Paul Scholes & A Conflict of Interest That Isn’t, Apparently

by | Feb 13, 2019

It’s May 2020. After having got promoted from the National League at the end of the previous season, Salford City have – as plenty of other have in recent years – found the step up into League Two at the end of the previous season to be bigger than they’d anticipated. Despite the money put into the club by their owners, they’ve struggled all season and now, on the last day of the season, they need a win from their match against Oldham Athletic in order to stay up. And it just so happens that the manager of the team that they’re playing on the last day of the season also owns a 10% share in their club and who would stand to lose of money should Salford be relegated back into the non-league game at the end of that day.

So, let’s be clear about one thing before we say anything else. No-one is suggesting that Paul Scholes will be involved in match-fixing, should Salford City get promoted into the Football League at the end of this season and end up having to play Oldham Athletic twice next season. The above scenario, however, is just one of a plethora that would raise serious questions about the integrity of the Football League. Regardless of the intentions of anybody concerned, such a match as that outlined above would be compromised. It’s not a matter of whether matches might get “thrown” or not. It’s a matter of the fact that professional football in England’s future health depends very much on its competitions being perceived to be free of any risk of any form of corruption. It’s the reason why football club owners aren’t allowed to be involved in the running of more than one club. Integrity is important, and rules involving conflicts of interest are meant to be preventative measure rather than anything else.

The holes in the Football League’s own rules on the subject, however, have been shown up this week by the appointment of Scholes as the manager of League Two’s Oldham Athletic earlier this week. On the pitch, he got off to a solid start last night with a comfortable four-one win against the moribund Yeovil Town, but that reasonably encouraging start to his managerial career has been somewhat overshadowed by the fact that he continues to hold a 10% share-holding in Salford City, the National League club with an array of wealthy Class of ’92 investors – including, as of a couple of weeks ago, David Beckham – and sights set very firmly on getting a place in the Football League come the end of this season.

A Football League meeting on Friday cleared Scholes to manage Oldham, ruling that his stake in Salford City could be disregarded as long as it is held “purely for investment purposes.” Their regulations 103-111 cover involvement in more than one club, and they state that “except with the prior written consent of the Board a person, or any associate of that person, who is interested in a Club cannot at the same time be interested in any other football club”. Having said that, though, their own rules contain several caveats that have raised eyebrows, not least regulation 104.5, which states that, “The holding of not more than 10 per cent of the share capital of any football club shall be disregarded for the purposes of regulation 104 provided that those shares are, in the opinion of the Board, held purely for investment purposes only.”

Scholes has been informed that he has to resign his directorship of Salford City, but that he can retain his shareholding in the club. This resignation hasn’t yet been registered on the Companies House website, though this will likely take a few days to go through. The reasons for surrendering this directorship should be obvious. Being a company director isn’t – or at least shouldn’t be – merely a box-ticking exercise. To act as a company director means assuming certain responsibilities towards said company. Directors are are responsible for the management of the company’s business. They make strategic and operational decisionsand are responsible for ensuring that the company meets its statutory obligations. These responsibilities aren’t something that can be glibly set to one side, either. The government’s own website confirms that, “You can hire other people to manage some of these things day-to-day (for example, an accountant) but you’re still legally responsible for your company’s records, accounts and performance.”

However, the whole “for investment purposes only” spiel contrasts with Scholes’ own words when he first became involved at Salford. As mentioned by Twitter account The Ugly Game in their excellent summary thread on the matter posted on Twitter yesterday, when talking the matter with the BBC in October 2016 Scholes told his interviewer that, “We are not doing it for a return on our investment”, which sounds like a somewhat unusual thing for someone who is just an investor to say. Then again, though, in the same interview, he also said that, “The thing that annoys us the most is when people or players from other clubs are saying we are paying £1,000 a week or £850 a week.” When Salford City made headlines from signing Adam Rooney from Aberdeen last summer, though, it was reported that Rooney would be earning around £4,000 per week.

Further regulations within this section of their own rulebook state, somewhat contradictorily, that the Football League must consider the overall wellbeing of the game when considering the matter of conflicts of interests (regulation 109), but that they also have the power to “relax or disregard” these regulations (regulation 111), although it doesn’t specify what the critieria should be in order for them to do so. As such, it’s difficult to reach any conclusion other than that none of these regulations are worth the paper that they’re written on, a feeling further accentuated by the fact that they’ve issued no official statement on the subject since the decision was made.

The Dubai-based Moroccan Abdallah Lemsagam, a former agent,took control of Oldham Athletic in January of last year, with wages having been paid late for three months in a row and a flurry of winding-up petitions having been raised by HMRC over the non-payment of tax. The club’s wage budget is said to have spiralled from around £1.4 million to almost £2.4m, despite ending last season in seventeenth place in League One, and wages had to be severely cut in order to meet Football League financial fair play regulations.

As such, Lemsagam has divided opinion amongst supporters at Boundary Park, and this feeling isn’t necessarily restricted to those in the stands, either. Speaking after his transfer to Mansfield Town last June, striker Craig Davies told the Manchester Evening News that, “With all the good at the club, I wish it well in an unclear future because I can honestly say in the fourteen years I’ve been a professional footballer, I’ve never worked for someone that thinks it’s acceptable to treat his staff and players in such a bad way.” With less than ringing endorsements such as this, it’s probably not that surprising that, having taken the team to a mid-table place in League Two despite the wage cuts, Frank Bunn was sacked by the club by email on Boxing Day, following a six-nil defeat against Carlisle United, after just six months in charge.

Last night’s win lifted Oldham Athletic to eleventh place in League Two, six points off a play-off place but in the middle of a morass of clubs which sees just ten points separate the team in fourth place in the table from Newport County, who currently sit in fifteenth place. As such, there is plenty still to play for, but there are also a lot of teams in that chasing pack, so it’s difficult to say where Oldham will end this season. Perhaps the Scholes new manager bounce will push them further up the division. In a division that is proving to be extremely competitive this season, though, it won’t necessarily be easy.

Indeed, on current form it’s unlikely that there will be a conflict of interests on the part of Paul Scholes next season as a result of Salford City being in League Two. Regardless of what’s happening with Oldham Athletic, the team’s form has been patchy of late, with a three-nil trouncing at Maidstone United in the FA Trophy last night coming off the back of a one-nil defeat at Braintree Town on Saturday. Maidstone and Braintree are currently the bottom two clubs in the National League, and Salford’s patchy form hasn’t seen them win in the league since the fifth of January, when they beat Leyton Orient away from home. At the time of writing, they’ve dropped to fifth place in the National League table, below AFC Fylde, Wrexham, Leyton Orient and the division’s surprise leaders, Solihull Moors.

Promotion remains a possibility, though, and should Salford City be promoted into the Football League the governing body could make the inevitable bad publicity that they’ll receive from all of this go away by merely requiring Paul Scholes to divest himself of his 10% shareholding in the club. It really is that simple. No-one is suggesting that Scholes is a crook (that Oldham was his boyhood team is well-documented, asides from any other considerations), but rules are in place over involvement in more than one club for a reason, and Scholes, a multi-millionaire from a lengthy career at the very height of European club football, surely wouldn’t be losing anything by giving up his shareholding in a club that is unlikely to make him much of a dividend as a shareholder in the foreseeable future anyway.

Should Oldham Athletic end up in the same division as Salford City with a part-owner of the latter in charge of the former, though, it will not be a strong look for the Football League, and they’ll only have themselves to blame should they end up looking like a body that pretended to act tough on potential conflicts of interests within their competition until they got starlight in their eyes. It’s their call, but there’s little reason to be optimistic that they’ll do the right thing when we consider their radio silence on some of British football’s worst ever club owners, such as those still in place at Coventry City or Blackpool. They always look after their own first, and the fans and the integrity of professional football seldom seem to play much of a role in this, when push comes to shove.