls for football clubs to accept the same financial scrutiny and transparency expected of other multimillion-pound, publicly listed companies.

MPs are concerned that while the agents act on behalf of the player their vast fees - which can run into millions of pounds - are being paid by the clubs. In many cases the fee is demanded by the agent as a package from the club - obscuring whether it is paid on behalf of the player or not.

MPs argue that all payments should be considered as being on behalf of the player the agent represents. "It is a tax scam," one Labour MP said.

Alan Meale MP, a Labour member of Parliament's All-Party Football Group and an adviser to the board of Mansfield Town, added: "All fees should be paid by the players. The whole issue of agents needs examining. It is a disgrace. I would like the Inland Revenue to examine all transfers."

The MPs' calls for greater financial transparency in football follows the publication of the 99 questions sent by the Irish racing magnates JP McManus and John Magnier to the Manchester United board last week. What began as a row between the Irish duo, who own more than 25 per cent of United, and the club's manager Alex Ferguson over the ownership of a racehorse, could turn into a test case for football that "blows the whole thing apart", said the Labour MP Claire Ward.

But yesterday United's legion of fans showed they stood behind the manager. Ferguson was given a standing ovation when he walked on to the Old Trafford pitch before the game against Southampton. In a stage-managed display of solidarity he was joined by his chief executive David Gill and the two shook hands. Some United fans carried banners and wore T-shirts expressing whole-hearted support for Ferguson.

Mr McManus and Mr Magnier's questions strike at the heart of the shadowy world of agents, where enormous sums are paid to individuals who many believe play an unnecessary role in player transfers.

According to John Holmes, whose SFX Sports Group represents stars such as Michael Owen and, until recently, David Beckham, "there are really two kinds of agents".

"There's the American model, where agents represent players and advise players on all aspects of their careers," he said. "And there's the European model where agents were traditionally brokers of deals, middlemen. What's happened to our business is that the European model has proliferated in recent years."

Mr McManus and Mr Magnier say they cannot understand the "necessity for the relative secrecy" in which agents work and the "astonishing fees" United paid them. Though the document to the United board does not name any agency, the spotlight has fallen on the role of Manchester's Elite agency. Elite is part owned by Sir Alex Ferguson's son Jason and is associated with the Monaco- based agent Mike Morris.

It has been alleged that Mr Morris and Elite had exclusive knowledge that Jaap Stam was available for transfer in 2001, where a £1.4m commission was involved. Jason Ferguson has worked on an estimated £50m of United deals, not bad for a 31-year-old former Sky TV sports producer.

Other leading independents include the Paris-based Bernie Mandic (£2m fee over the sale of Harry Kewell by Leeds to Liverpool); the veteran Dennis Roach, inconclusively investigated by the FA's "bung-buster"; the Norwegian Rune Hauge, involved in the former Arsenal manager George Graham's disgrace for taking a backhander in the 1990s; and the former Israeli journalist Pinhas "Pini" Zahavi, who orchestrated the Russian billionaire Roman Abramovich's purchase of Chelsea. Zahavi was among the agents sharing £750,000 in fees when Manchester United recently bought Louis Saha from Fulham.

Often middlemen and players' representatives work together or are the same people. The sums are staggering. When Leeds bought Rio Ferdinand, Mr Zahavi, as the player's agent, made about £1m, while Mr Hauge, who brokered the deal, made £1.75m. When Leeds sold Ferdinand to Manchester United two years later, Mr Zahavi pocketed another £2m.

The journalist Michael Crick, author of a recent biography of Alex Ferguson, believes that "the middlemen have run rings around the football authorities, who don't even understand that some kinds of relationship are potentially corrupt".

Andrew Mills, who works with Premier Management Holdings, one of the top five soccer agencies in the UK, adds: "The biggest problem in our business is agents who play no particular role other than passing on information and who attach a value to the passing on of that information."

Behind the new breed of middlemen are two developments. One is an explosion in numbers of agents. Fifteen years ago there were a handful. Now there are 229 licensed English agents listed on the Fifa website and many others working without licences (compared with 50 or 60 in Italy or France).

Agents without players to represent become brokers. Don't blame them, some say: blame the clubs. That's the second recent development. Michael Crick says: "Clubs are using agents to do things they don't want to do themselves. It's down to deniability."

"Tapping" and "unsettling" are done by agents and managers alike. "Tapping" is approaching a player at a rival club, sometimes behind his club's back. "Unsettling" is the result of tapping, when the player turns difficult, perhaps his form deteriorates, and he shows he's unhappy in the hope his club will break his contract and release him.

Then there is outright corruption. Money can go missing or transfer fees be inflated. Even when no corruption is involved, there are many instances of agents inserting themselves into deals where they seem to have no business. Andrew Mills describes one method: "If you're a manager who wants player X and tries to find out who represents him, 8 out of 10 people you call will say 'I do'. They don't, but they know who does and think they can get in on the deal."

It could take two Irish racing tycoons, in a private power struggle at Manchester United, finally to unlock the secrets of British soccer and drag the game into the modern business world with its demands for transparency.

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