Football Governance Bill [HL]

Baroness Grey-Thompson Excerpts

Committee stage
Monday 16th December 2024 Lords Chamber

[Lord Addington (LD)]

My Lords, it might be convenient for me to say a few words on this. Primarily, I am drawn to the amendment from the noble Lord, Lord Bassam, for the reasons he gave. We have heard that this is a wonderful, successful league. Bits of it are but, unfortunately, those are the bits at the top. Most of the cultural capital, I am afraid, is in the less glamorous clubs with less successful balance sheets.

We have a situation where we want to maintain the whole of the football structure: five leagues. This has proven to have—let us say—attracted financial irregularity; I think it was described as “chancers and fantasists”. We have to do something to stop this or we will start to have more disasters that mean something to the fan base.

The amendment from the noble Lord, Lord Bassam, starts to address this. I hope that the Government are far more in tune with that amendment than with some of the others in this group.

[Baroness Grey-Thompson (CB)]

My Lords, I rise briefly to speak to Amendment 128. We are getting to the crux of what this regulator should be about: making sure that there are sensible financial decisions, and that risks are mitigated so that they do not jeopardise clubs’ futures.

Clubs in the EFL are expected to lose around £450 million this season and are reliant on owners to fund the shortfall. If this funding is not forthcoming, it can lead to financial trauma. Only 66 of the 92 clubs that filed accounts for the 2021-22 season included data on wages and cash reserves. Nottingham Forest spent £58,606,000 on wages but had just £25,000 in cash reserves—five hours’ worth of reserves. Surely that cannot be acceptable.

[Lord Moynihan (Con)]

My Lords, I will speak to the amendments standing in my name in this group. I apologise to my noble friend Lord Maude if I address some of the plethora of regulations, conditions and verbiage concerned. I am proposing a number of amendments that I hope will facilitate and ease the position that the Government face in this context.

I turn to my Amendment 169A. It is unclear from my reading of the licensing section of the Bill whether the IFR is expected to produce a detailed and granular set of financial rules that would be applied in a blanket way to a large class of clubs or leagues; examples include the specific liquidity ratios, the debt-to-equity ratios, operating cash-flow metrics and size of financial buffers. Or will the IFR take an entirely bespoke approach, where every club will have DLCs—discretionary licence conditions—applied according to their own circumstances? That would drive a coach and horses through the competition organiser’s ability to provide a level playing field and maintain competitive balance. The third option is that the IFR could take an outcomes-based approach whereby it produces some high-level guidance with clear outcomes that clubs must achieve and league rules sitting underneath, giving effect to these principles and outcomes. For example, the IFR could have a series of outcomes relating to working capital, transitionally financed balance sheet health, resilience, protection of assets, et cetera. Leagues could colour in these outcomes into rules.

My own strong preference is for the third option. This amendment, which characterises the third option, is designed to create space for that conversation and, hopefully, allow the Minister to say that, where existing sustainability rules are in place and working, there will be an opportunity for that kind of league-led approach at all levels within an overall regulatory framework. Therefore, my recommendation is an outcome-focused, light-touch regulation, with step-in powers where issues are identified. That is why I have drafted Amendment 169A.

I turn to my Amendments 167A, 168A and 168B. The current test for attaching and varying a discretionary licence condition sets an extremely low bar for the IFR. For example, it seems to me that the test could be met in the case of a club that is already meeting the threshold requirement, on the basis that a discretionary licence condition somehow contributes to the club continuing to meet it.

The DLC test is even vaguer as regards the systemic financial resilience objective. The DLC needs only to advance that objective. While not necessarily the intention, this risks a very unpredictable, wide-ranging and open-ended power that could have a serious impact on club finances. It is also an issue that can be easily mitigated, while still allowing the IFR to meet its objectives. Again, I seek simplicity on behalf of the clubs. I am really concerned that here the detail is so great that it will swamp some clubs.

In the current drafting, potentially the only check on endless interventions, by way of DLCs relating to the systemic financial resilience objective, will be either the IFR’s discretion—in other words, the IFR deciding it has done enough for now—or the IFR being forced to have regard to avoiding adverse effects building up as a result of excessive intervention. Neither of those seems adequate to mitigate the significant risk to English football at all levels. I acknowledge that there is discretion for the IFR to not act in this way. However, I do not think there should be an option to do so, given the very significant risks to English football that would come with the powers being used in this way.

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[Lord Evans of Rainow (Con)]

My Lords, I will speak briefly on Amendment 129 in the name of the noble Lord, Lord Mann. It is relevant to Amendment 93 which, your Lordships may recall, requires the new regulator to regulate football agents. My motivation for that amendment was to try to keep transfer fees within football. As I mentioned, it is very important that the grass-roots clubs that develop the players of the future get their fair share.

The amendment tabled by the noble Lord, Lord Mann, setting out all financial arrangements with external agents and other intermediaries involved in contracts, recruitment or both is an interesting one. My only question is: how will this work in practice? How will the regulator deal with highly confidential multi-million-pound transfers? The noble Lord mentions it being private and confidential and therefore not public, but potential leaks could affect these deals. What would the regulator do? How would he operate? How would he stop or block those transfers? The Premier League still has the best players. We still want to attract the best players. It is vital that we get this right to avoid the trap of unintended consequences. It is so important to protect the international reputation of the Premier League.

My amendment was tabled to ensure that no matter where the transfer comes from, that money stays within football. However, we would have to be careful about how that happened in practice.

[Baroness Grey-Thompson (CB)]

My Lords, regarding Amendments 150, 152 and 164, I will not repeat what has already been said about community assets. I will speak just to my Amendment 248A, which probably counts as a miscellaneous amendment. It is a probing amendment, strong concerns having been raised by the Supporters Trust at Reading. It seeks to insert a new clause, after Clause 51, on ticket pricing, meaning that regulated clubs would have to adhere to the following rules: dynamic pricing strategies being prohibited, concessionary tickets being mandatory and ticket prices for away fans being kept at the level set out in regulations by the Secretary of State. It is a simple amendment, but I suspect that it will not be universally supported.

I understand why clubs want to use dynamic pricing and how it can be used very successfully, but this amendment seeks a more fan-inclusive approach. The Supporters Trust at Reading quoted the Early Day Motion tabled in September 2024, when 19 of the 20 2024-25 Premier League clubs increased their ticket pricing. Abolishing or reducing concessionary tickets would be very bad news for older or younger fans who felt the effects of the cost of living crisis harder than most. Also, Fair Game has said that the constant rise in ticket prices has priced long-standing fans out of the game and that there should be proper consultation with supporters to address their concerns.

I do not seek to open the debate on what a fan is, but this amendment is about giving consideration to how fans can be engaged in discussions about ticket pricing. I am expecting many noble Lords to tell me that this is too interventionist and that it will limit clubs too much, but I am interested to hear the Minister’s response.

[Lord Addington (LD)]

My Lords, going through this long list of amendments, I think that we can all agree that “miscellaneous” is a good description of this group. On what is a competition, I added my name to one of the amendments, but probably should have added my name to the one about heritage. Is it a ground part of the heritage, is it part of the structure, is it what is going on? I should have put my name to this and look forward to the Minister’s reply. If we do not include this, we are missing an important part of why this Bill is justifiable.