Football Governance Bill [HL]

Baroness Brady Excerpts

2nd reading
Wednesday 13th November 2024 Lords Chamber

[Baroness Brady (Con)]

My Lords, I declare an interest: for more than 30 years, I have lived and breathed English football. As detailed on my entry in the register, I am currently the vice-chair of West Ham United. Throughout my 30 years of working in this industry, I have experienced both the magic and the harsh realities of the football pyramid. I have sat in EFL and Premier League boardrooms, making difficult decisions about finances. I have celebrated with supporters through promotions and trophy wins, and consoled staff when relegation meant jeopardy and job losses. So, when I speak about the dangers lurking in this Bill, I do so not from ideology or theory but from practical, real, lived experience. I also speak, like so many millions in our country, out of a love of, and real passion for, the game.

The Bill’s intentions came from a good place. Who would not want to protect their club’s historic heritage assets, prevent breakaway leagues or strengthen fan engagement? But aspects of this legislation risk suffocating the very thing that makes English football unique: the aspiration that allows clubs to rise and succeed in our pyramid system; the ambition that means fans can dream.

I want to focus my remarks on one specific area: the backstop power on financial distributions. Premier League clubs would have no fear of the regulator making an independent determination about whether the funding we voluntarily provide to the EFL—in addition to our own substantial revenues—is sufficient to deliver financial stability for well-run clubs. This is because, by any objective measure, it is. For example, every single Championship club receives £7.8 million from the Premier League, amounting to between 20% and 40% of that club’s typical annual revenue. I will not dwell on the fact that the EFL has just signed a near-£1 billion domestic broadcast deal, helping to increase its own revenues by 50%, or £100 million, a year from next season; or that the Championship is already the sixth-richest league in all of European football.

However, a regulatory determination is not what the Bill delivers. Instead, it outlines a legally untested “pendulum arbitration” mechanism related to funding, conditions, financial system and term. The regulator can only choose the Premier League’s final proposal in its entirety, or that of the EFL; it has no ability to compromise between the two. In other words, the Bill has designed a mechanism that throws all the pieces of the pyramid up into the air, with huge uncertainty as to where they may land, and it does so every five years.

The Government have now added parachute payments, which is a competitive tool that provides the scaffolding and incentives for strategic investment in both the Championship and the Premier League, into the scope of these powers. This hugely expands the likelihood of the regulator becoming directly involved in competition tools and structures. UEFA and FIFA have already warned the Government against doing that.

The Government appear, wittingly or unwittingly, to be enabling the radical redesign of the pyramid that the EFL executive has been openly promoting. This would involve extreme redistribution from the bottom-half clubs in the Premier League to competitor clubs in the Championship; large reductions in parachute payments; and the levelling down of the Premier League to bring the Championship much closer to it.

Some advocates for this—on a frankly comical basis—think it can be done without any impact on the Premier League’s world-leading status. The vision is for a German-style system where most clubs in the top two divisions can become essentially interchangeable, just going round and round in a washing machine, while a few privileged clubs are allowed to float away and entrench their financial dominance. It would replace our brutal but brilliant meritocracy with the likelihood of a closed shop, where survival—not aspiration—becomes the ceiling. It would make it harder for stories such as Leicester winning the title, Brighton’s journey from League 1 to Europe, Aston Villa beating Bayern in the Champions League and West Ham United winning a European trophy, to ever happen again. A less exciting and unpredictable league would disappoint and turn off fans, meaning reduced broadcast interest and, in turn, diminished revenues.

The Premier League shares our success—to the tune of £1.6 billion, or 16% of our total revenue—with the whole pyramid. If we stunt the ability of the Premier League to maintain its growth and revenues, ultimately there will be far less investment in the whole of football, including the grass roots and the women’s game. That would be a very bad outcome.

I struggle to believe that Ministers would deliberately put at risk the continued success of the world’s most-watched league: what our Prime Minister recently called “our greatest cultural export”. I urge the Minister to improve the backstop mechanism so that it incentivises football-led solutions, recognises the contractual and property rights of the Premier League clubs and, above all, eliminates the possibility of extreme outcomes that would damage the success of the Premier League.

Let us protect our clubs without suffocating them. Let us regulate the game without removing its aspiration and ambition. Let us ensure that English football remains not just financially stable but vibrant, competitive and full of possibility.

Football Governance Bill [HL]

Baroness Brady Excerpts

Committee stage
Wednesday 27th November 2024 Lords Chamber

[Lord Mann (Lab)]

My Lords, I declare an interest in the Register of Lords’ Interests, as the elected chair of a football supporters’ group with 13,000 members. On Sunday, the weather advice was that nobody should travel in south Wales. I and 3,000 others did travel in south Wales. On Sunday afternoon, we travelled, not of our choice but because football fixtures are being changed to all sorts of obscure times. We went, and returned very late, very happily. That will not be the case at all fixtures if I wish to attend this House. In the new year, we have three fixtures that have been shifted to 8 pm on a Monday, and that does not quite balance with the sitting times of the House. I am just one fan, but there are many thousands who face that.

Imagine trying to get to Plymouth by 12.30 pm on a Sunday. That is what we had to do. It is not an easy way of life, and it is not just the bishops who are losing custom by this odd scheduling. It affects people’s ability. If there were to be an added word in here, it should be “enjoyment”—enjoyment of the game. Yesterday, one club, Manchester United, announced its new prices for this season. For a child, the minimum price is £66. That was my first away fixture, supporting Leeds United, aged five. I was lifted over the barriers—in for free—as I was at Leeds until the age of eight or nine, because that was how children were welcomed then. I did not pay to go in for the very many hundreds of matches I went to in that age span, and now it is £66. Well, it is a business.

The noble Lord, Lord Moynihan, who has good football taste, was none the less slightly awry with the example he gave in terms of liquidation, insolvency and the problems. If we take where I live—I will take Lincoln City and Notts County at random—both were about to disappear. The only reason they survived is that the supporters saved them. That is the difference between this industry and other industries. There are countless examples. If they were private sector businesses, they would have vanished.

In some cases, the fans could not do it. In 1987, as a Leeds United fan living in London with a few friends, I got a season ticket for a club called Wimbledon. It was a good choice; we got to the cup final with Wimbledon. I had a young daughter and I could not get to Leeds all the time, so a group of us went to Wimbledon in our spare time. If you are a fan of Wimbledon and your club wins the cup after coming from nowhere, you see what that does for the area and the fans, and people in south London. Then, a few years later, your club is extinguished, gone, shifted to Milton Keynes—vanished. The fans had the wherewithal to set it up again as AFC Wimbledon, and build from the bottom up, which is what they are having to do at Bury.

I almost thought that one or two noble Lords were suggesting that the state should not intervene in successful business, and I will end on this point. If we combine Scottish and English football, the most successful moment in terms of success on the pitch was around 1971. England had won the World Cup; Manchester United were the first English team to win the European Cup. Celtic had won the European Cup in 1967; Rangers were about to win the European Cup Winners’ Cup. We had the Cup Winners’ cup and the Fairs cup, and a whole succession of English teams about to take on the European Cup through the 1970s and dominate world football. It was the one moment when both Scottish and English football were at their height.

On the 2 January 1971, at a high moment, 66 people died at Ibrox football stadium. The state did very little intervening then. Then there was the fire at Bradford— I knew people who were there—when the state had not intervened sufficiently in the industry, and people died. Then there was Hillsborough, where people died. The state has intervened in the sport and the interventions, when they have been hard and focused, have been transformative. It was not the owners of the clubs who brought in the model of football with all-seater stadiums, revenue generation and corporate hospitality. I shall tell you the first club that did it. It was Glasgow Rangers. After 1971, their manager, Willie Waddell, went to see how others across the world did it. They rebuilt the stadium before anyone else did because of his experience of seeing people dying in front of him—that is state intervention.

In the balance between the fans, the state, the entrepreneurship and people’s ability to put in money—if anyone wants to put money into our club, we would be delighted because we are not trying to stop that—we want to see a slight tilt so that the fans are listened to. If we end up shifted to the bottom like the fans of Bury—I do not think we will, but you never know—the state should allow us to do something that they were not able to do; that is, for more to be done along the lines of what was done by the genius of those Wimbledon fans. It took them years to get back up. Wimbledon Football Club, having beaten Liverpool in the cup final in 1988, should have been able to survive seamlessly with their fans. That is the point of this regulation, and it is why I hope the Opposition Front Bench will be reluctant to further push this line of argument.

There are interesting issues that should be explored in getting that balance right. It will be legitimate to go into them and hold the Government to account, to question and even amend. Sustainability means that I, as a fan, will have my club in the future, whether it is badly or well run. That is what is critical about this legislation, and I commend the Government for bringing it forward.

[Baroness Brady (Con)]

My Lords, I refer the Committee to my interests, which are declared in the register. I want to give the noble Lord, Lord Mann, a bit of comfort in that had he been going to a Premier League away game, he would have paid only £30, because there has been a cap on the price of away tickets for the past five years.

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[Lord Bassam of Brighton (Lab)]

I am told that EFL clubs are likely to lose around £450 million in this current football season, and I think the noble Baroness said something similar. The regulator in this Bill, which is focused primarily on financial sustainability, is surely a good thing for football regulation because it is trying to make sure that those clubs—yes, involved in the business of risk and jeopardy—are financially sustainable and have a duty to their communities, and that their activities do not risk the future of those clubs. The point of the legislation, from the previous Government and our Government, is to make sure those clubs can be sustained and not have undue financial risk.

[Baroness Brady (Con)]

I thank the noble Lord; he made his point very well. The Bill does not say “financial sustainability”. Sustainability is not defined. If you put sustainability above overall success, growth and the competitive nature of the game, you might have a safer league, but you will have one that no one wants to watch. You might, notionally, have a more sustainable ecosystem, but it will also be smaller, more boring and poorer. If sustainability is the number one aim of the regulator, can the Minister explain to us what she and the Government consider to be the definition of the “sustainability” of English football? Can she also explain why sustainability does not include supporting the sustainability of the success and growth of the Premier League?

[Lord Londesborough (CB)]

My Lords, I intervene briefly as an impartial Cross-Bencher. In the interest of productivity, I am aware that we are still on the amendment to:

“Clause 1, page 1, line 4”—


although many of us are still discussing line 1. I will suggest a compromise. The word “sustainability” on its own is too undefined; I suggest that it should be “financial sustainability and success”—thereby combining Amendments 1, 2 and 3.

However, I do not agree with Amendment 4. On growth, I would go back to the banking sector. I know that football is a very different industry, but banking and the financial services in the noughties had the most phenomenal growth rates and we are still all picking up the tab as taxpayers. That was not financially sustainable. So my suggestion is that the words should be “financial sustainable” and “success”—those two together.

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[Lord Watson of Invergowrie (Lab)]

I thought that the noble Lord had indicated that he had finished. On success, which the two noble Lords that I mentioned talked about, the whole question seems to me to be totally subjective. As the noble Baroness, Lady Brady, said, what is success for one club is not success for another. I suggest that for at least half the clubs in the Premier League, success is not being relegated rather than winning anything.

[Baroness Brady (Con)]

Just to clarify, I said that what sustainability is for one club is different from what it is for another, not success.

[Lord Watson of Invergowrie (Lab)]

That is interesting. Someone in the debate said that we should have financial sustainability and success. I think that in this setting the two, if not interchangeable, mean very similar things.

The noble Baroness, Lady Brady, and others, talked about the competitiveness and the jeopardy. As you can hear, although I am an AFC Wimbledon season ticket holder, I do not come from south London. When I lived in Scotland, my club was Dundee United. They were Scottish champions in 1983. Next season, Aberdeen were Scottish champions. There has been no team but Rangers or Celtic as Scottish champions in the 40 years since. That is a low bar, perhaps, but in fact only two clubs have won the Premier League more than twice in the 32 years of its existence. It is all very well to talk, as the noble Lord, Lord Markham, did, about Bournemouth beating Manchester City. Yes, it is always possible, but a club such as Bournemouth could never aspire to winning the Premier League. Only a very small number of clubs could realistically—

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[Lord Watson of Invergowrie (Lab)]

We will have to see how that comes out in debate. I am not quite sure what the import of that amendment is. That is one of the issues about the role of the regulator. Noble Lords, particularly on the other side of the Chamber, are seeking to give him or her greater powers or influence than intended in the Bill. The noble Lord, Lord Moynihan, said at one point that we do not need a regulator because nothing is wrong. There is something wrong, because the Premier League and the English Football League have been unable to reach agreement on the disbursement of the funds from the top level to levels below. That is one of the problems in the system at the moment.

[Baroness Brady (Con)]

There is a deal in place agreed by all parties on how funds are distributed; 16% or £1.6 billion is distributed. It is also important to note that the Premier League has more title winners in the last 15 seasons than La Liga, the Bundesliga and Serie A, and the fewest number of titles won by one club than any other top European league over the same period, which shows it is competitive. That is why it is the best league in the world and the most valuable, and that is what we have to protect, because without that broadcast revenue the whole pyramid suffers.

[Lord Watson of Invergowrie (Lab)]

I know the noble Baroness has experience with one of the major Premier League clubs but, in a sense, she has made my argument for me. The other leagues are less competitive, but I am just saying that if only four clubs can win the championship twice in 32 years, it is not spread very wide, and I would like to see it spread more widely, as many other people would—no doubt including those at her own club.

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[Lord Addington (LD)]

My Lords, when trying to sum up these several hours of debate, I felt at times that we were dancing on the head of a pin. Sustainability —what actually does it mean? What do the Government think it means? That is the one question I would give to the Minister. Does it mean sustaining a successful Premier League? Well, I would hope so. Is sustainability making sure—remember, this Bill encapsulates it—that those five tiers of professional football are functioning? That is what is in this Bill—five tiers of professional football. That is what has allowed the resurrection of teams which got it wrong—there was somewhere to go.

Making sure that that is sustainable means that the fans want something. I hope I never cross the noble Lord, Lord Mann, on this subject because there was a great deal of fire in the belly there; my noble friend Lord Goddard might have got close at times, but I think we will give the noble Lord that one on points. The fans want something and are hugely emotionally and physically invested in this structure. That is what is behind the Bill. Football is not another business; it is not even another sports business. It is not—and may all that is holy be thanked—WWE. It is not something that we will throw away; it is embedded in the identity of much of our society. I say that as a rugby player. The noble Lord, Lord Hayward, is my friend—I will say yes to him and “sir” when he is refereeing, but only then.

So it is that that comes through. The question here is about the word “sustainability”. What do the Government envisage it is? Let us get it out here now. Where will this be backed up? Where will it be shown so that we can know what is going on? Pepper v Hart is clearly not enough here. If we can get that, we can move on, but we must remember that we do not want the Premier League to be damaged, because it provides the money for the other good things to happen. That is the balance we must achieve—or at least get close to.

We cannot guarantee that it will be the best league in the world for ever. Will there be government intervention to make sure that it is successful? That would be a strange position for many noble Lords who have spoken.

[Baroness Brady (Con)]

The point is that the government regulator should not make it less successful by over- regulating, mission creep and making it so difficult to keep it competitive that it ends up having a detrimental effect.

[Lord Addington (LD)]

My Lords, we come back to semantics, definition and interpretation. How do you interpret success? Is it by lack of regulation or by intervention? I do not think FIFA and UEFA would be terribly happy if it was felt that it was possible for a regulator to interpret success.

I hope that the Minister, who will have better access to this information than anybody else here—at least, I really hope she will—will be able to say what sustainability is, where does it go and what is the Government’s vision? That is what has happened here.

The Bill is about keeping five tiers of professional football functioning, with an escape route when it goes wrong, if we want to be terribly mercenary, for the top clubs. It gives a chance to rebuild and come back. That is difficult—Leeds have done it briefly; the noble Lord, Lord Mann, is smiling at me—but that is what is behind the Bill. It is not just about the Premier League, it is about the whole thing. I hope that the Minister will be able to correct—or rather, clarify—these points.

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[Lord Jackson of Peterborough (Con)]

I will briefly respond to the noble Lord, Lord Bassam. I take on board the Maude doctrine, which is that, had we had the opportunity to have scrutiny and oversight of the Bill at the appropriate moment, I would have made exactly the same points to my own Government when they were in power. So, with all due respect to the noble Lord, he is flogging a dead horse by keeping on saying that this was a Tory Bill. We are today considering a Labour government Bill on its merits and its efficacy, which is why we are debating it.

[Baroness Brady (Con)]

My Lords, I support Amendment 6. I clarify for the noble Lord, Lord Bassam, and the noble Baroness, Lady Taylor, that there is no state regulator in France or Germany—all the regulation there is football-led—so this is something completely different.

I will raise with the Minister the alarming letter that UEFA sent the Secretary of State. In it, the warnings are spelled out very clearly, as are the concerns about “governance interference” in football. It points out that it has very “specific rules” that guard against state interference in order to

“guarantee the autonomy of sport and fairness of sporting competition”.

It states:

“If every country established its own regulator with similarly broad powers, this could lead to a fragmented, inefficient and inconsistent approach to football governance across the continent and in essence hinder the ability of UEFA and other bodies to maintain cohesive and effective governance standards across Europe”.


It goes on to say that

“it is imperative to protect and preserve the independence of the FA in accordance with UEFA and FIFA statutes”.

It warns against anything that could compromise

“the FA’s autonomy as the primary regulator of football in England”

or the ability of domestic leagues to set

“their own season-to-season financial sustainability rules”.

As the noble Lord, Lord Moynihan, said, it gives stark warnings about the backstop power and licensing. UEFA expresses significant concerns about the backstop and stresses the importance of preserving collaboration and voluntary agreements in football governance, while cautioning against overreliance on regulatory backstop powers that could disrupt the sport’s balance and stability.

It says that the backstop threatens

“the balance of power within football governance”

and that

“mandating redistribution which affects the competitive balance in the game and wider European competition would be of concern to us”

and would

“prevent amicable solutions being found”.

UEFA says that the backstop in the current Bill should be “carefully reconsidered”.

However, despite those warnings from UEFA, the Government have made the backstop even wider and broader in scope, to now include parachute payments, which are fundamental to competitive balance. They have removed the incentives for a football-led deal, which goes specifically against the advice of UEFA. So it appears that the Government have ignored that letter and its warnings. UEFA spells out that

“the ultimate sanction would be excluding the federation from UEFA and teams from competition”.

No matter how small the Minister may say the risk is, the inclusion of this amendment will help to ensure that the IFR does not act in a way that enables such unintended consequences for football fans. That would be a huge relief.

We should be careful not to empower this regulator without fully addressing the concerns of the international governing bodies in advance. If we create even a small but ever-present risk of intervention in the future, that could put the Government, the regulator and our competitions in an invidious position down the track, especially in circumstances where the interests of English football may not align with UEFA or FIFA—for example, in the event of future disagreements on the football calendar. I therefore urge the Minister to give assurances that every single issue raised in the letter has now been dealt with to UEFA’s satisfaction, including its concerns on financial distributions and independence from government. This leverage, once granted, cannot be taken back.

It is imperative that nothing in the Bill gives the regulator powers to interfere with the rules that already govern football—which, by the way, is one of the most governed and regulated industries around. We have to comply with FIFA rules, UEFA rules, Football Association rules, Premier League rules and EFL rules—and now we have the IFR rules. We will be tied up in more red tape than a company applying for a post-Brexit import licence.

So will the Minister ask the Secretary of State to allow a full copy of the letter she received from UEFA to be put in the House of Lords Library and the Commons Library for every single Peer and MP to be able to see it, read it and be aware of its nature and tone and of the consequences it spells out, so that every Peer in this House can take that into account when they consider why this amendment is so important and so necessary?

[Lord Watson of Wyre Forest (Lab)]

My Lords, I continue to be humbled by the gentle kindness and grace with which Members of this House help relatively new Members understand the list of amendments in Committee on Bills. I am particularly grateful to the noble Lord, Lord Moynihan, for helping to steer me back on course. To reciprocate the kindness, I say that I enthusiastically support his amendment and that of the noble Lord, Lord Maude.

I apologise to my noble friend the Minister for adding to her confusion. She withheld comfort on that first debate in relation to the clarity I was seeking on whether English football teams and England will be able to play in European and international competitions at the end of the Bill. I say to her that now is the time: she can end my confusion, give the clarity that this Committee deserves and end the ambiguity by saying that England and English football clubs will be playing in international tournaments, because these important amendments are trying to get that reassurance to every football fan in England tonight.

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[Baroness Twycross (Lab)]

There is nothing in the Bill that conflicts with English clubs or the English national side competing in international games, as the rules of the international bodies stand currently.

[Baroness Brady (Con)]

Have UEFA told the Minister that, or is that her understanding?

[Baroness Twycross (Lab)]

As I said, UEFA had a meeting with the Minister for Sport. My understanding from that meeting, at which I was not present, is that this was confirmed. It has not raised other concerns. If any noble Lord knows of other concerns that it has raised directly with them, please get in touch afterwards.

[Baroness Twycross (Lab)]

I can only repeat that I know that the Minister for Sport is clear that she had a positive and constructive meeting with UEFA, and that we will continue to work with it. The only other point I was aiming to make on this matter, rather than repeating what I had already said, was that when the Government say that we want to keep the Bill within its current scope, this is clearly partly to avoid mission creep, with the unintended consequence that we might then stray into areas that are problematic. When we debate subsequent groups, please note that it is front and centre of our minds that we are very clear that this Government will do nothing to jeopardise the ability of English clubs or the England team to play in international competitions, whether they are European, world-level or at the Olympics. I hope that noble Lords accept that there is no intention to do anything that will jeopardise that. The advice we have had is that this will not be the case. The engagement with UEFA is essential, and it is aimed at ensuring that there are not any unintended consequences that would damage the ability of English clubs or national teams to compete in UEFA, FIFA or Olympic competitions.

This legislation does not impose undue third-party influence on the FA, and therefore does not breach FIFA or UEFA statutes, which the FA has confirmed. In any case, there is an additional safeguard already in place in the Bill, in that the regulator must have regard to its duty to avoid any effect on sporting competitiveness of regulated clubs. For the avoidance of any doubt, and to ensure that there is no possibility of any clauses that may concern these sporting bodies, we have already taken action. As previously noted during the debate, we have removed a clause from the previous Bill which allowed government foreign policy and trade considerations to be considered when approving takeovers. The regulator will be fully independent from Government and tightly focused on the financial sustainability of the game.

On Amendment 24 in the name of the noble Lord, Lord Moynihan, I say that we are extremely confident that no powers or potential actions taken by the regulator would be in breach of the rules, and thus preclude England’s national teams from competing in international competitions. We are mindful of UEFA’s governing principles around undue third-party influence, and this has shaped how we are setting up the regulator.

I am proud that this is a Labour Government Bill that we are taking through this House, as was noted, with agreement from the previous Government. This legislation will not impact the intention for our teams to play in UEFA competitions. For the reasons I have set out, I am unable to accept the noble Lords’ amendments and hope that they will not press them.

[Baroness Brady (Con)]

Just before the Minister sits down, can she confirm if she could, and would, place in the Library the letter that the Secretary of State received from UEFA, so all Peers have a chance to read it? I know the Minister stated that this was not alarming, but I think the majority of people would find it alarming.

[Baroness Twycross (Lab)]

The noble Baroness refers to my point about this not being alarming. I do not want fans to be alarmed by our discussion. It was a private letter from UEFA; there is no intention for it to be published. I assure noble Lords that this Government will not do anything to jeopardise the FA’s membership of UEFA or the participation of English teams in UEFA competitions.