21 May 2012 | By Sam Chadderton
As football clubs become more businesslike, in-house lawyers have become more important. Man City’s legal head reveals how his turbulent year has culminated in victory
Kolo Toure’s drugs ban, the Carlos Tevez saga, Garry Cook’s offensive emails, hectic transfer windows, planning rows and Mario Balotelli: 2011-12 is a season that Manchester City general counsel Simon Cliff will never forget.
A still hoarse-sounding Cliff spoke to The Lawyer 48 hours after his club’s jaw-droppingly tense and historic title triumph about a momentous campaign both on and off the pitch.
The former Shearman & Sterling M&A associate joined City three and a half years ago. One of the firm’s clients was Sheikh Mansour’s oil-rich company Abu Dhabi United Group. Following the £200m takeover of Manchester City, Cliff was seconded to the club as head of legal. In April 2009 the move became permanent.
Cliff watched Sunday’s injury-time victory from the directors’ box with colleagues, family and friends and said it was a fitting end to a “turbulent 12 months”.
To the last, the lawyer has had to keep a close legal eye on events at the Etihad Stadium, advising the club to issue an immediate apology after Carlos Tevez held up an ‘RIP Fergie’ banner during the team’s victory parade through Manchester on Monday (14 May).
“The club apologised overnight to Sir Alex Ferguson and Manchester United,” says Cliff. “Carlos made an error of judgement. Hopefully we’ve drawn a line under it. We’ve not heard anything from them.”
Tevez has been the subject of just one of several high-profile legal disputes that have kept the former Freshfields Bruckhaus Deringer trainee occupied this season.
“It’s been a manic season,” Cliff admits. “On the football side of it we came out of the blocks really well. Then, at the start of September, came the first reports of emails that eventually led to Garry Cook leaving the company.”
Cliff led an internal investigation after chief executive Cook was accused of sending an email to player Nedum Onuoha’s mother, Dr Anthonia Onuoha, ridiculing her battle with cancer.
He initially denied it, claiming his email account had been hacked, but when Cliff’s four-day probe revealed “foundation in the allegations”, Cook changed his tune, apologised and resigned.
Come on Tevez
Then came the infamous Tevez incident in late September: he refused to come on as a substitute in Munich when asked to warm up by City manager Roberto Mancini.
“That took up four months of my life,” reveals Cliff. “I was leading the matter internally with the club and there were a number of disciplinary matters relating to that incident that were investigated. I assessed the facts and, at an internal hearing towards the end of October, the breach of contract charges against him were upheld.
“Then he left the country and went to Argentina without permission, so another disciplinary process went with that and took up the rest of 2011. It was a delicate situation and it was important we followed the employment process to establish the facts.”
At the beginning of January things moved on again.
“It then became a question of working on whether we sold him,” continues Cliff. “He wanted to leave and we were prepared to sell him for market value, with AC Milan the main club interested. But by 1 February we were unable to agree a deal for him and he was still our player.
“Tevez had failed in one appeal and then withdrew his further appeal to the FA and Premier League, apologised, and came back into the squad.”
What a dope
During the season Cliff also had to fine Kolo Toure after the Ivorian served his suspension for a doping offence, albeit an accidental one.
And each time Mario Balotelli was sent off or courted controversy, Cliff was poised ready to jump to his legal defence in front of the FA.
Then, just to add to the legal team’s workload, it faced stubborn opposition on the planning front too.
Cliff went into battle with landowner and Man Utd fan Shaun O’Brien, who refused to sell his land to his rivals so that they could continue with their £100m training ground expansion plans.
And in a season of success, Cliff reveals that this “major project” has now been resolved without the need of any further legal wrangling.
Cliff is continuing to advise City executives on the impact of Uefa’s financial fair play rules and is confident the club will have a business plan to comply with them.
City sitting pretty
So will the impending restrictions on transfer activity mean a quiet summer for Cliff, who has said that each player purchase is the equivalent to a decent M&A deal?
“No,” he insists, “it gets even busier now. The footballers clear off for six weeks, but we’ve got the sponsorship and commercial side of it, with a lot of people wanting to be associated with us. That’s one of our biggest areas of work.”
But it will be interesting to see what happens on the football side, Cliff admits.
“We don’t know from one transfer window to the next what will happen because the market hasn’t got going until we’ve injected money into it,” he says.
Cliff said there are no immediate plans to increase the size of his team, despite the workload and the fact the Man City’s legal squad is smaller than Man Utd’s team of four full-time in-house lawyers.
But back to the football. When The Lawyer spoke to him, Cliff was still recovering from two nights of celebrations.
“It’s the most amazing thing I’ve ever experienced,” he admits. “I saw the rowing in Athens in 2008 when the British team won gold, but this supercedes it. From the ecstatic feeling at half-time when we were winning, then to the depths of despair when there seemed to be no hope, and then the jubilant scenes at the end.
“It was an incredible day. It’s surreal. But I’ve seen the trophy, I’ve touched it. From a legal and football point of view it’s been a turbulent 12 months on the back of a three and a half year rollercoaster. So much has gone on that it’s just really nice to have played a part in it.
“But for us there’s lots more work to do, deals to be made and, of course, we’ve now got to try to win the Champions League next season.”
When things are going well at a football club, as it is for Manchester City’s Simon Cliff, it can be a dream job for a sports-loving lawyer.
Two years ago, when The Lawyer spoke to Liverpool general counsel Natalie Wignall (22 March 2010), this was undoubtedly the case. But if two years is a long time in football, sometimes so is a day.
Between The Lawyer arranging to speak to Wignall last week and the actual interview the following day, manager and club legend ‘King’ Kenny Dalglish had left the club and Wignall was tied up in negotiations.
It has been a tumultuous season for Wignall and her beloved Reds, with several executive departures creating a climate of uncertainty.
Liverpool’s director of football Damien Comolli left last month, followed quickly by club sports science head Dr Peter Brukner.
There has been speculation that the club’s owner, the US-based Fenway Sports Group, was unhappy with the way the Luis Suarez race claim case was handled by its legal advisers.
Wignall supported McCormicks senior partner and sport, media and entertainment specialist Peter McCormick, along with club secretary Zoe Ward, when Liverpool striker Suarez was found guilty by an FA commission for racially abusing Manchester United’s Patrice Evra.
But the club was then roundly condemned for its stance in support of Suarez after he was banned for eight games.
Wignall previously told The Lawyer that the in-house legal role was her “dream job”. She has been at the club during a testing time, with legal wrangles on and off the field, including the international dispute over the club’s ownership (TheLawyer.com, 8 March 2012).
The ongoing action has brought work to a number of the North West city’s law firms.
“I have to pinch myself when I come in to work every day,” the born-and-bred Scouser, who lives within walking distance of Liverpool’s Melwood training ground, told The Lawyer in 2010. “It’s just the best job in the world.”
She conceded that the intense scrutiny of the club can be difficult to deal with.
“It’s the extent to which everything you do is in the public eye,” she says. “It’s just not like any other business where you might win and lose big contracts, but either way you get on with it. Here the performances on the pitch affect the business so much more.”
West Bromwich Albion
One of the clubs that Trevor Watkins, head of Pinsent Masons’ sports sector, has in mind when he talks about a “good structure” is West Bromwich Albion and Richard Garlick, who has filled the combined role of legal counsel and club secretary since 2010.
Commercial litigator Garlick was an associate at Clarke Willmott in Birmingham under the stewardship of Watkins from 2008. He later represented Plymouth Argyle at a disciplinary hearing for a mass brawl with West Brom in early 2010.
Lawyer Darren Eales was heading to Tottenham Hotspur as director of football administration and Garlick replaced him.
Garlick claims that, because the club was one of the few debt-free clubs in the 2010-11 top flight, the new regulations are not a major concern.
“As a general point on the way in which the law and lawyers are infiltrating football, it’s because we’ve moved away from the traditional rules, which were straightforward, to complex contracts, image rights, cross-jurisdiction and employment issues,” says Garlick. “The whole of football has become much more sophisticated in the past 20 years and it’s natural that more and more lawyers are involved.
“Football clubs, like most law firm clients, have found that each time they have to seek external legal advice they can quickly rack up considerable fees. Clearly there is a need to go external at certain stages, but in terms of in-house, every aspect, from cleaning contracts to new kits, has a legal angle.
“For example, if you get the sophisticated drafting wrong on an advertising contract for a game against Man U, with a global audience of a billion, a lot of people will be upset. It’s mostly to do with the sums involved. Gone are the days when players were paid a standard salary. The risk element has rocketed.”
Garlick adds that the financial fair play regulations are widely seen as the rest of football catching up to the way West Brom runs its business.
“You’ll see some clubs cut back on spending, sacrificing what they used to do in transfer fees to get back on an even keel,” he adds. “It will be like trauma – having to cut off their arm to save the rest of the body.”
This season Garlick had to deal with the legal side of manager Roy Hodgson leaving for England.
Often, when managers are ‘poached’ mid-season and mid-contract, the general counsel can come face-to-face with aggressive employment litigators and the process can become ugly and drawn-out.
But with Hodgson on a rolling 12-month deal and the FA opting for the polite inquiry route, Garlick said the deal was “not complicated”.
“Whenever there’s the ending of a relationship or the start of a new one, there’s always going to be legal issues to bottom out,” he says. “We try to protect the interest of the club and are continually succession planning.”
Dealing with the dreaded agents is also a necessary evil, especially during the summer break.
The best ones, Garlick reveals, are those who have a knowledge of a club’s needs, its finances and its culture, and offer players that fit into all three.
The worst – and the kind that give rise to the dated caricature of shady operators slipping brown paper bags to chairmen – are those who come out of the woodwork every couple of years offering players who are way out of budget.
“Football’s created them because of the amount of money paid out in wages,” Garlick explains. “They only need a handful of clients to make a very good living out of the game. They’re part and parcel of the game and you have to deal with them as a club lawyer.”
West Brom sporting and technical director Dan Ashworth is responsible for recruitment and negotiations, and then it is a case of the lawyer converting that into a tight legal document.
Garlick’s dual role is right for a club the size of West Brom, he says, but bigger clubs need dedicated teams.
The role of in-house lawyer can be as high-profile as some of the big City rainmakers, with millions of fans and global media outlets poring over each carefully crafted club statement and speculating on every transfer or commercial deal.
Norwich City head of legal Jamie Arnall found himself subject to scrutiny last summer when the football club was accused of ‘bullying’ a local brewer.
Arnall, a former Leathes Prior solicitor, joined the Norfolk club in December 2010. A few months later he claimed that a beer named ‘On the Ball’ infringed the club’s IP and threatened legal action.
The bottle featured the club’s crest and its name was close to its anthem On The Ball, City. Arnall wrote to brewer Colin Emms to warn that it was an unauthorised use of its brand. Emms stopped selling the beer under that name.
A Norwich spokesman says the incident was “one of a number” of similar trademark and copyright infringements that the club has had to challenge legally.
Since Norwich returned to the Premier League this season, a number of businesses and traders who have looked to capitalise on the feelgood factor by using the team’s crest, colours or other IP.
Since Trevor Watkins started watching Bournemouth as a six-year-old he has had more than a passing interest in football.
Not many City lawyers have also run a professional club as chairman, which is something Watkins did with his beloved Cherries in 1997, having to postpone his own wedding in order to save the club from extinction.
To this end, Watkins, a partner and head of sports at Pinsent Masons, says the rise of the general counsel role within football clubs has been “a long time coming”.
He believes the financial constraints sweeping through the English game will require more clubs to completely reshape their businesses – that, or go bust.
“The greatest challenge generically is how one funds the game going forward,” claims Watkins. “Even the route of the big benefactor putting a lot of money in is being closed off, so every club’s facing a similar type of issue – how to put their club on a sound footing by running a business properly.
“Whether you’re a general counsel or a car park attendant, the price paid for financial instability is your job. The role of the lawyer, either in-house or external, is to help ensure the business survives. It’s interesting from my perspective to see the way in which general counsel numbers have grown and the different roles they perform at different clubs.”
Watkins, who moved his sports law practice from Clarke Willmott to Pinsents in October 2011, says his team can act as an extension of the work undertaken by in-house lawyers.
“One of the key things we’re working on at the moment is how clubs can utilise the new Fifa Fair Play regulations to adapt the business and give it a competitive advantage,” Watkins reveals. “Law affects everything, from building a stadium, buying or selling a club, buying or selling a player, investment, talking to consortiums and the league and securing media revenue streams and commercial rights.
“It doesn’t matter if you’re Middle Eastern, American, Russian or English, it all comes back to the same issue – the pound sign. If the leagues are steadfast and stick to their principles and apply penalties, those that are well-prepared will be successful.”
Watkins says he moved to Pinsents for its “global reach”, adding that most of his multimillion-pound transactions are with chairmen, chief executives, owners and directors.
He claims his team is a natural external extension to the work of the general counsel and that he enjoys a “symbiotic relationship” with a lot of clubs structured “in the right way”.
“A big challenge for general counsel, such as Simon Cliff at Manchester City, will be to see if they can adapt their model for long-term success,” Watkins muses. “Even Chelsea have recognised the need for structural change. There’s a correlation between spending a lot of money and bringing success – whether it’s sustainable is something else. These constraints mean that as a club makes more money, it can only carry a certain level of debt. Off the field, Manchester United’s still going to be the club to emulate.
“The role of the in-house lawyer isn’t just to look over contracts, but to have that legal understanding and knowhow of improving revenues and managing costs to drive the club forward.”
Watkins believes the potential reach of the Premier League brand will continue to see major investment and therefore an increasing demand for specialist legal knowledge in the game.
“Clubs should be considering appointing a general counsel if they believe it can add value to their business and if it’s structured in the right way,” he insists.
The 2011-12 Premier League legal chiefs
Aston Villa – Jo Price
Arsenal – Svenja Geissmar
Liverpool – Natalie Wignall
Manchester City – Simon Cliff
Manchester United – Patrick Stewart
Norwich City – Jamie Arnall
Sunderland – Margaret Byrne
Tottenham Hotspur – Darren Eales
West Bromwich Albion – Richard Garlick