Football Governance

James Daly Excerpts

Monday 14th June 2021 Westminster Hall

[Jonathan Gullis]

In advance of the debate, I spoke to members of the Foxes Trust, who were very complimentary about the dialogue they have with Leicester City’s owners. I know the hon. Gentleman was buzzing from Leicester City’s recent FA cup victory, and I am sure he will be cheering on Blighty in the upcoming game against Scotland; I will not put him on the spot with that one, but I am sure he will, secretly.

I could not agree more with the hon. Gentleman. Football clubs are massively important to the history and identity of their communities. In fact, communities were built around such clubs, as we saw in Bury. My hon. Friend the Member for Bury North (James Daly) has banged on relentlessly about that; I do not think there is any doughtier a champion for Bury football club’s return to its proper ways. In Burslem, the mother town of Stoke-on-Trent, is Port Vale, surrounded by the terraced houses of the old potbank workers. It very much is the beating heart of the community, as the Minister saw at first hand when he recently came to visit.

As Angus says about the 50+1 model, having fans in charge of key voting rights around the club would help to stop the clear greed of some owners and would allow clubs to be run in a way that benefits the fans, local communities and the good of the game. Clearly, there are some good owners who run their clubs sustainably and allow fans a good level of access to the behind-the-scenes running of the club. My bias will be obvious, but I will mention the Wembley of the north, Port Vale football club’s Vale Park, and Stoke-on-Trent’s second team, Stoke City; obviously I was being sarcastic there, before I get a deluge of abuse on Facebook. I am very lucky to have Port Vale in my constituency and Stoke City FC within the community. Both are run in a truly sustainable and fan-friendly way. To give just a few examples, Stoke City offer free travel for their fans and have frozen their season ticket prices for 14 successive years. Port Vale recently became the English football league community club of the year, having distributed more than 300,000 meals to local people in need during the pandemic. It also has the Port Vale Foundation; with the Hubb Foundation, it was one of the early pioneers in the holiday activities programme, which started in 2017 with the Ay Up Duck programme.

A small club, Milton United football club, raised £1,000 for a local lad, Ashton Hulme, who is getting a top-quality prosthetic leg. Sadly, due to a rare type of bone cancer, he lost his leg, and the academy at Crewe Alexandra have been doing fantastic work to support Ashton and his family at this difficult time, with more than £110,000 raised by local givers. As the hon. Member for Strangford (Jim Shannon) said, there are great clubs in the Premier League, such as Leicester City football club. The Foxes Trust tell me that it is broadly happy with how the club’s owners operate and the access it gets to the inner running of its club.

There are many more examples of owners who do not operate in this way, so I agree that there needs to be some reform, giving fans greater input into their clubs. There must surely be a way to protect key aspects of clubs, which are so much more than just businesses, so that their identities are not changed unrecognisably and they are run sustainably. However, the 50+1 model is not realistic for English football. It is hard to see how this kind of ownership structure could be brought in. I also have concerns about the impact it could have on our game. A range of voices, unsurprisingly including club owners but also fan groups, have said that the 50+1 model could seriously discourage investment.

In Germany, which made the 50+1 model famous, Bayern Munich has now won the Bundesliga nine years in a row. There is no significant investment into other clubs in the German league—unless we look at RB Leipzig, for example, where the fans and supporters are all Red Bull employees. One could say that that brings the beautiful game in Germany into disrepute. I do not think that anyone wants to see such things in our country. The 50+1 model is not the only reason, but it does seem to prevent ambitious owners coming forward. Frankly, owners will not want to invest in a club without being able to control its direction. If the 50+1 model is not the answer, what is?

One way to safeguard clubs for fans was suggested by Gary Neville. We could look at the 50+1 model as a veto or a voting structure rather than an ownership structure. Something along the lines of a golden vote on key decisions could be viable. To make changes to the club on heritage issues such as the name and location of the stadium, owners would need to seek the approval of supporters. Another option, as suggested by the Football Supporters’ Association, would be to let supporters buy equity in their club up to a certain percentage—10% or 15%, say—to give them a real say in how the club is run.

As well as giving fans more say in how their clubs are run, wider issues in football need addressing. That is really the crux of the debate and brings me to the second petition, which calls for the introduction of a new, independent football regulator. The petition, which was started by Alex Rolfe, calls for the Government to use the fan-led review of football’s governance to establish an independent regulator. Alex says:

“Like a referee, an independent regulator would safeguard our beautiful game impartially.”

He says that a regulator

“could protect the game against another attempt at a super league or other efforts to put money ahead of fans.”

Gary Neville and Alex agree that, like water companies, energy providers, financial services and the media:

“Football matters to millions and should also have a regulator of its own.”

It does seem that without an independent regulator, the glaring issues in English football will not be resolved. There is no overall leadership, so vested interests continue to prevail. The financial disparity between rich and poor has become obscene, frankly. The game is devoid of agreed priorities. The high-ups in football all know what the problems are, but to date there has been no collective will or incentive for the decision makers to get on with sorting it out.

As many of the people I have spoken to before today have spelled out, the issues are financial disparity and unsustainability, owner suitability rules, a power structure that is fundamentally out of balance, societal issues such as racism and homophobia in the game, and the exploitation of clubs and fans. Gary Neville put it well when he said that the banking crisis was the moment an independent regulator was needed. The European super league is the equivalent crisis in football, and if we are to ensure that the game remains something that we can enjoy as fans, as well as export around the world, the crunch time has arrived.

I will give a few examples to illustrate the scale of the problems. The team placed 20th in the premier league—thankfully, it is not my team, Fulham, which my grandmother indoctrinated me into supporting at the age of five—gets £100 million, whereas the winner of the championship gets just £6 million. Financial sustainability is in real danger, with clubs in the championship spending £837 million on wages despite receiving only £785 million of income in 2018-19.

[James Daly (Bury North) (Con)]

My hon. Friend has just made the key point. The fixed costs and wage structure of 99% of teams involved in English football are completely unsustainable. The wages paid out currently are simply unaffordable. My team, Bury, had 3,000 or 4,000 people watching every two weeks, and players were paid thousands upon thousands. How do we address that problem?

[Jonathan Gullis]

I know that Gary Neville is actually working on the salary cap committee that the EFL has set up to have a look at that very thing. My hon. Friend is right. Although Gary Neville used the term “redistribution of wealth”—as a Conservative, that made me shudder at the idea of socialism coming down the line—he meant that, at the end of the day, the Premier League holds all the wealth.

The Minister spent what probably felt like a long 10 months locked in a room with the head of the Premier League and the head of the EFL to come to some sort of consensus on bailing out clubs such as my beloved Port Vale in Stoke-on-Trent North, Kidsgrove and Talke. It should not have taken 10 months to come to that conclusion. Ultimately, football is for the fans, and in that moment, the fans were almost forgotten. I am very grateful to the Minister, who spoke regularly with me and other Members from across the House to keep us informed about what was going on in the negotiations. I am very grateful that he was able to bang heads together and get that important deal over the line.

Stoke City football club is owned by those who run Bet365, and although it would openly submit that it is not in need of financial support, it is very aware of clubs around it and below it that are, including Port Vale, which gets similar crowds to Bury. We need to see a fair share of the money in football trickling down, particularly to the grassroots, where the future generations will be coming through.

Those in the premier league have so much power that they can set their own punishment. The big six premier league clubs have been able to decide their own punishment for trying to break away and join the ESL, paying just £3.6 million each as a gesture of good will. Let us put that into context. These clubs spent more than £150 million over the last year on agents’ fees alone, and they seem to think that offering £3.6 million each is a suitable punishment for trying to destroy our beautiful game. Football has proven itself incapable of sorting itself out, and there is now a widespread consensus that an independent regulator is needed.

What would that independent regulator look like? We all agree that for a regulator to have real bite, it must be independent of current structures such as the premier league clubs and the FA. It must sit above the existing bodies and be able to enforce targets and judgments without the game structures. As voices such as the former Governor of the Bank of England Lord King have emphasised, the regulator will need an emphasis on financial as well as legal knowledge, to enable it to decide on new ways of distributing funds to the wider game, based on a funding formula to spread funding more fairly throughout the English football pyramid. This will also be important in introducing a new, proper, robust process to check owners before they take on a club. Indeed, it is not just the fans I spoke to who agreed on the need for a proper test of an owner’s suitability; that opinion was also shared by the owners I spoke to.

Supporters’ groups and those with experience of the game at the highest level agree that the regulator must not have any role in how the game is played. For example, it must not have a role in deciding on the place of VAR—the video assistant referee—in football, but must be limited to governance issues. There is also the question of how long a regulator would need to operate for. There seems to be a consensus among a cross-section of people involved in football that the FA should really be the regulator. However, it is a commercial organisation, as well as having some regulatory functions, so it does not really work. It is also reliant on the Premier League for its income, so is not independent in any meaningful way. An independent regulator could be set up, lead change in the game for a few years and then hand over to the FA once it has been made fit for purpose.

On the societal problems in football such as racism and homophobia, as well as representation of different groups, there are already targets in place. However, a regulator could enforce those targets and punish those who continue to pay only lip service to them. As David Davies—former executive director of the FA and member of the Our Beautiful Game campaign group—has said, football has the power to be a fantastic force for good. How to enable it to be a power for good is the question.

--- Later in debate ---

[James Daly (Bury North) (Con)]

It is a pleasure to serve under your chairmanship, Ms Elliott, and, as ever, to take part in any debate that my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) is involved in. What we have just heard is what football is about. I am fed up to the back teeth of football being talked about through the prism of only five or six clubs in the premier league who think that they have a God-given right to dominate football and to decide what happens to other clubs in their vicinity. I would not have believed the lack of care within English football from those major clubs, the EFL and the FA regarding Bury until I became an MP and found out the complete negligence of the history, hope and passion that has just been displayed.

Every single person in Bury was let down and nobody cared, and still nobody cares. I support the call for an independent regulatory body. Bury football club is not very important to the football pyramid—two times FA cup winners. Gigg Lane was built in 1885, and is one of the oldest football stadiums in the world. Along with Ashington and Greenwich in London, we produce more English footballers than any other town. Stewart Day took over the club in 2013. Four years later, wages had jumped threefold to £4.5 million. This was the point that I made to my hon. Friend the Member for Stoke-on-Trent North. During the same period, the club’s revenues grew by less than 50% to £3.2 million. That meant that Bury was spending 140% of its entire turnover on wages. The club was persistently late paying other clubs and making loan payments. The EFL and the football regulatory bodies did nothing. When Mr Day’s property business collapsed, the club was effectively insolvent. The EFL and the FA knew that and did nothing. What they did was allow the club to be taken over by a man called Steve Dale.

I would need hours to talk about Steve Dale. He took over the club for £1 with no way of funding it. That situation was a scandal, and it led to my town’s club being kicked out of the league. This does not just involve Parliament; it involves passion. I have seen personally how people in Bury have been affected by the loss of something that for 70 or 80 years people have been going to watch. It is part of their lives, their heritage, and what makes them proud of the town of Bury. The big premier league clubs around us did nothing. Manchester United and Manchester City did not come knocking on the door, saying, “What can we do to help?” There was nothing, and no local authority. The fans of Bury have been left to themselves.

The recent debate regarding the EFL super league was very nice. It suited certain people on TV to be outraged by that, but those same people never defended Bury or AFC Wimbledon because they do not care. Once we have, hopefully, a regulator that can at least give some responsibility to the football league pyramid that we have, perhaps that care will be back in the system.