Football Governance Bill [HL]

Lord Mann Excerpts

Committee stage
Monday 16th December 2024 Lords Chamber

Moved by

[Lord Mann]

129: Clause 16, page 10, line 14, at end insert—
“(e) setting out all financial arrangements with external agents or other intermediaries involved in contacts or recruitment, or both.”

[Lord Mann (Lab)]

My Lords, I again refer noble Lords to my interests in the register relating to this debate. I was in a meeting with the chair of the supervisory board of one of the more successful German football clubs discussing regulation. I asked him if there was one thing that could be done to improve football from regulation inside England what it would be. His advice was that the best thing that could be done—which is not actually available to us in this House as an amendment—would be to tax football agents in the UK through the British tax system.

Why might the head of a major football club—a competitor—wish to see that happen? If that happened—or if anything else threw into question the transparency of football finances, particularly in relation to the acquisition and departure of the key asset players—behaviour would be modified. I recall discussions with people who gave graphic detail of how, in the olden days—but not old enough for me not to have seen it happen—there was the notion of “cash in the boot”. A player would be signed to a team, suddenly and unexpectedly, and would play a few games. In doing so, cash would be handed over. I do not think that; I know that. I will not cite examples even though I could—it would not be fair to do so—but that was not uncommon.

In the modern game—today’s game—the amounts of money are much greater. One has seen situations where football clubs get into financial problems, usually because of relegation from the Premier League, and do not seem to know who owns their assets. There is a myriad of situations. That includes contract details—I can think of some in the recent past, where the fans, sponsors and others were rather bemused to find that certain players were able to go, at no fee, to play for other teams because of a clause in the contract that most people were unaware of.

My Amendments 129 and 248 seek to deal with the specific problem of how agents behave. There are examples I could cite where, pre transfer, players have been sold or bought for significant amounts of money and, literally at the very last moment, they suddenly change agents. I will give a hypothetical example, rather than shine too much specific light. Let us say that a player is sold for many tens of millions, and they have a single agent. The day before their transfer documents are signed, they then change agency. The agent then sues the player for their loss—for the cut that they would have got—even though the agents’ fees are very significantly higher than the worth of the individual agent. Why would anyone choose to do that? If you are a purchasing club and you are competing with others for a prized asset, you might well be prepared to pay more money and whatever requirements there are. But why would a selling club do that? What would the advantage be? The answer is there is zero advantage to a selling club—none—or, potentially, a disadvantage. If there are £15 million or £20 million in agents’ fees, that amount of money might come in to your club. So what is the motivation?

One of the things that has bedevilled football across the world, not just English football, has been people taking a percentage. I have spoken to people who have been offered money to give statistics on 12 and 13 year-olds in their own club—a cash-based suggestion that would accumulate over time, should the player get to a level of being worth lots of money. That is the minutia, but the major cases will involve major financial transactions. Fans are often perplexed by certain purchases and the amounts of money spent on players. They say, “What is going on here? This player does not appear to be worth quite that amount of money, or indeed anything near it. It must be because of bad football decisions”.

I put it to the Committee that perhaps the transactions are determined not always by football decisions but by loans. Most fans can cite times they have been bemused when their club has loaned a player in and paid a very large amount of money to do so, even though no one has ever heard of them before. The player then disappears a year on, and no one ever hears of them again. Why would you pay £1 million or £2 million to loan a player who no one has heard of, who has no track record and who then has no future track record?

The taxman has an interest, which is why, if I were able to do so and it would have been within the rules of this Committee, I would have proposed that taxing agents via the UK tax system would be the best answer. While that does not give public transparency, it seems that it would mediate behaviour. However, these two amendments seek to allow the regulator—not the general public—to be able to see and assess what is being paid and what is in the contracts. That would not be in a public way, but in a private way—and that would modify such behaviour.

If we are interested in competition in the sport, taking out externalities that have nothing to do with the business of the sport is in the interests—including the business interests—of the industry and the sport. Shining a light so that people do not feel it would be appropriate to do their decision-making based on how much they receive as a reward for their wisdom in, say, selling a player would be to the health of the game. Anyone in the Committee who thinks that does not happen, and has not happened, is being extremely naive. Anyone who thinks that this happens only at the lower end—the non-league, with a bit of cash in a back pocket—is also being naive.

Because of the way the football business has worked, there is a lot of money to be made, and people have managed to find ways—legally—of making additional profits for themselves, particularly out of the movement of the key asset players. These two amendments seek to allow at least the regulator to see exactly what is going on. Indeed, this is important in the critical situation where, say, a club does not own the assets that everyone thinks it has, because it has managed to sell them off in advance to some third party and therefore cannot cash in on them. There are examples that I am very familiar with, where clubs have gone insolvent because of that. In some way, this power needs to be in the Bill, unless the Government could be persuaded that HMRC would be a better decision-making body and have all football agents’ transactions in this country taxed through the UK tax system. I beg to move.

[Lord Goddard of Stockport (LD)]

My Lords, I was getting overexcited listening to the noble Lord, Lord Mann, because we have lives outside this Chamber, and for my sins, I go in the Dog and Duck every now and again, where, somehow, people find out that I am involved with this Bill. My pint goes flat before I have had a chance to drink it, because they ask, “Well, why do you not get this sorted?”

One of the main questions that comes across is: “What are you going to do about the agents?” I did not think that that was really grating with supporters, but it is—from the top right to the bottom. I know because I support Manchester City, which used to be at the top, and I look after, where I can, Stockport County, who are reasonably not near the bottom any more.

Supporters are human beings. They work hard and pay their money to go to watch the football. Nothing grates more than when they find out how much agents get for doing these deals. As has been said, there is confusion about player ownership. Do two or three people own a player? Does a company own a third of that player? If we wish to sell that player, does that mean we need the permission of those other people before we can sell him? Is that value for the club? Those issues need teasing out.

I am attracted to the idea of an agent having to pay UK tax, which would really add some clarity to the Bill. To be honest, supporters do not quite get it. I am not saying that I am above them or anything like that, but they see it as nebulous. They want to know what practical things the regulator can do for them as football supporters. If the Government were fleet of foot, they would put agents’ fees at the front of the Bill and say that any agent of a UK footballer should pay tax in the UK. That would be universally supported by all supporters.

--- Later in debate ---

[Lord Mann (Lab)]

My Lords, I am very reassured by the Minister’s clear words about the powers of and information from agents. Despite the valiant efforts of the noble Lord, Lord Pannick, we may be on the same side here, because I am in defence of British agents. With the complexities of football, there is nothing to stop anybody getting a legal cut from a transfer fee. The more transparency that is thrown on that, the more money is kept in the game.

The irony is that probably the main source of my information is agents. A second source is players and a third is owners and investors. The power of the agencies is often greater than that of the clubs themselves. That is the direction of travel. Therefore, it will be beholden on the regulator to ensure that at least there is maximum transparency. If a club wishes to give £1 million to another club in, say, Sicily for a player no one has ever heard of and who has played for two or three minutes, that is obviously a good business decision. The more out in the open that is, the healthier future the game has.

After that genuinely helpful reassurance from the Minister on my amendments, I seek the leave of the Committee to withdraw Amendment 129.

Amendment 129 withdrawn.

--- Later in debate ---

[Lord Shamash (Lab)]

My Lords, I am a very happy Manchester United fan. The last few minutes of yesterday’s game were bliss; they reminded us of what happened in 1999 when we won the treble.

I rise to talk again in relation to supporters’ trusts. I have been pressing this; I pressed it in debate the last week and, indeed, at Second Reading. The supporters’ trusts should be there on the face of the Bill. As I mentioned last week, there are 149 supporters’ trusts in the pyramid. Nearly all of them are recognised by the FCA and they operate under the Co-operative and Community Benefit Societies Act.

I ask my noble friend the Minister: why reinvent the wheel? We have a structure that works; it works very well indeed. I would ask that my amendment, “including supporters’ trusts”, be accepted. We understand—we are not trying to be prescriptive—that there will be other fan groups and people who might like to become involved in communicating with the club, but, having supporters’ trusts that exist throughout the UK, it would be a very sensible and easy move to make. I hope this amendment will be accepted.

[Lord Mann (Lab)]

My Lords, there is nothing wrong with supporters’ trusts, but working-class fans have other models as well, historically and currently; that voice also needs to be heard. Supporters’ trusts are one model and should be empowered, but they are only one model for football.

I have eight amendments here more or less doing the same thing. There is an issue here, which the noble Baroness, Lady Brady, alluded to and spoke to, with the fan advisory boards. There is a fundamental choice here, and I would advise the Government to be careful with the politics of this. Some clubs are choosing the fans to go on their fan advisory board; it is not the fans choosing the representation but the clubs. That is one model, but it is many miles away from the Crouch review. It is the total opposite of what fans would hope to see. The fans in this country have not gone for the German model and demanded comparative boards, 50% et cetera, supervisory boards, and that kind of power in relation to the clubs.

I have helped to establish a range of Jewish supporters’ groups. These are Jewish supporters who want no more than to be meeting up with other Jewish supporters of their club—full stop. But they do hope as well to be able to give the occasional bit of advice, sometimes very productively and positively, to their club—if the club does not refuse, as one has, to recognise a large group of Jewish supporters who simply want to be themselves—and, if there are any issues, they want to be listened to. It might be about the provision of kosher food, or ticketing policy, or that there are a lot of fixtures on a Friday night and people are finding it difficult to be religiously observant and still be able to go. It might be to do with giving advice on issues relating to racism within the stadium. On issues like these, this is a group that should be listened to; it is not a group that should have the power to tell a club what to do.

But the idea that fan advisory boards should be chosen by the club is anathema to fans. Fans are perfectly capable of choosing their own representatives. Let us think about what will happen if this Bill goes forward and the regulator has powers, but clubs can still say to fans, “No, we will choose who the fan voices will be. We will pick persons 1, 2, 3, 4 and 5. They will be there under our criteria. You, the fans, will have no say”. What will happen is that conflict will emerge, and the Government will not come out of the conflict well. The perception will be that the Government had the chance to ensure this.

Let us think about a supporters’ trust, made up of people giving of their free time to organise. As a member, you elect whoever to be your representatives, and they are then your representative; it is not the club coming in and saying, “No, we will pick Lord Shamash because we love Lord Shamash. If he is elected, that is all well and good because he represents what we would like to see in Manchester United”. That would be an invidious position for anyone to be in. I hope the Minister can give some reassurance that the fan voice on those big issues—moving the ground, changing the colour, changing the name—will actually be a fan voice. If it is not, then government and Parliament will become unpopular at some stage.

[Lord Jackson of Peterborough (Con)]

My Lords, I want to respond very briefly to Amendment 224 in the name of the noble Lord, Lord Mann. He made a wonderful peroration, but I am not sure it bore much relation to the amendment that he has laid down. Of course, none of us wants clubs to hand-pick fans who will be nodding dogs— ersatz fans who will go along with the corporate line of the football club. We do not want that.

I am not sure if this is a probing amendment for Ministers to consider before we get to Report, but it is a lock. It locks in and fetters the discretion of football clubs to make decisions that might be existential for the future of that club; in other words, diversifying activities, and not just in terms of the freehold. Clause 46 specifically mentions—

[Lord Mann (Lab)]

I thank the noble Lord for giving way. If it was proposed that Peterborough was to be moved to King’s Lynn, or to Norwich, should not the Peterborough fans have the right of veto on moving their club out of their town?

[Lord Jackson of Peterborough (Con)]

Perish the thought. There are many Peterborough fans who do not live in the city of Peterborough but in the Fens; they may not be too displeased at going to King’s Lynn—not that I am in any sense proposing that. He alludes to the Posh. The Posh have been able to develop a number of commercial activities over the last few years. Darragh MacAnthony, the owner, started out in 2007 as a very rich man. Now he is just a rich man, because of his love for Peterborough United.

The point is that that club has been able to stay afloat financially because the board of the club, backed—disproportionately I would say—by the fan base, has supported the diversity of activities. The noble Lord’s amendment and Clause 46 as written would lock out the possibility of many clubs and boards making decisions to protect their long-term financial sustainability.

I respectfully say to the noble Lord, for whom, as he knows, I have huge respect—particularly for the great work he has done on kicking out anti-Semitism in football—that that is a different issue from regulated fans and setting up fan organisations. This amendment would be quite prescriptive for clubs, and it would not be in their long-term interests, particularly those teetering on the edge of financial instability and unsustainability. For that reason, I hope the Minister will consider these issues when she responds to the noble Lord’s amendment and others.

[Lord Watson of Invergowrie (Lab)]

My Lords, I will speak to my Amendment 138A on what consultation means. The wording—

“leave out ‘consults’ and insert ‘meets regularly with’”—

is taken from the Explanatory Notes. On page 44, paragraph 271, under the heading “fan consultation”, they say the following:

“This mandatory licence condition … requires clubs to regularly meet with a group which the IFR considers representative of the club’s fans, which could be a group elected by the club’s fans”.


Throughout these debates, many noble Lords have quoted the Fair Game document, which refers to fan engagement as a communication process, and to a range of formal and informal face-to-face processes being part of that. That is what I am trying to get across here. It is important that clubs meet regularly with the fans and do not just consult. To consult could mean anything. It is not exclusive—of course, it could take various forms—but they must meet regularly. I hope that ultimately, the Government will accept that. It remains to be seen, but I will return to this issue on Report because it is very important.

I will comment on some other issues that noble Lords have raised, particularly my noble friend Lord Mann, who I usually agree with. I did not really take to his dismissive comment in response to my noble friend Lord Shamash. My noble friend Lord Mann said that it is all very well having supporters’ trusts, but you need organisations with working-class members. I do not know much about the Manchester United Supporters Trust, but I am sure it has working-class members.

I am a member of two trusts and have been for some 20 years. One is in Scotland—my old club, Dundee United; I pay £15 per year for that. I am also a member of the AFC Wimbledon trust, called the Dons Trust. I pay the princely sum of £10 per year for that. For that reason, I think there are more than a few working-class fans. I think that my noble friend Lord Mann was suggesting that supporters’ trusts price some fans out. I do not know if that is the case, but I would not have thought so. By definition, you would think that would be rather pointless.

[Lord Mann (Lab)]

My noble friend has misinterpreted my comments. Supporters’ trusts—I have been heavily involved in one as well—have all sorts of members, but there are other kinds of organisations that have never had the objective that supporters’ trusts have. That is the point: there are different types of organisations. Some purely want to go and watch football and not take on the more significant interests and structures that supporters’ trusts have.

[Lord Watson of Invergowrie (Lab)]

I thank my noble friend, and I fully accept that point; I have misinterpreted what he said. He seemed to be suggesting that trusts were different from other supporters’ groups. There are a wide range of groups and that is exactly the way it should be.

I am afraid I cannot go along with my noble friend’s Amendments 139 and 140. I am not opposed to them per se, but he seems to be distinguishing between fans and elected representatives of club supporters’ groups. Surely, these are the same people: you cannot be an elected representative of a supporters’ group if you are not a fan.