PR Week, and integrity in sport

There's a very interesting reputation survey in PR Week this week, which asks 3,000 members of the public what impact they think sports scandals have on sport.

It found that 73% of people did not think rugby was damaged by the 1999 drugs expose on Lawrence Dallaglio; 58% think boxing was not damaged by Joe Calzaghe's revelations of cocaine use; and 40% of people felt that snooker's reputation would take less of a knock than John Higgins' and the News of the World's as a result of the recent story there.

I found it interesting in light of my time sitting in the Parry Commission which looked at the issues of integrity in sport.

One of the things that set the betting industry and the sports industry at loggerheads during the meetings for that Commission was the betting industry representatives' view that the extent of the problem which the Commission was being asked to investigate had never been quantified or addressed; and the response of the sports' representatives that it really didn't matter that it hadn't been, because 'just one instance' is 'catastrophic'.

The PR Week investigation doesn't actually cover betting scandals, or indeed other sporting scandals like l'affair Renault or 'Bloodgate': it is restricted instead, to instances of 'entrapment' and undercover newspaper stings.

But it's interesting to see just how sanguine the public is in these instances. I find it hard to believe that they view different types of scandal in a significantly different light; which rather suggests that addressing the quantum of the problem is a relevant starting point.

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.

Chinese match-fixing story

The story out of China about match-fixing and corruption in sport, as reported in the Guardian a couple of weeks ago but for some reason only picked up by PA Sport today, seems to me a classic example of two points that I have made repeatedly (boringly, even!) over the years.

I've written about match-fixing before here, and talked about it at great length in the past, so I will just reiterate the two main points which are underlined by this story.

First, the only people who can corrupt sport are people who are involved in it. There is no way I can fix the result of any match without the collusion of a player, team, coach, or official involved. I accept that I may become the corrupting force behind a fixed match, but ultimately I cannot fix it without the collaboration of someone or some group directly involved in the event - someone, that is, who falls under the jurisdiction of the governing body of a given sport. Education of participants in sport is therefore a key ingredient to rooting out corruption.

Second, the threat to sport comes not from the legal, regulated market, but the illegal market. If all betting were transparent and all funds could be tracked, then it would be easy to establish who was coercing the players, and who was making money.

Sadly, neither of these points is yet publicly accepted by governments or by sporting bodies. this is because accepting them makes it harder to argue for monopoly operators or sports levies from regulated betting companies.

How to fund sport through betting...

News from Australia that Betfair is one of 32 sponsors for the Australian Open which starts on 18th January proves again (if the myriad of Premiership shirt sponsorships from the gambling industry, not to mention deals like Betfair's with Manchester United and Barcelona) how money from betting flows into sport through sponsorship deals that work for both parties, with commercial teams hammering out terms.

It seems pretty obvious. But anyone who has been following the debate in the UK about how sport should get money out of betting will know that while it may be true that individual sporting organisations happily sign deals which land them significant sums of money, attempts to foster commercial relationships between National Governing Bodies of sport (NGBs) and the betting industry have foundered on the fact that sports believe they have a right to money from betting, just for putting on the show; and the betting industry believes it should have something in exchange for whatever cash it outlays.

I've written before, at some length, about why I think the position adopted by sport makes no sense (such as a piece I wrote for the Guardian in December), so I won't reiterate all those arguments. But what I find striking about the agreements we have in Australia (and this latest, with Tennis Australia, is not the only one with an NGB) is the difference in the way that the sports come to the table.

Eighteen months ago, I had lunch with Richard Caborn, the former Sports minister, and Chris Bell, the Ladbrokes CEO. We talked about putting together a Grass Roots Trust for sport, funded by the gambling industry but at arm's length from it (that is, administered by independent Trustees), which we thought could generate something around £3million a year. At the time, that would have meant £10million ahead of London 2012, and our suggestion was that the Trustees, once appointed, might like to consider whether it go towards something in connection with that.

When we suggested it formally to government, we put one condition on it: we wouldn't put money into a Trust only to have a sports levy imposed at the behest of NGBs a short time afterwards. There is a finite pot of money that any gambling operator will spend on sport, and if a levy came about, the Trust would have to be wound up. There was no point in starting something, only to pull it shortly after. So, the condition was that the NGBs should be told clearly that there was to be no sports levy, and should instead accept that betting already supported sport in a number of different ways.

The long and the short of what followed is that nothing happened. The condition was not met, and the Grass Roots Trust idea died a death. The NGBs continue to pursue their quest for a levy, taking their fight to the media, Westminster, and Brussels.

Two months ago, I found myself sitting next to the former Ipswich Chairman David Sheepshanks at a League Managers' Association dinner. Early in the conversation he asked me, "can I get you involved in the National Football Centre?" by which he meant, "will you help to fund it?" I explained to him why we would not get involved with funding sport at that sort of non-commercial level: because we had the threat of the levy hanging over our head, being lobbied for, hard, by the sports. But then I asked him how much he needed. His reply was £5million. Eighteen months had passed since the idea of a sporting trust was mooted, and the National Football Centre was just the sort of thing which it might have funded, had its Trustees decided that the Centre was a better home for it than 2012. The maths hung in the air over our main course.

You might argue that if the sports successfully got a compulsory levy out of betting, through legislation either from Westminster or from Brussels, then the quantum of money raised would dwarf £3million a year. You may be right. But I would suggest that if (for the independent observer who looks at both sides) the argument against a levy is at least as convincing as the argument for it, then it seems a battle not worth fighting - particularly when money is passed up in the interim. Better to reach a deal that works for both sides, since it brings in cash, than to argue a 'right' which is in great dispute.

Perhaps that is the view of the Australians.