Football Governance Bill [HL]

Debate between Lord Goddard of Stockport and Lord Markham

Committee stage
Monday 9th December 2024 Lords Chamber

[Lord Markham (Con)]

I rise to speak to my amendment to Clause 71 on financial redistribution, and to add to the very valuable points made by my noble friend Lady Brady.

What the Bill seeks to do—which I have not seen in relation to any other regulator in the UK—is to give the regulator unprecedented powers to take money from one part of the sector or certain companies and give it to another. In any other field, this would be unheard of. Can you imagine the FCA saying, “I think HSBC should give some money to Barclays”? Can you imagine Ofwat saying to Severn Trent, “Thames Water is having a bit of a hard time, can you help it out”? Can you imagine Ofcom saying that Sky should help ITV out where advertising revenues are going down? That is unheard of among regulators.

I value the days in Committee as there is such knowledge around the House, so I would love it if any noble Lord could come up with an example of where a regulator has got the power to take away money from a part of the sector or company and give it to another. I would love to hear it.

[Lord Goddard of Stockport (LD)]

On the noble Lord’s point, can he explain to me what happened to the banks when the financial crash came and they ran out of money, or the money was disappearing? Who stepped up then and financed all the banks? The Government did. That was an example of rebalancing and ensuring that the money supply could keep going throughout—that is why they did it.

This Bill will ensure that the rest of the pyramid can survive and carry on. One document I read today says that in 2022-23,

“20 members of the Premier League and five … in the EFL … received 92% of the distributable”

wealth—£3 billion—while

“the other 67 professional clubs”

got £245 million. Is that fair?

[Lord Markham (Con)]

That goes right to the heart of this conversation. I can point out loads of industries where there are only one or two top companies. Think of the share of the search revenue that Google has. Is that fair? Is it the role of a regulator to get involved and say, “Oh, Google, you should give some money to Bing, because it’s not doing that well”? That is exactly my point.

The noble Lord made a point about the banking sector. The Government stepped in there because they felt that there were wider consequences for the whole economy. They stepped in; they did not say, “Barclays, you should give some money to HSBC”. What we are talking about here is fundamentally different. It is a different set of regulatory powers that I do not think anyone has seen—

Football Governance Bill [HL]

Debate between Lord Goddard of Stockport and Lord Markham

Committee stage
Monday 2nd December 2024 Lords Chamber

[Lord Goddard of Stockport (LD)]

I support the noble Baroness, Lady Brady, in what she and the previous speaker have said and in all the work that she does. It is all there in the Deloitte report on the Premier League. The Premier League has missed a trick; the pages of the report show where the money goes and how it is spent, and it is all very laudable. Premier League football clubs, independent of the Premier League, do great schemes as well. Manchester City’s City in the Community started in 2003 with no funding from the football club, apart from one officer and that was Alex Williams, an England goalkeeper, who has just retired after doing 20 years at City in the Community. That is an example of the social responsibility of football clubs.

The reasoning behind these amendments, even though they may be just probing amendments, is that those things that can be given can be taken away. If football clubs in the Premier League fall on hard times and things have to stop being done, they may stop doing the things they do not have to do, and that effect will invariably come down to the poorest parts of the pyramid.

All we are trying to say with these amendments is: let us acknowledge the social responsibility that the Premier League has and the Premier League football clubs deliver but let us give the regulator the ability to ensure that that carries on. My noble friend is not being prescriptive and saying, “You should all pay that much”, but he wants to ensure that, to avoid unintended consequences, football clubs do not suffer in the event that some Premier League clubs or the Premier League itself cannot deliver those benefits in future years. I have no reason to think that will happen, because the Premier League is getting bigger and going global and more money is coming in, but that is the point of the fan-led review. How many football clubs did the review show were one match away from disaster? That why we are looking for a regulator. Sometimes the unintended consequences are too dire, especially for smaller clubs.

[Lord Markham (Con)]

Like others, I have a dilemma, in that I am mindful that the noble Lords, Lord Addington and Lord Bassam, and the noble Baroness, Lady Taylor, are well intentioned and, on the whole, I agree with what they are trying to do. However, like others, I feel that there is the danger of mission creep. This is another area—we will be speaking about others later tonight, and over the next few days there are other areas that we will be adding—where each one on its own might not feel like a lot, but if we add layer upon layer, we move far away from the original intention of being a light-touch regulator and towards one that becomes overbearing.

It has been an education, probably for all of us, to hear, as my noble friend Lady Brady was saying, about the good acts that the Premier League is doing with local communities through local football clubs. There is probably more that can be done to make sure that the awareness of those, as the noble Lord, Lord Goddard, was saying, is enhanced and greatened.

Generally, the idea, as my noble friend Lady Brady was saying, of having a meeting with the noble Lord, Lord Addington, and the Premier League to see how that can be more fostered, encouraged, known about and channelled is probably the right way. Where things are working, I much prefer the use of the carrot than the stick.

Football Governance Bill [HL]

Debate between Lord Goddard of Stockport and Lord Markham

Committee stage
Wednesday 27th November 2024 Lords Chamber

[Lord Goddard of Stockport (LD)]

The simplistic argument is, “Well, I can just sell a player”. Actually, you cannot just sell a player. We have a one-month window in January and the end of the season. If it is mid-October and that happens, you cannot sell a player. What do you do then? That is the point. You cannot run a football club on a shoestring because it makes them competitive. That is not the name of the game. The noble Lord’s argument seems to be that if we give them all the money, they will not try their hardest anymore. That is fanciful; it is not true. Football clubs need to be sustainable. They need to be able to pay their way. I could not buy a car if I could not afford the deposit. I could not buy a Rolls-Royce tomorrow saying, “I’ll give you the deposit, but I don’t have it with me today, so give me the car and, when I do quite well, I’ll give you the money”. That is not how life works. Football is a business like every other business. The noble Lord seems to want it to run in a way that is foreign to every principle of business.

[Lord Markham (Con)]

Speaking as a former chief financial officer of a FTSE 250 company, I would say that, in those examples, if you found yourself in a situation where you could not sell a player until the next window, that would be very poor financial management by the CFO, who would probably get sacked pretty darn quick if they led their cash flow into those sorts of situations. In extremis, if you needed to do that, the bank would lend the money against that because there are assets on the balance sheet that they can borrow against. Every FTSE 100 company is set up in that way. They meet their cash requirements by looking at their assets and raising debt where they need to against them.