Strike by professional footballers averted

English football faced major disruption in December 2001 as professional players threatened industrial action. The strike threat, called off after a last-minute deal, concerned the union's share of television revenues, which have soared in recent years.

Negotiations between the Professional Footballers' Association (PFA) and the English Premier League (PL) began in August 2001 concerning the trade union's share of the industry's television revenues - a longstanding arrangement to enable the union to provide welfare and training services. An impasse was reached because the PFA wanted to maintain its 5% share of revenues that had greatly increased since the previous broadcasting deal. The union balloted its 3,500 members over industrial action in support of its claim. All but 22 of the 2,315 votes cast were in favour of strike action. All league matches in the top four divisions due to be televised live or for transmission of highlights were therefore threatened by strike action on the weekend of 1 December 2001.

The cause of the dispute

The strike would have been only the second ever in English professional football. The first happened in 1956, a year after televised football began, and also concerned the right to a share in income from television broadcasting. This was resolved by the dedication of a percentage (7.5%) of broadcasting income to the PFA for its provident fund (to cover its welfare, education and training services) and by establishing a fee to players on a match-by-match basis. The proportion of broadcasting money paid to the union rose to 10% in 1967. This figure was renewed in 1991 when the flat fee to individual players was dropped.

Income from television began to rise in the 1990s, especially from the new satellite broadcasters and with the creation of the Premier League in 1992. The renegotiation of the television rights for the Football League (FL) - consisting of professional football clubs below the Premier League - in the 1996/7 season increased its income dramatically. The FL therefore wanted to reduce the percentage paid to the PFA. After a ballot on industrial action, which achieved a 91.8% vote in favour, the PFA secured 5% of the broadcasting income of the FL. A similar three-year deal was agreed with the PL in the following season.

The successor contract over television rights was agreed between the television companies, the Leagues and the Football Association (FA) in early 2000. The annual television revenue of the PL increased from GBP 150 million to GBP 500 million; that of the FL from GBP 25 million to GBP 115 million; and that of the FA from GBP 25 million to GBP 115 million. The PFA's agreements with the Leagues expired in May 2001 and the union's claim was based on the renewal of its 5% share, which would amount to GBP 35 million a year. In September 2001 the PL, to which the FL and FA had delegated negotiating authority, offered a total sum of GBP 30 million, spread over three years. In the subsequent negotiations, the PFA proposed reducing their demand to GBP 27 million per annum in return for a longer settlement. The PL said that its final offer was GBP 50 million over three years, of which all but GBP 7 million should be dedicated to particular funds. As a result, the union balloted its members for industrial action.

The union's case

The PFA argued that it was entitled to a share of broadcasting revenues when its members waived their intellectual property rights concerning the broadcasting of their image in the original agreement. The PFA claimed that it needed the money for disadvantaged former players, arguing that while overall revenues to the game were increasing, the distribution had become much more unequal. As the only body concerned with the welfare side of football, the union's share was essential to look after the interests of players, particularly those in the lower divisions and youngsters released by their clubs. The union was also driven by uncertainty over the future. As the union's chief executive, Gordon Taylor, put it: 'Over the past 50 years it's been 15%, it's been 10, it's been down to five, it's excluded overseas money and now it's excluding money that's got paid in advance, and now it's time to draw a line in the sand. We're not certain the money will be there in the future and we feel we need to protect the very future of the PFA and its very meaningful existence.'

This concern was particularly acute for two reasons. First, because the present deal was reached at the peak of economic growth when advertising revenues for the television companies were strong. The deal now looks very expensive, and the terrestrial broadcaster ITV is already trying to renegotiate the terms of its agreement with the FL. Second, there is also a risk posed to the smaller clubs by the possibility of a second-tier Premier League being formed in the near future. The union was therefore keen to maximise its present income and secure it for the future on a guaranteed, rather than a 'grace and favour' basis.

The employers' position

Football club owners were quick to point out that it was unheard of for employers to hand over GBP 35 million a year to a union. They also claimed that it was unnecessary, since players already benefited from television revenues in the form of large salaries, which meant that even players in the lowest leagues required fewer services from the PFA. It was also suggested that the PFA could increase its revenues by raising its membership fees. Players pay an annual fee of GBP 75 to the PFA, regardless of income, even though many Premiership players earn in excess of GBP 20,000 per week.

The PL said that its offer of GBP 50 million over three years was almost double what the PFA had previously received. It claimed there was no legal or moral obligation for a figure of 5%, and argued that professional footballers have no performance rights to waive, as they are employees of their club not individual performers. Some club owners questioned the need for the PFA at all, and suggested that the PL, FL and FA should set up an alternative welfare fund.

The PL sought a legal injunction at the end of November to prevent the threatened strike from going ahead. Disregarding any injunction would have left the union facing fines for contempt of court. Several club owners also warned players that, whatever the ruling of the court, they would face withdrawal of pay and fines for refusing to play. In the event, a settlement was reached a week before the strike was due to take place. The PFA will receive GBP 52.2 million over the three years of the leagues' current broadcasting contract, equivalent to 2.5%, with complete discretion over its expenditure. Significantly, a 10-year mechanism was also agreed to prevent disruption over future broadcasting deals. For every 1% increase in broadcasting revenues, the union would receive a 0.75% increase in its current share; for every 1% decrease the PFA share would fall by 0.5%.

Commentary

It was always highly likely that a deal would be reached between the union and the PL to avoid a strike. The employers were under pressure from the broadcasting companies, sponsors and advertisers to reach an agreement. The PFA was beginning to lose public support and could not be sure of the commitment of the top players to a strike, especially given the hostility of the clubs. The eventual agreement was a success for the union, in that it delivered a substantial increase in income with some long-term guarantees. However it was nothing like the original amount claimed and came at the price of souring relationships with the employers. This could be significant given the importance of other issues that have to be resolved, such as the future of the transfer system and the standard contract common to all players.

The dispute also has implications beyond professional sport. First, the dispute could have an impact in raising awareness of the principles of trade unionism amongst the young. The PFA provides important services for its members and the solidarity of those members in pursuit of the union's claim was highly visible. It is certainly open to the Trades Union Congress, to which the PFA is affiliated, to highlight the players' campaign as part of its efforts to recruit and organise young workers.

Second, and more immediately, the dispute also draws attention to the importance of the law in collective bargaining in Britain. This applies to both the details and the principles of industrial action.

As an example of the former, the union was required by law to ballot its members over prospective industrial action, and it was suggested by some clubs that the wording of the question on the ballot paper was legally suspect. An injunction could have been sought on these grounds to prevent any strike.

The more fundamental issue concerns the question of the legitimacy of a strike where contractual and employment relationships are complicated. Unions are granted legal immunities from liability for organising a strike providing that it is in furtherance of a legitimate trade dispute, which must not be directed at third parties, which has had the effect of limiting the 'right to strike' in many industries due to the growth of outsourcing. In this case, the football clubs, as employers of the players, claimed that the union's dispute was with the PL and that they were innocent third parties. This formed the basis of their application for an injunction. The union in turn argued that the PL was really the instrument of the clubs, and that it was an implied term of employment that some money from television would go to the PFA. The union therefore argued that 'the clubs are clearly in breach as they have failed to comply with their own regulations.' Given the complexity of these legal arguments, it would not have been surprising if an interim injunction had been granted to stop the strike going ahead, potentially followed by a full (and expensive) court case to determine a claim by the employers for damages. In the end, recourse to the law may or may not focus the minds of negotiators, as it eventually seemed to in this case, but at the risk of souring relations for the future. (J Arrowsmith, IRRU)