AN ABSOLUTE SCANDAL

United have released a statement into their enquiry into the club’s transfer dealings. It revels £13.4m has been paid to various agents in transfers within the last THREE years alone. Many of those payments were to Jason Ferguson’s Elite agency.

£13.4m is the equivalent of well over 30,000 season tickets in K-Stand at 2001 prices. Is it any wonder the cost is increasing year-on-year? That many of these fees have been spent on the likes of Veron, Forlan, Ferdinand, Taibi, Kleberson and co only makes it worse.

United today released details of the internal inquiry into recent transfer dealings and also announced that they were ending their relationship with Jason Ferguson's Elite Sports agency.

Club press release:

Internal Review of Player Trading

On 26 January 2004, the Board of Manchester United PLC announced that it would conduct a thorough internal review of recent transfer dealings ("the Review"), looking at its internal processes and the role of agents, committing to publish and implement any changes or improvements required from this Review before the next transfer window.

Scope of Review

The Review covered 21 transfers involving Manchester United (the "Club") in the period January 2001 to January 2004. Of the 21 player transfers, 4 involved no agent. The transfers reviewed were for gross transfer fees of £158 million, with agent fees of an additional 8.5%. The review included interviewing relevant agents as well as staff and advisers involved in the transfers.

The Review did not consider, on the grounds of agent fee materiality, another 12 transfers in the period. Total payments to agents on these excluded transfers were £336,000.

Documentary Compliance
The Board is satisfied that its established internal process to approve transfers has been adhered to throughout the period. The Board has concluded that all the documentation required on the completion of a transfer (including transfer contracts, agency contracts and player contracts) has been completed in accordance with the FA and FA Premier League rules.

All payments to clubs and agents were passed through the FAPL (for domestic transfers) and FA (for international transfers) in accordance with the rules.

The Club has not been in a position to obtain any documentation as part of this Review to establish whether the recipients of fees and commissions from the FAPL/FA shared or passed on the fees to other parties. The regulations do not require clubs to ascertain whether the original recipients share or pass on fees earned.

All payments to agents are included in the annual reports (schedule D) submitted to the FAPL in accordance with the regulations. This report is signed by each Director of Manchester United Football Club Limited and reviewed by independent external auditors in accordance with FAPL regulations and must be submitted to the FAPL within 10 months of the end of the financial year.

Role of Agents
Licensed football agents have a role to fulfil in assisting transfers but over the years there have been inquiries into the services they provide and allegations of malpractices throughout the game. In particular there is no obligation under FIFA/FA rules for an agent to disclose if he intends to pass on commission to other parties.

The Review has identified the need for greater clarity in relation to the appointment of agents, particularly in terms of their role and remuneration. This has led to the introduction, by the Board, of tighter internal procedures (described below).

There has been some press speculation in relation to certain transfers and to the role of certain agents. In the light of the Review, the Board would make the following comments.

In relation to the transfer of Kleberson in August 2003, Jorge Gama, a FIFA licensed agent, was appointed Club agent, signed the forms and acted as the main intermediary between the Club, the player and the player's former club Paranaense.

The Review however identified a letter, dated 10 July 2003, to Paranaense, which stated that Ian Hetherington, who was not a FIFA licensed agent, was authorised to discuss the transfer on behalf of the Club (although he was never actually appointed as Club agent). Hetherington works in association with Jorge Gama and had explained to the club that he was about to obtain his FIFA licence. The Club has sent the letter of 10 July to the FA.

The transfer of Tim Howard from MLS cost a total of £2.3m. This included an agent's fee of £0.7m paid to Gaetano Marotta, as Club agent. Marotta, who is FIFA licensed, assisted the Club in the transaction, including liaising with the player's own agent in the US, Sportsnet. Although the agent's fee was large, as a percentage of the overall deal, the Board believes that the total cost represents good value for the Club.

Our enquiries have led us to believe that the agent's commission on this transfer was shared with other parties (though we have no documentary proof that this has happened). The Review has not identified the redistribution of any payment to anyone employed or connected with the Club.

However in the future, to ensure we protect the Club from such allegations, we will ask for a declaration from the agent that they have no direct or indirect
relationship with anyone at the Club.

The Review has specifically examined the role of Elite Sports, of which Francis Martin (a FIFA registered agent) and Jason Ferguson (son of Sir Alex) are directors. The Board has received assurances that Mike Morris (another FIFA registered agent) is not involved in either the management or ownership of Elite.

Elite was employed by the Club on one transfer, that of Roy Carroll from Wigan (agent fee paid £300,000) in 2001. It also represents 13 players currently with Manchester United and the Club has paid fees, to Elite, for contract renegotiations of £237,000.

It is the Board's understanding that Elite has also earned fees from the acquiring club in the sale of Jaap Stam to Lazio and the loan of Ricardo Lopez to Racing Santander. In the transfer of Jaap Stam, Mike Morris acted for the Club and was paid £750,000.

In no other transfers has the Board found any evidence of payments being received by Elite in respect of Manchester United transfers. Elite was not involved in the transfer of David Bellion to Manchester United, which was handled on behalf of the player by Mike Morris. Based on this review the Board is satisfied that there are no untoward issues between Elite and the Club.

Nevertheless, the Board recognises the concerns over the connection between Elite and the Club Manager, Sir Alex Ferguson. In future Manchester United will not employ Elite Sports to act for the Club and, to the extent Elite acts for a player or another club in negotiation with the Club, will publish full details of its role in any such transaction.

Increased Transfer Disclosure

The Board has already moved towards increasing transparency in this area. All future Stock Exchange announcements of player transfers will separate out the transfer fee from the FAPL levy and agent's fees, as was done with the transfer of Louis Saha from Fulham in January 2004.

The Annual Report will disclose the total value of agents fees charged directly to the profit and loss account and the total value of agents fees capitalised as part of intangible fixed assets of player registrations.

Internal Procedures

Following the Review of these transfers, the Executive Directors have recommended to the Board revised procedures which have been communicated internally and introduced with immediate effect.

These revised procedures will include:
- New restrictions on responding to unsolicited approaches by agents
- Improved record keeping and documentation in relation to discussions
with clubs and agents
- Tighter rules on the appointment of agents
- Stricter limits on the remuneration of agents

Sir Roy Gardner, Chairman of Manchester United plc, commented:

"This has been a far-reaching and thorough review of transfers over the past three years. I am satisfied that we have complied with the relevant regulations, but accept that there are things we could do better to protect the reputation of the Club. With that in mind, we have introduced improved internal controls and are confirming our commitment to greater transparency in transfer dealings."