Football Clubs (Governance)

Baroness Keeley Excerpts

Wednesday 8th September 2010 Westminster Hall

[Barbara Keeley (Worsley and Eccles South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) on securing the debate; he spoke very well. I am not speaking as a football fan, but am here to represent fans. I have received more than 50 notes from constituents who are supporters of Manchester United. I am sure many hon. Members in this Chamber have also received such correspondence—those from Salford and further afield.

[Steve Rotheram]

Much further afield.

--- Later in debate ---

[Barbara Keeley]

And those from much further afield. The constituents who have contacted me are also members of the Manchester United Supporters Trust. They have become disillusioned with how their club is being run and are concerned about the state of the national game. They think that football must start to be regulated properly and have its governance reformed.

Many Manchester United supporters in my constituency are greatly concerned that their club is now the most heavily indebted club in the world, after a hostile and highly leveraged takeover by the Glazer family in 2005. My right hon. Friend the Member for Salford and Eccles (Hazel Blears) touched on the debt situation of that club. Prior to the takeover, the club had no debt at all. It now services debts in excess of £750 million. Although the club is still reporting a healthy operating profit, the money is not necessarily going into improving the club; it is being spent just on servicing the debt. The 2009 report by the all-party group on football points out that supporters paying off the debt in such situations do not even have a tangible influence over the direction of the club. As with Portsmouth’s situation, the longer-term future of the club is no longer assured.

That level of debt and uncertainty has a clear impact on supporters. Many feel that the decisions made by controlling interests in the club in the boardroom do not demonstrate long-term commitment to the club and its supporters. That is why dissatisfaction sometimes breaks out and there is a sea of green and gold instead of red at big matches at Wembley. My constituents rightly feel it is time for dedicated football fans to be given some sort of stake in the clubs that they and their families have helped to build over many years.

Football clubs are an integral part of the community, and their ownership and financial management should not just be dealt with through company law. Indeed, I remember when Manchester United behaved as if it was part of the local community in Trafford, where the club is based. When I was a Trafford councillor, a young David Beckham came to open a new centre for young people leaving care. Members of the team made visits to schools to read to children during reading weeks and the players were much more involved in the community that was home to their club. That changed and the players started to be seen more as a corporate resource. Prices for tickets and kit increased dramatically and players’ salaries soared. It has become much harder to see clubs such as Manchester United as part of our local community.

There should be stronger regulation to ensure that those owning and running football clubs understand their wider responsibilities to the community. Football clubs should not be run on the basis of massive debt, which can threaten the stability of both individual clubs and the health of the game as a whole. At the moment, the game has clear laws enforced by referees and assistants on the field. However, off the field, it is like trying to play a game with hardly any pitch markings, unclear laws and no referees. That is why, off the field, various forms of financial crisis are appearing all over the place—from Cardiff City to King’s Lynn, from Chester City to Southend, and from Manchester United and Liverpool to Portsmouth. We could say that governance in the football industry is no better than the governance of the banking industry over recent years.

There is plenty of legislation on football, but it is directed at the fans—for example, on all-seater stadiums, football banning orders and controls on drinking in sight of the pitch. What about some legislation to constrain what goes on in the boardroom? Legal models from elsewhere could be adapted to work in England and Wales. We have heard about examples from Germany, but there are also examples in France, the United States and Canada. Spain already has a national sports law that establishes a statutory national sports council and a special company status of sporting limited company. That law is not perfect—I understand that the Spanish Parliament is considering reforming it—but it does give a clear legal context for professional and amateur sport and recognises the unique characteristics of professional sports clubs. Will the Minister say whether he has considered or intends to consider other models of governance for professional sports clubs?

[Hugh Robertson]

Does the hon. Lady want me to respond now?

[Barbara Keeley]

The Minister can do so when he is summing up, given the number of hon. Members who wish to speak.

It may also be time to consider the tax regime that gave financial incentives to leverage buy-outs, such as the takeover of Manchester United by the Glazers, and whether such tax breaks are any longer appropriate.

Supporters and fans need the Government to take action to improve the governance of football in this country. The Sports Minister made commitments to do that, but more recently he seems to have softened those commitments, saying:

“We’ll give football the chance to sort itself out first by seeing how they plan to reform over the summer, and if it doesn’t work then the Government will step in. We need to take a serious look at reforming the governance and structure of football in this country.”

Will the Minister tell us today what plans the Government have after the summer to step in and take action, and when does he propose to start?

On fans owning their clubs wholly or in part, I believe that ordinary company law is insufficient because football clubs are not ordinary companies, which is shown by the fact that they are called clubs. That is how most of them started: they were clubs that were rooted in their local communities, not profit-making entities. They trade on the name, history and traditions of the city and the community they come from. They are unlike other businesses and should be treated as such. Football clubs are unique, and their sole purpose should not be to make profit for one individual or company at the expense of their fans and the wider community.

I will finish by saying that one never hears of anyone wanting to have their ashes scattered on the car park of their local supermarket or business park after they die. However, fans do want their ashes to be scattered in their football clubs. That is why football clubs are different.