Friday, 26 March 2010

The wonderful thing about Digger

I was amused to read in Owen Gibson's Digger column in the Guardian this morning that what I have previously written about sports levies has 'got some sports governing bodies in a twist'.

I am guessing that by 'some sports governing bodies', Owen actually means Tim Payton, who is now at the ECB but who used to work as a lobbyist, and worked with us on behalf of the sports as we tried to secure agreement between us. I would think that the NGBs themselves have better things to do than care what my view of the world might be.

Whoever it means, though, the implication is that I've told porkies. 'Both things cannot be true' apparently - the both things being my version that 'we wouldn't put money into a trust [for sport] only to have a sports levy imposed at the behest of NGBs a short time afterwards', and, separately, the existence of a 'draft contract' which shows 'a clause that says that any payment will simply go towards any requirement for a statutory levy if one is introduced'. In fact, both things can be true, and it isn't difficult to explain how.

The 'draft contract' in question was a voluntary agreement which had been worked on for two years, by which Betfair was going to pay 3% (if I remember rightly; I think the figure started at 2.5% and went up, but it may have been the other way around) of the revenues gained on a particular sport to the sport in question.

It wasn't our preferred route, because, as I have mentioned before (in a piece in the Guardian, in fact!) we think it is wrong to be prescriptive about where the money is made, on the grounds that once you start to be so, you have to be properly so. You can't say "it's football's money" when actually you mean, "it's Manchester United's".

But it was as good as we could manage at the time, in the absence of a better idea.

So, yes, we had a draft agreement (although I would hesitate to call it a contract: the whole point was that it was a voluntary deal). And yes, we had agreed the level of contributions.

But the draft agreement in question was not the first draft agreement: it had, after all, taken two years to get to this point - an astonishingly long time when you consider that we were offering to give money on a voluntary basis. And the reason why it as taking so long was the sports' insistence that the deal needed to be linked to integrity (although, again, I would hazard a guess that 'the sports' here actually again means Tim's insistence: I don't believe that the sports had much involvement other than saying to Tim, "we believe your pitch that you can get us money; please go out there and do it," which is fair enough).

The result of the insistence, whoever's it was, was that the first draft of the agreement that reached my desk actually started with the words, "Because we accept that we cause an integrity problem for the sports, we (Betfair) have agreed to pay 3% of sporting revenues to the sports in question," the implication being that it was a direct payment to clear up our own mess.

It may not surprise you to know I wouldn't be keen on an agreement like that. Apart from the fact that I don't believe it, the fact is that if we'd signed it, it would have achieved exactly the opposite of what it was intended to do. Every monopoly in Europe would have stood up and said, "they even accept themselves that they cause an issue with sports' integrity: our argument for maintaining monopoly systems of betting in Europe is absolutely justified."

In contrast, a major driver for us signing the deal was that we wanted to knock down the other argument against us in Europe: that we couldn't work with sport. So, adding an integrity element to a voluntary agreement would have meant that we signed something that did exactly the opposite of what was intended.

For what felt a long time, Tim argued this point: he wanted to link it to integrity, for reasons which I never understood explicitly. My guess would be that he felt that it gave him a greater chance of using the fledgling agreement with Betfair as an argument for getting government to require something similar of everyone else in the industry, but that is, as I say, just a guess. It makes sense, though: he'd been given a job, and it would not have been easy to get a government to broaden out a voluntary gentlemen's agreement to a company's competitors; but it would have been reasonably simple to do it if it was based on an acknowledgement by the first signatory that there was a solid reason for the deal which could be tied to everyone else as well.

Again, though, the conjecture is probably not important. Eventually, Tim relented, and came back with a draft agreement which was, as we had intended originally, just short and to the point: "we want to give you money. This is how much. And by the way, if it becomes compulsory to make a payment, then this payment will fall away." This is the draft 'contract' which is referred to in Digger.

However, the same week that this agreement was finalised, I had a call from Richard Caborn asking me if I would go and have lunch with him and Chris Bell of Ladbrokes which I wrote about back in January. It was at that lunch that Chris Bell mooted the 'better idea' we had been looking for: not a draft agreement on the lines of what we had (where Betfair was out on a limb), but a Grass Roots Trust (GRT) for sport, funded by as many within the industry was we could get on board (and starting with Ladbrokes and Betfair together). I much preferred this idea (not least because it would result in a bigger fund of money), and I called Tim accordingly. I said that we thought we would get the GRT done, and I didn't want to sign our draft agreement if we were going to do so.

At the time (it was October) I also told him that if we had not got the GRT done by Christmas, I would revert to the agreement we had drafted. I blatantly went back on that, such that, sadly, we ended up getting neither done. You could argue that in this, I was at fault. But the reason for my doing so was that I was subsequently led to believe that Tim was actively lobbying against the GRT. Indeed, I came out of a government meeting one day in which I had been told that Tim's opposition to the GRT on behalf of the sports was one of the sticking points to progressing it, only to pick up the phone to Tim asking me 'how you're going with your Grass Roots Trust idea'. Again, fair enough: the GRT wasn't what he'd been tasked with securing or had promised. I guess it isn't called politics for nothing.

If Gerry Sutcliffe has written to the sports expressing disappointment that his plan for a voluntary levy through Sport England "has not been taken up by the gambling industry", he should know that I share that disappointment; and although I haven't spoken to him about it, I suspect that so does Chris Bell.

But the only two differences between Gerry's plan and the GRT plan we presented was that ours laid out the two things which we believed would be needed to get the rest of the industry on board: that our mooted fund should not be run by Sport England, but through a separate Trust run at arm's length from the gambling industry, so that the money didn't get lost in a big hole and it could be made clear that the industry was supporting specific projects; and that it should be accompanied by a clear statement to NGBs that the threat of a statutory levy is removed - the condition that is questioned today by the sports bodies through the Digger column.

As it happened, neither condition was forthcoming. It seems to me that neither is onerous, and I would hope that if we actually got them both, the idea could be resurrected.

But in their absence, in the interim, a few industry players have got together and have struck a separate deal of our own with the Players' Federation instead.

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