Football Governance Bill [HL]

Baroness Brady Excerpts

Committee stage
Monday 9th December 2024 Lords Chamber

[Lord Jackson of Peterborough (Con)]

My Lords, I will speak to my Amendment 57 in this first group. I am delighted to see the noble Lord, Lord Harris of Haringey, in his place and I appreciate his cameo role in this Committee. I had not noticed him here for most of the deliberations of the Committee, but we welcome him anyway.

This is a probing amendment to press the Government on how much intervention they envisage the regulator pursuing in the internal financial affairs of clubs. It is a probing amendment because we on this side seek to solicit from the Minister more precise details, which are not in the Bill, about how much she and the Government envisage the independent football regulator having a part to play in the technical minutiae of the finances of each club.

Because of the nature of the Bill and the wide-ranging powers under its Henry VIII clauses, we simply do not know the degree of interference in those 116 clubs. For instance, will a club be required periodically to enunciate its liquidity requirements on a quarterly, half-yearly or annual basis? What debt cap rules will they have? What player acquisition and sales issues will the regulator become involved in?

Importantly, there are also the decisions taken by the boards of the 116 football clubs around land and property, which are covered elsewhere in the Bill but relate to this amendment—where they play and what contractual arrangements they may have with landowners on a rental, leasehold or freehold basis. Will the regulator be prescriptive about which banking arrangements, and with which organisations, each club is free to enter into?

These are important issues. This Committee’s effective scrutiny requires more insight from the Government into the regulator’s intentions regarding financial regulation, not least because other non-departmental public bodies already have significant powers and the capacity to intervene directly in what are, in effect, small and medium-sized enterprises and significant, big businesses turning over large amounts of money. There are the Financial Conduct Authority, the Competition and Markets Authority and His Majesty’s Revenue & Customs, and local authorities have widespread powers to intervene in the everyday activities of the clubs contained within their local government areas. There are also various companies Acts, such as the Companies Act 2006 and that of 2016, that are within the bailiwick of the interface between government and football clubs.

As we asked on the sweeping powers over raising finance, and since the Bill does not expand on this, is Parliament not being asked to write a blank cheque to allow the Government to regulate as they wish? Not just the Premier League but clubs in other leagues are most concerned about this because of the nature of this legislation. Will the Minister address the concerns of each of those clubs about the powers of the regulator potentially to interfere in each club’s everyday financial affairs?

[Baroness Brady (Con)]

My Lords, I refer the Committee to my interests declared in the register. I support Amendment 71 tabled by my noble friend Lord Markham, which raises a crucial point regarding the backstop mechanism. We must be clear at the outset about what this mechanism governs and, critically, what it does not.

First, it is vital to understand that the backstop is categorically not about the fair apportionment of collective football revenues. Each party—the Premier League and the EFL—has its own central broadcast revenues. Indeed, the EFL has just secured a landmark five-year domestic broadcasting deal worth nearly £1 billion, increasing its central revenues by 50% from next season. This is testament to the Championship’s growing competitiveness and appeal.

I will not dwell on the fact that many of its recipients are incredibly wealthy—I believe there are nine billionaire owners in the Championship, along with many other extremely well-funded ownership groups—but I will dwell on the fact that, despite its very healthy income, the EFL does not give any money to the National League. It gives no funding to the leagues directly below it. It is the Premier League that supports the National League. Far from some sort of neutral arbitration to allow all parties to share with each other, the backstop is in fact a mechanism for the forcible redirection of billions of pounds of Premier League revenue only. In other words, this is one set of private businesses handing over money to another competing set, even if they do not want to give more than the £1.6 billion they already do and it damages their ability to compete.

The critical point, therefore, is that this backstop mechanism represents a completely unprecedented and untested intervention in what are the private commercial rights of Premier League clubs only. It impacts uniquely on Premier League clubs. The gravity and novelty of such an intervention demands the most careful consideration. Crucially, the backstop introduces a major and radical change in the Bill: the inclusion of parachute payments. This decision was taken without adequate consultation with Premier League clubs.

I mentioned earlier in Committee that just seven out of 20 clubs were invited to a 30-minute meeting on the Bill with the Secretary of State between the Government taking office in July and the decision, which was taken in October. It is no surprise that this lack of consultation has produced such a reckless decision. There simply cannot have been an appropriate understanding by the Government of its potential consequences.

Parachute payments are not a financial convenience; they are a cornerstone of the Premier League’s competitive balance. Without them, clubs cannot plan for long-term investment, or the stability required to maintain the intense competitiveness that is the hallmark of the Premier League and a significant driver of its global appeal. Parachutes are also—this is an often-overlooked point—a key part of the financial incentives for Championship clubs to invest in that league, knowing that if they reach the promised land, it will not all be undone with one bad year.

To fundamentally alter this system risks undermining the very factors that have made the Premier League such a global success and one of the UK’s greatest soft power assets. Potentially harming the magic ingredient of the Premier League’s competitive balance threatens to destabilise long-term commitments, jeopardising investment in lower-league stadiums, academies and community programmes. I believe it would fundamentally undermine the Championship, too.

We should also consider the concerns raised by UEFA. It has warned that the backstop mechanism could disrupt the balance of power in football governance and negatively affect the competitive equilibrium in both domestic and European competitions. UEFA has urged the Government to carefully reconsider their approach, emphasising that mandating redistribution in this way risks deterring amicable solutions and the very investments that underpin the success of English football.

This unprecedented intervention into private commercial rights must be carefully scrutinised. It very obviously has a differential and disproportionate impact on the clubs within the Premier League. It is also clear that the consequences of this seismic and deeply flawed intervention have not been fully understood. We do, as UEFA has said, need to reconsider this critical issue.

[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.

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[Lord Reay (Con)]

My Lords, I wish to speak briefly to Amendment 249, laid down by the noble Lord, Lord Mann, and Amendment 156 from the noble Lord, Lord Bassam. Regrettably, I was not able to participate at Second Reading, for which I apologise. I declare an interest as an enthusiastic football fan and supporter of West Ham United since the days of Bobby Moore and Geoff Hurst—which dates me a bit.

Clause 20 of this Bill introduces corporate governance duties with regard to equality, diversity and inclusion. Amendment 249 from the noble Lord, Lord Mann, would create an additional duty on football clubs to produce an annual report detailing the club’s diversity and inclusion strategy. This sounds in theory like a good thing. The problem here is that the Football Association’s idea of diversity and inclusion seems to be to promote some forms of diversity while silencing—even excluding—others.

The current approach at the FA punishes and excludes one particular group: women who object to male inclusion in the women’s game. Noble Lords have previously spoken in this House about the 17 year-old girl who was disciplined and suspended for asking a male player on the pitch in a women’s game, “Are you a bloke—a male player in a women’s game?” She was suspended. That is not inclusion.

Amendment 156, in the name of the noble Lord, Lord Bassam, proposes that the corporate government statement must include a club’s plan to improve the diversity of season ticket holders, staff and senior managers. The FA’s investigations unit helped Newcastle United Football Club collect personal information about a lesbian fan which resulted in her suspension by the club from attending matches because someone at her club did not like her social media posts. This behaviour by the FA and the club is not inclusion.

Both examples show intolerance of what are called gender-critical views—that is, the ordinary scientific and common-sense understanding that there are two sexes, that human beings cannot change sex and that sex matters. Those are mainstream views and they are critical to ensuring fairness and safety in sport. People who hold and express them are protected against discrimination and harassment on the basis of belief by the Equality Act 2010, but the FA is punishing female players and fans for expressing these views.

Through its partnership with Stonewall, the FA has made its campaign one of intolerance, disallowing the expression of any views other than the mantra of “trans women are women”. When diversity and inclusion is defined by more tolerance, I shall welcome it. If we compel English football to pursue more of this so-called diversity and inclusion, it will be at the further expense of women and girls.

What is the solution? The solution is to stop talking in vague terms about diversity and inclusion and have the courage to talk about the groups who need to be included: women and girls, gay men and those who are disabled. Let us have less of the thought-policing and more genuine inclusion. Until we can do that, we must oppose the further imposition of vague diversity and inclusion requirements, because they are anything but inclusive.

[Baroness Brady (Con)]

My Lords, before I speak to Amendment 156 in particular, I want to address a point made by the noble Lord, Lord Blunkett. There have been 51 clubs in the Premier League since its inception, and there are no permanent members of the Premier League. The Premier League is responsible. It works in a way that looks after the entire pyramid, with its £1.6 billion voluntary redistribution, and it is that money that powers the entire Premier League.

I have spent 32 years—almost all my career—working in professional football across the Football League and the Premier League. My suggestions for amendments are, in a way, to assist the Government to make the Bill work better and avoid the unintended consequences that we all fear and keep warning about.

Amendment 156, tabled by the noble Lord, Lord Bassam of Brighton, concerns inclusion and diversity among season ticket holders in the corporate governance statement. I want to say at the outset that diversity is undoubtedly a critical issue in any industry, and football is no exception. Clubs across the pyramid should and do strive to be welcoming and inclusive spaces for all. However, with respect to the noble Lord, the amendment makes a profound and dangerous error. It proposes to involve the regulator in micromanaging some of the most fiercely prized and deeply personal relationships that football clubs hold: their connection with their season ticket holders.

Season ticket holders are the beating heart of football clubs. They are not just customers; they are custodians of the club’s heritage and identity. They represent generations of loyalty, support and community spirit. To suggest that the club should be required to actively manage and engineer the diversity of this group fundamentally misunderstands the organic and deeply embedded nature of these relationships. It risks turning something sacred and delicate into a crude tick-box exercise. For what purpose? To satisfy an external regulator’s misguided notion of progress. I cannot stress enough how risky that would be. It is yet another sign of the scope creep and dangers that lurk in the Bill.

I am not saying that football does not have a role to play in promoting diversity and inclusion—it absolutely does, and clubs up and down the country are already leading by example in the brilliant work that they do every day in this regard. But these initiatives arise from the clubs themselves, born out of genuine commitment and not fear of regulatory overreach. That is how to foster real, lasting change—not by imposing quotas or forcing clubs to meet arbitrary targets but by working with them to build on the good will and trust that they already share with their communities.

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[Lord Goddard of Stockport (LD)]

I hear what the noble Baroness says about diversity. This weekend, a West Ham player, Antonio, had a terrible car accident and is in hospital now. If you had seen some of the vile and disgusting comments on social media about the player and the club, you would begin to understand why we need diversity.

I have just looked it up, and the dictionary says that diversity is

“the practice or quality of including or involving people from a range of different social and ethnic backgrounds and of different genders, sexual orientations”,

and that

“equality and diversity should be supported for their own sake”.

I do not have that rosy picture of football supporters. I lived through the 1960s, 1970s and 1980s and heard the chants at various football grounds, which we cannot now repeat in this Chamber. Things are getting better and more acceptable, but it has not gone away. We need diversity to be brought to the fore.

As for the idea that we can just let the clubs do nothing and let this evolve, that just will not happen. We need to make statements. We need, via the regulator and via some of these amendments, to enshrine things in a regulator’s role. What is wrong with having a diversity report that a football club would produce once a year? It is not a tick-box exercise; it stops comments being made about certain footballers about gender, colour, creed or whatever. The more we can introduce that and embed it into football, the less vitriolic nonsense we will get. You still hear it, even on Sky, when they then say, “If you heard anything you shouldn’t have heard, we apologise for that”. That is what you get as an answer—but it needs stopping. These kinds of amendments are needed to enshrine in the regulator the ability to say to clubs, “You will give that report and commit to doing all those things around what diversity means”.

[Baroness Brady (Con)]

I thank the noble Lord for his comments about the West Ham player, Michail Antonio. It was a real shock to me on Saturday when I received a call from the police about his car accident, but I am pleased to report that he has had an operation and is recovering well. I take the opportunity to thank all the NHS staff and all the emergency services, including the air ambulance and the firefighters who cut him free from his car.

I agree with the noble Lord that the comments footballers are subject to is a terrible shame. It is absolutely horrific and that is a problem with social media. Clubs themselves do everything they can. At West Ham, we have the highest standard of equality and diversity; you cannot be awarded any higher standard than we have. We take it very seriously and that feeds down through our entire club. I thank him for making those comments. Football is trying to deal with those things, but there could be help from other places. We know about the Online Safety Act and that could really help.

[Baroness Young of Hornsey (CB)]

My Lords, I support Amendment 157. I declare an interest as a Premier League season ticket holder. I apologise to the Committee for not having been present during previous debates on the Bill, but I have endeavoured to keep up with its progress.

This part of our discussion seems to overlay lots of different and very complex issues, piling them all into one or two amendments. As I speak to Amendment 157, I will try to focus on governance and having independent, non-executive directors on boards, which is absolutely essential when looking at this issue. As the noble Baroness, Lady Brady, has pointed out, there is this idea of football clubs being not just a business or a commercial entity, as other commercial entities are. They are also considered to be community assets, so there is a wide range of stakeholders involved in the promotion, adoration, despair and all the other emotions that go with being a football fan. As has been rightly pointed out, it almost defines something about England.

It is therefore important to try to ensure, as far as possible without being too prescriptive, that we have independent non-executive directors on boards because of the accountability. At the moment, I think many fans feel that there is no accountability. I take on board a lot of the points made about how progressive and determined clubs are to counter the horrible things that happen online and elsewhere, but clubs have also not been terribly successful in changing the faces that sit around those boardroom tables. If we look at reviews such as Sir John Parker’s review of ethnic diversity on boards, there has been some improvement in some sectors. I would gladly be persuaded by those who know better if it is the case that diversity has been increased around those tables.

That is just one part of it. To me, this feels like a move for basic good practice. We have the Nolan principles and we have guidance from the Institute of Directors. All those kinds of guidelines need transparency and people to speak up for them who do not have an interest in a particular way on those boards.

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[Lord Markham (Con)]

I hope that this proves to be a quicker debate, because I would hope that what we are talking about here are not controversial measures but measures that go to the heart of the regulatory framework we are trying to establish. It is a shame that the noble Lord, Lord Addington, is not in his place. Although we are supportive of the principles of regulation, as my noble friend Lord Hayward said, we are trying to make sure that that regulation is set up in the right way.

Our debates in Committee stage so far have all been about the first few pages of the Bill, which are about the regulatory framework and objectives; the point of my Amendment 56 is that if you only have an objective of sustainability, it is one-dimensional and that is not good for the game. I will freely admit that I have spoken to a Premier League club which wrote to me about that—Brentford—and I hope that noble Lords would agree that Brentford is exactly the sort of club we should listen to in this sort of debate, because it is a club that has come through the divisions and is seen as a well-run model club—and one definitely not guaranteed its place in the Premier League. So it has an important contribution to make to this debate.

The letter that Brentford wrote to me and to local MPs says: “a regulatory framework that prioritises stability above all else would be disproportionate. It could mean the regulator financially constraining some Premier League clubs more than others. For Brentford, a club that has risen against the odds to the Premier League, such restrictions risk stifling our ability to grow and compete with larger, established clubs”. That is why I tabled this amendment, to expand the regulator objectives. Otherwise, there is the danger exactly as written in the letter, which I am happy to share with all Members here and which has also been sent to local MPs.

The exact concern of Brentford’s chairman is that, if the regulatory framework is just based on financial sustainability, it risks entrenching the closed-shop nature of the top clubs and will restrict the ability of the Brentfords of the world to compete. From its point of view, having an objective that promotes the growth of all English football, protects financial investment in the game and means that you know you can reap the rewards from investing in a club is very important. Amendment 56 seeks to add this, and is, I hope, uncontroversial, because who would not want to promote growth? We know that that is the Government’s number one objective, and it is fundamental to the Bank of England’s remit and a lot of other regulators also have growth objectives.

In the new clause proposed in my Amendment 58, subsections (1)(a) and (1)(b) refer to the “financial soundness” and “resilience” of clubs and aim to ensure that the regulator takes into account the whole financial picture of clubs, looking at their assets and liabilities—their whole balance sheet—and their ability to meet any future liabilities. In other words, we want a holistic picture of their sustainability. Funnily enough, that is akin to what the Chancellor announced in the Budget about government spending and so-called “persnuffle”—or PSNFL—which looks at assets and liabilities to make sure you have a rounded picture of the health of the Government’s, or the country’s, finances. Amendment 58 tries to encourage a similar approach to looking at the overall wealth of a club and its overall balance sheet strengths.

Proposed new subsection (1)(c) looks to make sure that the heritage of English football, which we all agree is vital to all this, is rounded out in its definition, while proposed new subsection (1)(d) looks at all the things that are key to the health of the overall game. It would make sure that the regulator, when it looks at how it acts in this space, looks at the overall health of the game—the growth of football in terms of TV viewership, matchday audience, fan engagement, number of clubs and number of fans. I shall not repeat the arguments that we made earlier, but noble Lords will be aware that these are the key things—that media rights go to the heart of the value and TV stations around the world pay to back those media rights, for the health of those sorts of objectives that we would like to see it have.

That is why, in introducing this amendment, I am trying to make sure that we have a much more rounded definition, going to the heart of the framework of what we hope the regulator would look to do and have in place. I hope that noble Lords will be able to support what I hope is a very sensible objective and will take on board the concerns of the Brentford chair—if it was only one-dimensional and looking at financial sustainability alone. I hope that the Minister will be able to take those points away for further consideration. I beg to move.

[Baroness Brady (Con)]

I support Amendments 56 and 58, tabled by my noble friend Lord Markham, which together propose critical enhancements to the objectives of the regulator. These amendments seek to establish clear and ambitious goals for the regulator, while ensuring that its powers remain proportionate and carefully defined.

Amendment 56 introduces two new objectives for the regulator: to promote the growth of English football and to promote and protect financial investment in the game. These objectives are not just desirable; they seem to me to be essential, if we are to preserve the vibrancy, competitiveness and international appeal of English football.

The Premier League is the crown jewel of global football. Its growth and success have been driven by significant financial investments, made in good faith and with the legitimate expectation of stable and predictable regulatory conditions. Without that certainty, clubs would not have been able to commit to the infrastructure, youth development or community programmes that are now the pillars of our game. Yet, as currently framed, the regulator’s remit is heavily focused on constraints, restrictions and redistribution. While these may be important, without taking growth into account, they risk creating a chilling effect on the investment that has driven English football to its current heights. To constrain without also providing balance is to risk stagnation or, worse, managed decline.

Amendment 58 complements this by providing detailed definitions of these new objectives. It outlines what growth means in practical terms: increasing TV viewership, matchday attendance, fan engagement, the number of clubs and the number of fans. These are good proxies, in my view, for the growth of football and ensuring that the regulator’s actions are aligned with the long-term health of the game. Although promoting growth and protecting investment are vital, I listened carefully to the Minister’s argument that a growth duty or purpose could in fact be scope-widening. I believe that she indicated that it could place the regulator in conflict with the broader European framework of football governance. This would risk significant repercussions—but only, of course, for those clubs competing in European competitions.

This is one of the tensions at the heart of the Bill. You could have proper balance in the regulatory regime’s design, so that it is de-risked, light-touch, pro-growth and business-friendly and protects this highly successful industry—but, in doing so, you potentially risk the future of a smaller number of clubs which may, one day, be barred from European competition. Alternatively, you could do what the Government have done, and you therefore risk setting up the regulator to be harmful to growth, overly intrusive, risk-averse and dampening to investment—but, in doing so, you are more likely to be compliant with UEFA, although no one has been able to provide a cast-iron guarantee on that.

In supporting these amendments, I urge Ministers to take this opportunity to refine the objectives of the IFR to set it firmly on the path to success. We need to create objectives that support football’s future without overextending the regulator’s reach or compromising the autonomy of competition tools, which must rightly remain the domain of the competitions themselves. I hope that, as we deepen our scrutiny of the Bill, we can find a better balance.

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[Lord Moynihan (Con)]

I will pick up on the point made by the noble Lord, Lord Goddard, and refer to the amendment in the name of the noble Lord, Lord Mann. My understanding is that the regulator cannot take the women’s game into account, even where, in theory, the accounts may relate to both. Indeed, on the face of the Bill, as I read it—I look forward to the Minister’s clarification—it would be possible for clever accounting to move money and, indeed, even financial exposure, across to the women’s game and therefore exclude it from the consideration of the regulator. I hope I am wrong in that. I can see that there would be ample opportunity for approaches to the accounts and the financial strength of clubs to be manipulated in a way that I am sure was not the intention of the Government or the regulator. The Minister will no doubt clarify that when she comes to respond.

This goes back to the possibility of amending the scope of the Bill in the future. In other words, as the noble Baroness, Lady Grey-Thompson, said, this is exclusively a men’s regulator. I was a bit concerned about the language in the report to Parliament and to the Delegated Powers and Regulatory Reform Committee, which was prepared by the department, recommending that women’s football be “given a chance” to self-regulate. That is rather a condescending phrase to the sport. Therefore, it is not surprising that a number of people in the sport have been rather concerned that the women’s game has not been given equal opportunity. UEFA has brought in solidarity payments for the Women’s Champions League clubs to support the growth of the women’s game. That is not the case in the UK. I can completely see the arguments that people like Kelly Simmons have made: if the benefits of the regulator are as strong as the Minister has expressed to the Committee, then it could enhance and expand club licensing criteria to raise standards in women’s football—the performance of women’s football as well as medical and welfare provision.

If the Bill offers so strong a benefit to the sport as the Minister makes out, it is unfortunate that the women’s game should be put to one side and simply told it is being given a chance to prove itself and, in due course, might see the benefits that the Minister says exist in this Bill for football. That is my biggest concern. I think it is a concern felt by many in women’s football; I see the noble Baroness, Lady Grey-Thompson, nodding in assent.

It is important for the Minister to address both the role of the regulator in relation to what a football club does to promote women’s football and the wider implication that many in women’s football feel: that they are being somehow excluded from the great benefits we have regularly heard about in Committee from the Minister about the game as a whole.

I hope the Minister will respond to both those points; that would be helpful to the Committee. If they are not positive responses, then this will perhaps be something we should return to at a later stage, to make sure that the women’s game is not disadvantaged by the introduction of the regulator.

[Baroness Brady (Con)]

My Lords, I rise to speak on Amendments 65, 70 and 72, which focus on ensuring financial support for the women’s game and protecting it from many adverse impacts resulting from the Bill.

While I respect the intention behind these amendments, I believe that they are not strictly necessary. I want to underline the significant commitment that many Premier League clubs already have to the women’s game. A vast majority of Premier League clubs operate women’s teams—including West Ham, which had a fantastic 5-2 win yesterday. We do that not as an obligation but as a genuine commitment to growing and professionalising women’s football. We all want our women’s teams to succeed, thrive and contribute to the broader success story of English football.

The truth is that not one WSL team makes any money—actually, not one even breaks even. They all lose between £1.5 million and £5 million a year, so they are currently wholly reliant on the men’s teams playing in the Premier League for their funding. The Premier League’s commitment is not just rhetorical; it is backed by meaningful action. Premier League clubs have provided substantial financial support and shared their expertise, facilities and resources. A recent example of that is a £20 million interest-free loan, which was made available to the women’s NewCo to help build a robust foundation for future growth, alongside a co-operation agreement with the Premier League to assist with growing, commercialising and attracting investment to the women’s game. The Premier League also invests £6 million in over 70 emerging talent centres across the country, to bring brilliant and diverse talent into the women’s and girls’ game from the widest possible range of backgrounds.