Football Governance Bill [HL]

(Limited Text - Ministerial Extracts only)

Consideration of Commons amendments and / or reasons
Tuesday 15th July 2025 Lords Chamber

Moved by

[Baroness Twycross]

That the House do agree with the Commons in their Amendment 1.

1: Clause 53, page 42, line 8, leave out “leviable functions” and insert “functions under this Act”

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)]

My Lords, with the leave of the House, in moving this Motion I will also speak to Amendments 2 to 62.

I tried very hard to avoid the overuse of football metaphors or puns at the earlier stages of the Bill but, despite the Bill having left your Lordships’ House previously, I think we can say that we did think it was all over, and I sincerely hope, with your Lordships’ agreement, it almost is now.

Over the course of the passage of the Bill, we have heard concerns about the risk posed by the distributions mechanism outlined in the Bill. I thought that the original model had its merits. However, as I committed to do on Report and at Third Reading in your Lordships’ House, the Government have taken another look at the mechanism and in response have made a series of important amendments in the other place.

The Government are grateful for the careful and considered scrutiny from noble Lords across this House, which was invaluable in the development of this new model. I take this opportunity to again put on record my particular thanks to the noble Lord, Lord Birt, for his extensive and thoughtful work in providing such scrutiny. I know that he was sorry not to be able to be here in person today, but I also know that he will be well represented by his Cross-Bench colleagues. I thank the noble Lords, Lord Burns and Lord Pannick, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for the expertise they have provided over the last few weeks.

The amendments we have made alter the distributions model through changes to Part 6, alongside supporting amendments to other clauses. These are primarily designed to change the mechanism from the previous binary choice mechanism to a new “staged regulator determination” model. This new model is designed to give more certainty to parties while ensuring that the backstop is designed to reach the best solution possible for all of football.

I will briefly explain how the amendments achieve this goal. First, the amendments introduce two new clauses. Clause 61 has been replaced with a completely redesigned proposal process. We have been clear that our strong preference is for the leagues to reach an independent distributions solution without the need for the backstop to be triggered.

Since the Bill was last before this House, the Government have announced David Kogan as our preferred candidate to chair the regulator. I know that David Kogan shares this view that the backstop should be triggered only as an absolute last resort, and our new proposal stage has been designed to incentivise that. If the backstop process is ever triggered, the regulator would invite the leagues to submit proposals detailing their solutions to the questions for resolution. The leagues would then submit their proposals to both the regulator and to each other. This will allow for more constructive negotiations, as the leagues will be more informed regarding each other’s position on core issues.

The leagues would also be able to submit revised proposals, ensuring both sides have the best chance possible to outline their position to the regulator, and, in turn, allowing the regulator the opportunity to request additional relevant information. This structure will ensure that the regulator is in the position to make the best possible evidence-based decision, while incentivising the leagues to make their own agreement.

We have replaced Clause 62 to introduce more flexibility for the regulator. Our new clause removes the binary choice for the regulator. Instead, it sets out how the regulator can create its own distribution order if, after all previous stages have concluded, the leagues still cannot strike a deal.

In the creation of this order, it can choose all of a league’s proposal or part of either or both proposals, or can propose unique solutions based on the evidence. The regulator would first have 60 days to create a provisional order. The regulator would share this provisional order with the leagues and invite representations, which it must consider before finalising the order. Any finalised order that it produces would have to take into account any relevant issues raised by the “state of the game” report, the evidence the regulator has gathered throughout the process, its engagement with the leagues and any proposals that they have submitted. Finally, under the new model, the regulator would be required to consult the FA before setting the questions for resolution, ensuring that the national governing body can now raise any views about the scope of the backstop process.

We are confident that the regulator, with its clear objective to promote sustainability and its duties to avoid adverse effects on growth and sporting competitiveness, would come to a balanced solution. I know that there is probably a slight variance with models that noble Lords view as ideal. However, I am confident that this new model is the right one, and I hope that noble Lords will support it as being substantially better than the original model that we debated earlier in the Bill’s passage through your Lordships’ House.

In addition to the changes to the backstop, we have also made some minor and technical changes to other parts of the Bill to aid the implementation and effectiveness of the regulatory regime and reduce the burden on the industry. I am happy to answer any questions noble Lords have on these changes. I hope that noble Lords understand and can support the changes that we have made in the other place. They have been arrived at after much careful consideration and conversation with noble Lords and the industry, and will ensure that the regulator can best deliver for fans. We believe the changes strengthen the Bill and will strengthen the regulatory model.

This Government promised in our manifesto to safeguard the future of our national game. In fact, as all noble Lords will be aware, the commitment to establish an independent football regulator was in the manifestos of all three main parties at the election a year ago. I hope that noble Lords will support this much- needed piece of legislation, which delivers on that commitment by protecting and promoting the sustainability of English football in the interests of fans and the local communities that football clubs serve. I beg to move.

[Lord Burns (CB)]

My Lords, I am very grateful to the Minister for introducing these amendments and for setting out the reasons behind them. On Report in March, the noble Lord, Lord Birt, introduced a series of amendments. These were aimed at addressing what he regarded as some weaknesses in the role of the independent football regulator in the distribution of funds between the various football bodies. I supported the amendments, along with the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Pannick.

Unfortunately, neither the noble Lord, Lord Birt, nor the noble and learned Lord, Lord Thomas, can be here this evening, and I have been asked to respond jointly for our little group, in place of the noble Lord, Lord Birt. The noble Lord, Lord Pannick, is in his place, I am pleased to say, and I hope that we will hear from him in due course.

Throughout debate on this Bill, we have emphasised the uniqueness of this situation. Under the proposed legislation, a regulator could potentially make decisions to transfer income from one regulated body to another. Moreover, both bodies are part of the same football family and they must coexist. Many clubs could find themselves moving between the Premier League and the English Football League. We argued that the arrangements should take these factors into account, including the objective of the overall success of the football pyramid.

We are very grateful to the Minister for the time that she has spent on this since then. Subsequently, the Government have brought forward their own amendments, which were agreed by the Commons and now come to this House today. I think I can say that as a group we support these amendments. While they are not entirely as we hoped, they address many of the concerns we had with the original Bill and go some way towards meeting the tests that are involved.

The most significant change is the fundamental re-engineering of the backstop process. This removes the Russian roulette binary mechanism, where an expert panel would have chosen between the final offers of the two parties, without the option of finding middle ground. Instead, the regulator now has the driving seat in both the negotiation and the determination process. The amendments strengthen the role of the “state of the game” report and modify the principles and criteria to explicitly refer to the regulator’s duties as well as its objectives. While it does not go as far as we hoped, it is an improvement and it means that, if the regulator is called on to decide, it will consider domestic and international competitiveness, growth and investment in the industry. I think that is a significant step forward.

We are confident that David Kogan, the preferred candidate to be chair of the IFR, will be able to make these arrangements work. He has exceptional football knowledge and expertise. Following the publication of the “state of the game” report, we hope that the regulator will set out its views about the most significant challenges that are faced by the leagues covered by this process. At the same time, we hope that the regulator will set out the criteria that it will apply in determining the appropriate funds flow down the pyramid. Overall, I am satisfied that this leaves us in a much better position than when we last discussed the Bill, and we support the amendments.

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[Lord Markham (Con)]

I too start by declaring my interest as a Chelsea season ticket holder, and while I will not speak too long about Chelsea’s Club World Cup success, I will note that three of the four big European and world tournaments were won by English clubs—I can even say that half of them were won by Chelsea. We can see that we currently have a very successful game. Also, four of the starting 11 were English players and one, Cole Palmer, was the player of the tournament and even had President Trump celebrating alongside him. If only we could teach him to do the Palmer rub, we would really be there.

So we start off in a good position, and I have to add my thanks to the Minister. I think she took some political risk in bringing back amendments to the Lords when everything had obviously passed here already, and opening this up to possible further challenges and ping-pongs. She did that because she thought it would make this a better Bill, and I support everything she was trying to do and the intentions behind that, because I think it has made it a better Bill. While I agree with both my noble friends, the two Lords Moynihan, that there are dangers in the introduction of a regulator, and with my noble friends Lady Brady and Lord Maude that we need to ensure that it is a light-touch regulator, this is an improvement—but there are dangers still out there. I think we all remember the long conversations we had about the risk of UEFA, and we need only to look at the last few days, with the demotion of Crystal Palace, to see that we have to be sure that we are not doing anything here that falls foul of UEFA.

The Minister was at pains to confirm that UEFA was on board with the last version of the Bill. What we see now is, of course, quite a different version in terms of the backstop. It is a better version, particularly with the removal of what we all thought was a fairly crazy pendulum mechanism. However, it allowed the Government to say at the time, keeping to one of the UEFA golden rules or red lines, that a decision has to be a football decision. In the past, it can be said of the pendulum that it was either an FAPL or an English Football League solution. Now that the regulator is able to negotiate to find its own solution, which is very sensible measure that I support, UEFA could argue that we are now imposing a potential government solution. It is the right approach to take, but has the Minister sought similar assurances from UEFA that this new backstop does not fall foul of some of its red lines, and that it is as comfortable with this new version as it was with the old version?

That said, this is a better version, and I thank the fab four Cross-Benchers for bringing together this solution. I am sorry that both the noble Lord, Lord Birt, and the noble and learned Lord, Lord Thomas, are not in their usual places to take their laps of honour. It is a sensible amendment which tries to lead to a negotiated outcome with compromise, rather than the arbitrary pendulum mechanism.

At the same time, it is very sensible—and I know David Kogan was very involved in this—that the regulated board are now responsible for the decision, with the removal of the expert panel, and they are willing to be accountable for that decision. I have known David Kogan for some 15 years and, like others, I truly believe that we have a real expert with deep knowledge of the game and sports rights; he is a valuable addition. As so many of these issues are judgment calls, I feel much better knowing that we have David Kogan’s judgment. We all have to accept that the appointment process was perhaps a bit unfortunate. Can the Minister say where we are with the investigation, and when can we expect an outcome? Obviously, we would all like to get him on board as quickly as possible.

I conclude by thanking the ministerial team, the Bill team and all noble Lords for their work during what has been a long, thoughtful, informative and good process, which has ultimately improved the Bill. I look forward to hearing the Minister’s reply.

[Baroness Twycross (Lab)]

I thank all noble Lords for a constructive and good-natured debate on the amendments made in the other place and for their very kind comments, not least from the noble Lord, Lord Markham, recognising why I took the risk to bring the Bill back, which was to ensure that we get a better Bill. I am very grateful to the noble Lords, Lord Burns and Lord Pannick, and noble Lords from across your Lordships’ House, including the noble Lord, Lord Goddard, and the noble Baroness, Lady Brady, for their support for changing the backstop mechanism. I am grateful too for the support for, and confidence across your Lordships’ House in, the Government’s preferred candidate.

The noble Lord, Lord Pannick, is right that we need to see the regulator as taking a light-touch approach, and I am grateful to all those involved in helping us get this over the line in a much more match-fit state than it left us. I note the concerns of the noble Lords, Lord Maude of Horsham, Lord Moynihan and Lord Moynihan of Chelsea, and the noble Baroness, Lady Brady. I will send a transcript of the debate to the chair designate, although I am confident that he is following the debate and is already aware of the need—and their call—to tread lightly.

The noble Lord, Lord Burns, asked how we would incorporate evidence from the “state of the game” report. Under the amended model, it would be explicit that the regulator must use the “state of the game” as the basis for its decision. The regulator must explain in its notice how its solution addresses the evidence from the “state of the game” report. Leagues must also submit supporting evidence alongside their proposals, which the regulator must take into account. The regulator can request additional evidence as well as gathering its own information to ensure it has a wide evidence base for making a decision. This is a more evidence-based and data-driven process than before. We are also proposing an extension of the final proposal stage to allow for more time for the regulator to come to a considered solution based on evidence.

The noble Lords, Lord Moynihan and Lord Markham, asked whether UEFA is content with the Bill as it stands. As noble Lords will know and as I have stated previously, UEFA has written to confirm that it is content with the Bill and the FA has confirmed it. Its issues were with the previous Government’s version of the Bill and requiring the regulator to have regard to the Government’s foreign policy, something we have removed and something your Lordships’ House clearly debated at some length.

Past examples of Italy and Spain legislating in relation to football broadcasting without facing repercussions from UEFA should offer reassurance. Italy in 2008 and Spain in 2015 legislated setting out how TV rights are to be sold and how the revenues are to be distributed. Neither association has faced consequences from UEFA. I will return to exactly where we are with the process a bit later.

[Lord Moynihan (Con)]

I do not want to prolong this at all except to just place on the record that both the examples the Minister has given us are totally different and in fact reflected the model that the Premier League had in place, which was effectively a non-legislative agreement. Just for the record, we need to be clear that the very short legislation introduced in both those countries did not bear any resemblance whatever to the substantive Bill before us.

[Baroness Twycross (Lab)]

Appreciating the noble Lord’s point, I can confirm that UEFA is content with the Bill as it stands.

I am going to return to the question from the noble Lord, Lord Markham, on where exactly we are with the chair’s appointment. The lines I have in my pack do not entirely reflect his question, so I will try to answer it rather than just use the line in the pack.

In closing, I thank several noble Lords who have been involved throughout the passage of the Bill. In particular, I thank my noble friend Lord Bassam of Brighton, who was not able to be here today, and my noble friends Lady Taylor of Bolton, Lord Faulkner of Worcester and Lord Grantchester. I also thank a number of Labour Back-Benchers who have been really restrained at various points in what has been a very long process, by rationing their contributions to try to get the Bill to move forward. As noble Lords are aware, most noble Lords—probably with the exception of the noble Lord, Lord Addington—are absolutely passionate about the game, so to not contribute as much as they wanted was quite painful for a number of them.

I particularly thank my noble friend Lady Blake of Leeds for the excellent job she has done in supporting me, which continues now, and officials whose patience has been outstanding, and I was pleased that this was noted by noble Lords from across your Lordships’ House. They have worked with me, the Minister for Sport, the Secretary of State, stakeholders and many noble Lords to redesign the backstop over the past few months.

I also thank the noble Lords on the Opposition Front Bench, the noble Lords, Lord Parkinson of Whitley Bay and Lord Markham. It is always a pleasure to face them across the Dispatch Box—occasionally, I might have wished it was slightly less late into the night. I particularly thank noble Lords on the Liberal Democrat Front Bench, the noble Lords, Lord Addington and Lord Goddard of Stockport, not least for their good humour and constructive approach to raising and resolving their concerns, and the noble Lord, Lord Addington, who took the time in his contribution today to focus on the fact that this is about how football speaks to local communities—that is at the heart of why the Government have pursued this.

I am particularly grateful to the noble Lords on the Cross Benches, particularly the A-team of the noble Lords, Lord Birt, Lord Pannick and Lord Burns, and the noble and learned Lord, Lord Thomas of Cwmgiedd. They raised issues that made us pause to consider. I was sorry we were not able to bring back amendments before we got to Third Reading, and I hope noble Lords understand why this was. We are keen now to make sure that the football regulator can get on with the job.

--- Later in debate ---

Moved by

[Baroness Twycross]

That the House do agree with the Commons in their Amendments 2 to 62.

2: Clause 53, page 42, line 13, leave out “leviable functions” and insert “functions under this Act”