Football Governance Bill [HL]

Debate between Baroness Brady and Lord Pannick

Committee stage
Wednesday 18th December 2024 Lords Chamber

[Baroness Brady (Con)]

My Lords, I refer the Committee to my interests as detailed in the register. I support Amendments 187ZA and 187ZB, tabled by my noble friend Lord Moynihan, which propose a sensible and very necessary adjustment to the presumptions under- pinning the ownership test.

These amendments address an important issue in the Bill, ensuring that the ownership process is fair, reasonable and aligned with best practices in other regulated sectors. As my noble friend has said, as it stands, Clause 32(5) means that if the independent football regulator fails to determine an application for a new owner or officer within a set timeframe, the applicant will be automatically treated as unsuitable. This is a really problematic approach. It assumes that any delay is the fault of the applicant or reflective of their unsuitability when, in reality, delays can occur for many good reasons. Quite often, they are entirely outside the applicant’s control or, indeed, the control of the selling club.

Simple cases can, of course, be done quickly, but acquisitions of football clubs can be complex undertakings. Applications for ownership done well involve a detailed examination of financial records, governance structures and regulatory compliance. Imposing arbitrary deadlines does not speed things up; it just risks poor decisions being taken on very consequential issues without all the facts. Indeed, taking time to get it right is in the best interests of all involved: the club, the fans and the broader football ecosystem. To penalise an applicant simply because the IFR runs out of time is neither fair nor proportionate.

The Premier League allocates significant resources to operate its own owners’ and directors’ tests. I have spoken to it about this issue and, of course, so has DCMS. It has told me that the league sees no benefit whatever in arbitrary deadlines and has explicitly told the Government that unless this is staffed and resourced intensively, the IFR will almost definitely hit the deadline in a range of cases. Of course, this will be compounded by the fact that the Premier League will be running its own process without a statutory deadline, meaning the IFR would be ruling people to be unsuitable for no good reason while the league would still be performing its test. This is a recipe for chaos and, I am afraid to say, litigation.

This presumption of unfitness if a statutory deadline is not met could have significant unintended consequences. Let us imagine a scenario where a club is on the brink of critical ownership transfer—perhaps its survival depends on transferring the ownership—and the only prospective buyer is deemed unsuitable purely because the IFR failed to meet its deadline. In the last Committee debate, the Minister said:

“Although the risk of clubs going into administration will be greatly reduced, it may still happen”.—[Official Report, 16/12/24; col. 54.]


For a club to go into administration because the regulator has not met its deadline would be unfair, and catastrophic for its supporters. Even if it did not result in immediate administration, it could leave the club in limbo, unable to secure necessary investment and potentially sliding into financial difficulty or worse.

This issue is not confined to the immediate impact on clubs. There are also wider reputational and practical implications for prospective owners and officers. Being deemed “unsuitable” by default could carry consequences far beyond football, affecting their credibility and standing in other sectors. That is not how a fair and just regulatory process should operate.

The amendments before us propose a simple but important correction. By reversing the presumption, they would ensure that applicants were not unfairly penalised for delays that were outside their control. Instead, if the IFR fails to make a determination within the specified timeline, the applicant would be treated as suitable by default. As my noble friend Lord Moynihan said, that is much more aligned with practices in other regulated sectors. For example, in merger control, if the Competition and Markets Authority fails to make a decision within the statutory time limit, the merger is automatically allowed. That ensures that the time limits are meaningful but that regulatory delay does not create unnecessary barriers or unfair outcomes.

It is important to emphasise that this amendment does not undermine the integrity of the ownership test. The IFR will still be able to make a determination based on the suitability of the applicant, but it will no longer have the ability, in effect, to penalise applicants or clubs because of its own delays. It would, in truth, be far better not have a timeframe at all, for the reasons I have outlined. However, if there is to be one, we must reverse the presumption and place incentives in the right place.

I hope the Minister will recognise the value of these amendments, and the much greater fairness and reduced risk they would bring to the process. It is a small but crucial change that will help ensure the ownership process operates in way that is both reasonable and just. I urge the Government to give the amendments the consideration they warrant.

[Lord Pannick (CB)]

My Lords, I support the noble Lord, Lord Moynihan, and the noble Baroness, Lady Brady, in this matter. It cannot possibly be fair to have a regulatory system in which, if the regulator does not perform and reach a decision within the specified time, for reasons that are not the responsibility of the applicant, the application fails. That is plainly unjust and, as the noble Baroness, Lady Brady, says, it is contradictory to the approach adopted in competition law, where the regulator has short time limits and must comply with them. The alternative is to have a more open-ended system, whereby the regulator can take more time if it is necessary to do so in exceptional circumstances.