Football Governance Bill [HL]

Debate between Lord Moynihan of Chelsea and Lord Markham

Committee stage
Wednesday 18th December 2024 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

My Lords, I hope the Minister will bear in mind that the repeated statements “For every winner there is a loser”, “The Premier League is in terrible danger” or “Football is in terrible danger” just ignore the fact that football is tremendously successful in this country. If for every winner there is a loser, there would have been no progress in the last 20 years. There has been progress and enormous success. We now have the greatest football league in the world. The statement that “Your biggest asset is only one accident on a training ground away from being worth nothing” completely ignores the fact that all football assets—all players—are insured. If, God forbid, your best player was injured irrevocably on the training ground, you would receive an enormous insurance payment, so it is just not true. The actual commercial realities of what is going on in football in this country seem to be completely mis-stated so often in this Chamber. I hope that the Minister will take heed of the tremendous success that private enterprise, unfettered by an onerous regulator, has created in the world of football in our country.

[Lord Markham (Con)]

I will sum up on a couple of new points. I always welcome comments from the noble Lord, Lord Pannick, because his forensic brain is really helpful in making sure we get to the bottom of what we are talking about. I have only just had a chance to look up Clause 22(4); this is about the regulator’s ability to restrict expenditure. It says that the regulator

“may not impose restrictions on expenditure of a particular kind or a particular transaction”.

That can be open-ended, unless the particular kind or particular transactions are defined somewhere; they could refer to anything. I do not know if the Lord, Lord Pannick, is aware of what they refer to, but perhaps the Minister could follow up on that, either now or in writing.

--- Later in debate ---

[Lord Markham (Con)]

My Lords, just to be clear for the record, no law was passed in this instance. In a matter of days the clubs quickly withdrew from the competition because, as my noble friend mentioned, it went down like a lead balloon and fans were up in arms. The Government were nowhere near it. That was a perfect example of where the clubs and the fans regulated themselves.

[Lord Moynihan of Chelsea (Con)]

My Lords, I have a very strong recollection of this because I wrote an article the day after the proposal came, which was published, like many articles at the time, and I remember that the very next day the proposal was withdrawn. It had nothing to do with the Government. By the way, I was not a politician at the time; some would say I am not one now, but it had nothing to do with Governments or Parliaments.

Football Governance Bill [HL]

Debate between Lord Moynihan of Chelsea and Lord Markham

Committee stage
Monday 9th December 2024 Lords Chamber

[Lord Markham (Con)]

I rise to speak to my Amendment 104, but I start by saying that I agree with the thrust set out by the noble Baroness, Lady Taylor, that we want this to be a comprehensive report. We all agree that we need a common factual basis on which to try to agree onward action. As such, I agree that this needs to be the first thing that the regulator does. With that, I am sympathetic towards the quicker timeframe. Obviously, I am mindful that we need to give it a certain amount of time so that it can do the report properly; six months is probably unrealistic as a quick proposal but 12 months should be enough time. Beyond that, given how quickly things move, every three years is a reasonable frequency.

Before I come on to Amendment 104, I admit that I am a bit concerned by Amendment 95, which asks the regulator to report with its assessment of how well each club is managed. It is one thing working with each club and looking at its plans; having to report on that is almost like a different level of burden of proof when it comes to the evidence needed. I am sure the regulator will be nervous about putting this down in black and white without having a strong evidential base. When you are trying to do that across 116 clubs, it creates a duty that is probably burdensome on the whole industry. It would result in a whole host of Deloittes, KPMGs and PwCs of the world going into every club, all 116 of them, to try and find assess how well they are run.

I turn to my Amendment 104. Key to this is football financial health. We all agree that it is critical to everything that we have been talking about—to sustainability and to the whole pyramid payment system and how much money is going at the top end. Every time I have proposed something, I have thought it was not controversial, and have said so many times over the last few days. I have then been—“upset” is too strong a word—mildly disappointed that it was not taken up by the Minister. I hope that asking the regulator to write in the “state of the game” report a section on football financial health is a no-brainer. Even though we are getting towards extra time, and into stoppage time, I hope we can have one thing chalked up that the Minister is happy to take away and agree to tonight.

Similarly, on the state of fan engagement, one thing that united the whole Chamber earlier was when we were talking about how fans should be consulted in all this. I hope that including a section on fan engagement in the “state of the game” report would be considered as close to a no-brainer as you would hope to get.

Lastly, proposed new paragraph (f) looks at the operation of the current regulators and an assessment of how well the independent regulator performs. That comes on to a clause later with the subsidiarity principle, and we are asking the independent regulator to, for want of a better term, contract out different functions where a current regulator—the FA, the Premier League or whatever—is better placed to do that. That is the general principle that we hope to get established. However, for it to be able to do that, the football regulator in the “state of the game” report first needs to report on the functions of the current regulators and how well they fulfil them.

Again, late into stoppage time, I hope these will be seen as quite sensible and uncontroversial measures. I look forward to hearing the Minister’s views on them later.

[Lord Moynihan of Chelsea (Con)]

My Lords, we are, I hope, on the home straight, to take a metaphor from another sport. I rise to support an amendment in this group, to say nothing about some others, and to oppose some others.

I take my thoughts from a reflection on Hong Kong and its enormous success as an economic entity for many decades before, lamentably, we had to lose it to the Chinese—with the current appalling situation that we now see in Hong Kong. Why was Hong Kong so successful? It is generally acknowledged that Sir John Cowperthwaite took an attitude of benign neglect to its success. He arrived in Hong Kong, he was urged to govern, and he said, “No, I’m going to step back because it’s doing very well without my interference”. He assiduously prevented reports being written about Hong Kong.

I am very much in support of the amendment tabled by my noble friend Lady Brady because it seeks to limit the report, and I say nothing about the various timing amendments, which I do not feel qualified to discuss, but I did say at Second Reading that this Bill was a Christmas tree and, unfortunately, people like to hang baubles on Christmas trees: “Let’s look at women’s football”; “Let’s look at the environment”; “Let’s look at so many things”—it is irresistible when you have a Christmas tree. What is wrong with having a report on these interesting, important things? We go back to Cowperthwaite: if you have a report, people feel urged to do something about it. If you say, “My report says that there’s something wrong here, or that more could be done there”, then that moves on to the impetus to interfere more and more.

There are two attitudes in this House to what is going on in football in this country. There is the attitude that we know best and that we say what is fair—fairness seems to be the prime objective among many speakers. There are others who are saying, “Why are you wanting to interfere with what is working so well?” I applaud the noble Lord, Lord Addington, for defying the injunction not to repeat ourselves, since he repeated himself earlier this evening in claiming that there was this catastrophic situation in the lower orders of football. I do not see it. Football is thriving. Others said the same when the point was made before—but good on him for defying this attempt to suppress deeply held thoughts, even if spoke twice.

No actions have no consequences. Attempts in these amendments to put more and more into this Bill will be detrimental to the great sport of soccer in this country.

Football Governance Bill [HL]

Debate between Lord Moynihan of Chelsea and Lord Markham

Committee stage
Wednesday 4th December 2024 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

I beg the noble Baroness’s pardon for not attributing the £10 million figure to her. The fact is that we know that is ludicrous, because the cost of other regulators is way more than that.

I will make some headway. What will it cost overall? We do not know what the overall cost will be or what it will cost individual clubs. To talk a little bit more about that, imagine you are a local entrepreneur. There is a club in a little bit of trouble. They come to you and say, “You always wanted to own a football club. Why don’t you take over our club and then you can have one of those back-to-back league promotion successes that you’ve dreamed about and you’ll be famous in your community?”. You say, “Well, I’ve got a few bob. I don’t know how much, but yeah, okay, I’ll consider it”. It is one of those clubs that a noble Lord opposite talked about on Monday. I think the numbers cited were a turnover of £2 million and seven employees. You are invited to take over this club and bung in some of your money. You may not have a lot, but you may think you have enough. Then you say, “What’s going to happen?” My concern is that when you are told there is going to be a regulator that will tell you who to have on your board and all that, you will say, “Forget about that; as an entrepreneur, I don’t play that particular game”. But let us say you swallow that. Then you say, “How much is this regulator going to cost me?” The answer: “Dunno mate”. You ask, “Well, what could it be?” The answer: “Dunno”. So you turn your back and go off to sponsor the local cricket club or something like that. It does not work if you are not absolutely clear about what the cost will be.

[Lord Markham (Con)]

I ask the noble Lord this given his experience of consulting in a lot of entrepreneurial and start-up situations. I know that he has done lots of these types of moves. Clearly, when you invest in a start-up business or a club you will have business plans. They might be good or bad business plans, but they are normally based on an investment and an expansion. In this case, given that the regulator can say no to those business plans and that investment once it gets into it, I assume your investment proposition would suddenly be up a creek. I would like to hear the noble Lord’s opinion on what that will do to the investment proposition.

[Lord Moynihan of Chelsea (Con)]

The noble Lord, Lord Markham, makes a very good point. If some local worthies approach you and ask, “Will you invest in this club?” and you say, “Well, I’ve got to figure out what it’s going to cost me”, and they then say, “You’ve also got to figure out whether your plans are going to be acceptable to the regulator”, again, you would turn your back. Entrepreneurialism is the heartbeat of the economy, as several noble Lords have said in this debate over the past few days. This regulator proposal just turns entrepreneurs away from wanting to invest.

[Lord Mann (Lab)]

It would be helpful if the noble Lord could give examples of entrepreneurs wishing to invest in football who he has spoken to. I have spoken to a lot of entrepreneurs, including people who have invested smaller amounts in smaller clubs and larger amounts in Premier League clubs. They know exactly what they are anticipating and what they are going into. Of course, as part of their business plan, they are factoring that in. There is a figure, there is a concept, and investment has not gone down in the past 18 months. Indeed, further major investment in major clubs in English leagues is likely to happen soon. What is going wrong if they are all running away? Can he give a single example?

[Lord Markham (Con)]

I posed the question, and I can give an example of that. I have mentioned to noble Lords before that I have experience of the Brighton situation and know the board and the set-up there quite well. Brighton is a perfect example, and it is a shame that the noble Lord, Lord Bassam, is not in his place, because he is very familiar with it. It was a club without a stadium or good training facilities. An owner, Tony Bloom, came in and invested a lot of money in it, with a plan predicated on investing in players and doing a lot of analysis to get the best ones from around the world. It was absolutely a start-up scenario where he was heavily investing, and part of that was the concept of being able to yo-yo in terms of having parachute payments. He cited to me the example of West Bromwich Albion, which at that time had been promoted and relegated and promoted and relegated, but each time, because they had the parachute payment, they were able to become more sustainable.

Suddenly you get a situation whereby someone is thinking, “I want to do another Brighton like Tony Bloom, but I do not know what my cost base will be. I do not know whether the regulator is going to stop me going on with my plans because it thinks I am unsustainable or make me deposit a large sum of money as a financial buffer. I do not know whether my parachute payments, which are part of my plan, are then going to be taken away. Suddenly I’ve got a hell of a lot more risk involved”. I can only believe that that is going to dampen enthusiasm to invest in the first place. That is a very real example.

[Lord Moynihan of Chelsea (Con)]

I thank my noble friend. I apologise to the Committee for going over my allotted time, but I hope that it will appreciate that a great deal of that time was taken up not by me but by entirely welcome interruptions by other speakers.

In the interests of trying to move this on fast, I will stop talking about this issue of “What is it going to cost me?”, important though it is to have far more understanding of and far more limitations on the regulator’s ability to charge, and will move on to that of “What I will get?”. As soon as it becomes possible for a club to get money out of this arrangement, suddenly you have discussions about parachute payments and backstops; you have supplicants; you have lobby, lobby, lobby. It is called crony capitalism, state capture, rent-seeking. These are the dangers that you get when you involve the Government, and although we are calling it a regulator, this is a governmental action. It is essential that we limit the amount of money that that regulator has to play God with football in this country.

With those problems, it goes beyond just stopping the regulator spending beyond the levy amounts, as I understand Amendment 253 to say. We need to ensure that the levy amounts in the first place are suitably parsimonious and as little burdensome as possible to the clubs. I appreciate what the noble Lord, Lord Addington, had to say, but let us not be too free with other people’s money. I am sure it is not popular in all parts of this House to quote the great Baroness Thatcher, but she had the great remark, “You can spend other people’s money until pretty soon there isn’t any more”. Let us think about the impact.

Football Governance Bill [HL]

Debate between Lord Moynihan of Chelsea and Lord Markham

Committee stage
Monday 2nd December 2024 Lords Chamber

[Lord Markham (Con)]

My Lords, I rise to speak to my Amendment 17. What we have seen today, and I am glad that the Chief Whip has been here to witness it, is a passionate and informed debate. Perhaps it will give him an understanding of why the debate may be lengthier than one might have hoped. Not surprisingly, 15 or 20 noble Lords have spoken and we have probably had 21 or 22 different definitions of what a fan is—so none of us underestimates what a complicated area this is, but what we are all united in is that it is vitally important and, as such, it should be in the Bill. That is what we are asking the Minister to reply on.

I am probably biased, but I happen to think my Amendment 17 tries to take those different aspects into account, saying that fans are

“individuals who … identify with the club, engage with the service the club provides, and have an interest in seeing the club succeed”.

Bringing in the service that the club provides is trying to take into account that wider commitment and interest in it. I completely agree with the noble Lord, Lord Mann, that the most dedicated version of that is the season ticket, but we also know that there are massively long waiting lists for season tickets. Does that mean that people who are on a waiting list or people who cannot afford a season ticket somehow count less? That is why my wider definition talks about people who engage with the services of that club to try to take that into account.

I think we all agree with the noble Lord, Lord Watson, in his amendment that giving the independent regulator a definition to work to is vital, because this is at the core of what a club is. In any consultation that a club has to undertake, it needs to be clear who it is consulting with.

[Lord Moynihan of Chelsea (Con)]

My Lords, I rise to speak against Amendment 17A, tabled by the noble Lord, Lord Watson, and in favour of Amendment 17, tabled by the noble Lord, Lord Markham. The noble Lord, Lord Watson, has clearly thought very carefully about this and I agree with a great many of his nuances and analyses of what a fan is. I also agree with much of what the noble Lord, Lord Mann, said, although not about the localism.

Why are we talking about San Francisco or South Korea fans? It is because, surely, the purpose of this Bill is to sustain and continually improve the commercial and financial success of football, not to introduce some more nebulous—indeed, I would say suspicious—metric that we could conjure up on social grounds or whatever. If we are here explicitly to damage the commercial and financial success of football, let us admit it—but, if we are not, let us then look at the consequences and implications of that.

What is a fan? Can it only be a season ticket holder? The noble Lord, Lord Goddard, said about fans, “These are working-class people”. As an unregenerate member of the middle classes since childhood, I sort of resented that, but let us go with it. I am sure that the noble Lord, Lord Watson, is a champion of the working classes, but how many of the working classes can afford a season ticket? When I was 10 years old, I would jump on a number 11 bus and go down the King’s Road to Stamford Bridge. I only got there once a month maybe, by not having a gobstopper or a Barratt sherbet every day and saving up the five bob it cost me to get into the ground. I could not afford a season ticket. Fine, you could say that I should not be consulted, either, any more than children of 10 should be allowed to go on social media.

When I was an undergraduate of 21, I could not afford a season ticket but I was a fervent Chelsea fan. Later, I became a season ticket holder. Did I suddenly become worthy of consultation because I had managed to get a job that helped me afford a season ticket? Then when I moved abroad for a couple of decades, to study and work, did that disqualify me from being a fan? Then when I came back and got a season ticket, was I suddenly qualified to be a fan again? It is nonsense. If we are thinking about the commercial and financial success of this industry, we should follow the commercial and financial logic: my noble friend Lord Finkelstein was quite eloquent about that just now.