Football Governance Bill [ Lords ] (Ninth sitting)

Lincoln Jopp Excerpts

Committee stage
Tuesday 17th June 2025 Public Bill Committees

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Jeremy. I wanted to take this opportunity to support my hon. Friend the Member for Sheffield South East’s amendment 141. It speaks directly to the principle at the heart of this Bill: ensuring a sustainable and fair future for football clubs throughout the pyramid, including those at the very heart of our communities.

The current structure of parachute payments, where clubs relegated from the Premier League receive tens of millions more than their counterparts, is a major contributor to systemic unsustainability. Those payments—£48.9 million in year one and £40.1 million in year two—create a gulf that clubs in the Championship must try to bridge, not with balanced support but with risky financial manoeuvres. The result is dependency on volatile owner funding, something that we have seen tragically unravel at clubs such as Bury, Wigan, and, of course, Derby County.

The backstop mechanism that the Government are introducing in the Bill is absolutely the right approach, providing a necessary and independent means for resolving disputes in financial distribution. But the two-year protected period on parachute payments really does risk hampering the ability of the new independent football regulator to respond with the urgency that is often required.

When the Bill was first published back in October, the understanding among many clubs, including my own local club of Grimsby Town—I declare no official interests, although it is important to our local community and is one of the teams in the lower leagues that really feels the financial strain from unfair distribution—was that the protected period would be set at 12 months rather than two years. Amendment 141, as I read it, simply seeks to reflect that original expectation.

Allowing for a one-season window still gives the regulator the discretion to proceed carefully, while also preserving the flexibility to act more swiftly should the need arise. This is about fairness, and also about credibility, because, if we are to empower the regulator, we should not be artificially constraining it before it begins its work.

I am grateful for the Minister’s attention to detail and her response to my hon. Friend the Member for Sheffield South East’s contributions so far. I really think that the spirit of amendment 141 aligns with all our shared ambitions to build a financially sustainable game. It is a constructive proposal, and I hope that the Minister gives it serious consideration.

[Lincoln Jopp (Spelthorne) (Con)]

It is a pleasure to serve under your chairmanship Sir Jeremy. I remind the Committee of my entry in the Register of Members’ Financial Interests. Unlike the hon. Member for Rushcliffe, I chose my tie with purpose this morning, to celebrate both the fact that this might be the last day of the Bill Committee and also events in Atlanta last night.

What we have seen is the thin end of the wedge. I am alive to the arguments about the disparity that parachute payments create in the overall economy of football. However, this Bill is undoubtedly the thin end of the wedge. It will come as no surprise to Members that I am a Conservative, and therefore I think the best form of regulator is competition. We all just ought to watch, because if the regulator has parachute payments within its purview, what is next? It will be agents’ fees, TV rights carve-ups, finishing position bonuses and cut prize money. Seeking to run football as some sort of socialist command economy will come unstuck. I put on record my concern that that is exactly what the Bill seeks to do.

[Stephanie Peacock]

The amendments deal with the final stage of the backstop mechanism. I will respond to the shadow Minister, and then I will respond to the wider debate, including to my hon. Friend the Member for Sheffield South East.

The final stage of the backstop mechanism is when, if the leagues have not been able to agree a complete deal themselves, the regulator will make an order to resolve whatever issues remain. That stage is set out in clause 62, and Members have tabled amendments relating to their concerns about the existing clause 62. The Government have tabled new clause 4, which would entirely replace clause 62, so the shadow Minister need no longer be troubled by many of the concerns he has set out. He was particularly bothered by clause 62(1)(c), but that will be taken out in its entirety. Our new clause 4 addresses many of the concerns reflected in hon. Members’ amendments, and I hope I can satisfy the Committee that new clause 4 is a positive change to the final stage of the backstop.

We should remember that by this stage of the backstop process the regulator will have assessed an application and representations from the leagues, set out the scope of the backstop by defining the questions of resolution, and highlighted the relevant findings in the state of the game report. The leagues will have been through mediation to resolve those questions. They will have been asked to exchange proposals to solve any questions outstanding after mediation, giving them another opportunity for compromise and negotiation.

New clause 4 sets out how the regulator will create a distribution order as a last resort if, after all those stages, the leagues cannot strike a deal. The regulator will first have 60 days to create a provisional order. We expect that during that period it will engage with the leagues as necessary to keep the process as collaborative as possible. Even at that stage, the regulator can continue to encourage an industry deal. Unlike the binary “winner takes all” model in clause 62, new clause 4 allows the regulator to design its order based on the evidence and drawing on any league proposals submitted.

The order the regulator designs must adhere to clear principles: it must not place an undue burden on league commercial interests; it must observe a delay before any reduction in parachute payments—I will address that in a moment; it must have regard to any duly submitted league proposals; and it must explain how it addresses relevant state of the game findings. The regulator’s objectives and general duties are paramount.

The leagues will then be able to submit representations on the provisional order. That feedback will help the regulator to shape an order that works for industry. The regulator will consider the representations and finalise all that into a full distributions order. That order will take into account any relevant issues raised by the state of the game report, the evidence that the regulator has gathered throughout the process, the engagement it has had with the leagues and any proposals they have submitted. The regulator will be best placed to design a solution that addresses the problems it identifies and delivers on its objectives.

If the backstop reaches that point, it is because the industry has failed to strike a deal, but we still want the solution to be as industry-led as possible. The regulator will be required to have due regard to the league proposals submitted. It can choose to directly lift aspects of the proposals into its order, but it is not required to adopt a league proposal wholesale. That is a slightly more flexible system that moves away from the inherent risk of a “winner takes all” model, and allows the regulator to carefully design a solution.

The model also allows for more evidence-based and data-driven decisions. It gives the regulator enough discretion to ensure that any order is as effective as possible in addressing the core financial issues facing the game. We are confident that the regulator, keeping in mind its objectives to promote sustainability and its duties to avoid adverse effects on growth and sporting competitiveness, can come to a balanced solution.

I thank everyone who has engaged meaningfully with this part of the Bill throughout its passage to help us to reach this version of the model. I am confident that the new approach is the right one. In light of that, I hope that Members will support the addition of new clause 4 and the consequential Government amendments in this group.

On the non-Government amendments, I will first address those tabled by the hon. Member for Old Bexley and Sidcup, and then those tabled by my hon. Friend the Member for Sheffield South East. Opposition amendment 125 addresses the regulator’s ability to terminate the distribution process if it does not receive a viable proposal from either league, but Government new clause 4 already gives the regulator discretion to deal with that scenario. As I have said, under new clause 4, the regulator need not accept either league’s proposal wholesale. It can design its own solution, drawing on the league proposals as appropriate. We think that greatly increases the chances that the process will reach a satisfactory conclusion, and ensures that football will not go without a distribution deal. On that basis, I ask for the amendment to be withdrawn.

--- Later in debate ---

On the amendments tabled by my hon. Friend the Member for Sheffield South East, I agree with the intent behind amendments 4 and 5, and hope to reassure him that the Government amendments address his concern.

[Lincoln Jopp]

The Minister said that just because the Bill enables the regulator to consider parachute payments, that does not mean that it will. The Minister is in the unique position of being the person who is going to appoint the football regulator, because the Secretary of State has stood down from that decision. Will the Minister ask the person selected to be the regulator whether they would like to exercise the power—whether “can” will mean “will”?

[Stephanie Peacock]

I will discuss that in more detail in a moment, but I gently say to the hon. Member that it will not be a personal decision by the regulator; as we have discussed, the regulator will make a decision based on the findings of the state of the game report and will be guided by the regulatory principles. I do not want to get drawn into speculating whether they will or will not do that. We need the state of the game report to be done quickly, so that if the backstop is triggered, the regulator can consider the findings in the whole and make an informed decision.

On amendment 4, as the Government amendments show, the regulator will issue a notice that sets out the relevant findings of the state of the game report, which will need to be addressed by a distribution order, and the order must explain how it addresses those findings. We are absolutely aligned on the intention behind amendment 5. This exact change—to ensure that the regulator need not adopt league proposals wholesale but can instead design its own solution—is core to new clause 4.

Amendment 141, tabled by my hon. Friend the Member for Sheffield South East, seeks to shorten the transition period for parachute payments. While a timely distribution order is a priority, we must ensure that there are adequate protections for relegated clubs, to prevent a cliff edge. That is why the Bill guarantees that there can be no reduction at all in parachute payments, for an absolute minimum of one year from the end of the first season to which a distribution order applies. Shortening that period would give relegated clubs less time to plan financially, putting them at greater risk of financial trouble. That is, after all, the issue we are seeking to address through the legislation. I know that may not be the answer that my hon. Friend wants, but for those reasons I hope he will withdraw his amendments.