Football Governance Bill [HL]

Lord Burns Excerpts

Committee stage
Monday 9th December 2024 Lords Chamber

Imposing that top-down approach is well meant—the comments by the noble Baroness, Lady Young of Hornsey, the noble Lords, Lord Bassam, Lord Blunkett and Lord Mann, were wise, sensible and well meant—but we must remember that these are powers that we are giving in a very permissive Bill to an independent football regulator. They are powers that, I believe, have the potential to be misused. More importantly, there are powers already in place for local clubs to use at the grass-roots level to improve lives in the local community. For that reason, I oppose those particular amendments.

[Lord Burns (CB)]

My Lords, I support Amendment 54 with regard to the governance of clubs. I am sorry that I could not take part at Second Reading, but I have been present for a significant part of Committee. I have been a season ticket holder at either Sunderland or QPR for most of my life, and I now have three season tickets at QPR for myself, my son and grandson—I fear what I have done to both of them, but that is another problem.

In 2005, I undertook a report for the Football Association on its governance. Quite a number of important proposals that I made were carried out, but I am afraid that some were not. I sometimes think that, if they had been, there would have been for the Bill that we are having to spend so much time on now.

As far as experience goes, I was a member of the board of QPR for a few years and I have been the chairman of a bank. For me, there are some interesting similarities between football and banking: both are rather risky activities. The risks in football are about the performance of the team, the loss of value of players, either because of form or injury, and the risks involved in promotion and relegation. From my observation, and experience at the time, the biggest risk to clubs is overreaching; it is about taking too much risk. They are very often funded by owners or directors. Things go downhill and the directors then want their money back, if it was in the form of loans, which forces clubs into selling players at a loss.

The banks have a prudential regulator and I accept that there is a clear need for some body that has oversight for football as well from the point of view of prudential regulation. The point was made earlier that it is no good coming along once problems have emerged. You need systems and processes in place that monitor areas of activities where risks lie.

I am a great supporter of requirements of good governance in all kinds of organisations. I have sat on many boards, and I have seen good boards and not so good boards. There is a great deal of difference. It is significant to me that, when I was involved in banking and dealing with financial regulators, they placed great emphasis on the quality of the board in overseeing what was going on and particularly the risks it was undertaking. It seems to me to follow naturally that there should be the same requirement for the football regulator with respect to clubs.

I add—it is not for today—that I looked at the requirements and some of the governance issues that have been suggested for the regulator, but I am not sure all would pass the standards of good governance. For example, the exclusive role of the chairman in choosing the chief executive seems slightly odd for a body that has non-executive directors as well as a chairman. But I very much support this amendment.

[Lord Evans of Rainow (Con)]

My Lords, I rise to question Amendment 156 in the name of the noble Lord, Lord Bassam, and the noble Baronesses, Lady Taylor of Bolton and Lady Grey-Thompson. It is a great pleasure to follow the speech of the noble Lord, Lord Burns, because it is a reminder to us of how much experience we have here, from a board director of a Premier League football club to regular supporters and, in the noble Lord’s case, the holder of three season tickets. I pay tribute to him and his long-suffering son and grandson.

The point that I want to make about Amendment 156 is about season tickets. I do not think anybody in your Lordships’ House would argue against diversity in staff and senior managers. The noble Lord, Lord Mann, made the good point that about 40% of Premier League players are from a BME background, but that that does not continue into senior management. That has been the case for a long time and there is clearly more work to do on that.

However, the first part of Amendment 156 talks about

“the diversity of season ticket holders”.

When I saw that, I was worried about the law of unintended consequences. How on earth do you sort out that issue? For season tickets for my team there is something called supply and demand. There are several options for having a season ticket at Manchester United, as there are at other Premier League clubs, but how do you work it out? There is a waiting list, because of supply and demand. Several thousand people are waiting to become season ticket holders, so can the Minister advise the Committee how this amendment would be looked at?

There are a limited number of seats at a ground: in the case of Old Trafford, there are 75,000 seats and a waiting list of 10,000. I have had a season ticket for many years. Recently, they changed where you could sit at Old Trafford. I was unsure for a while whether I would have a ticket for where I moved to. I was told that there was no guarantee that I would have a ticket, which, as you can imagine, was quite distressing for somebody who had been a season ticket holder for many years. As it turned out, I was lucky enough to have a ticket, in the way that several thousand were not.

There is also the option of a league match ticket book. That enables me to go to Premier League games only. There is the cup option—the FA Cup, the Carabao Cup and the European Cup options. There is also a ticket forwarding membership of £20. I mention that because, if you are looking at diversity, you may not be able to get a season ticket holder, but if you want to go and see a Premier League club, becoming a member gives you access to get a ticket. It might not be your favourite Premier League game against your local opposition or any other club in the Premier League, but anybody could apply, become a member of their local club and should be able to get a ticket for a cup game. It may not be a Saturday or a Sunday; it may be a midweek game. Diversity is in evidence at Premier League clubs. For example, accessibility for disability has been there in many clubs for many years. When I sit there before kick-off at Manchester United, I see significant diversity around me. What surprises me is the people who fly around the world to see their team play, as they do for so many other Premier League clubs.

The Premier League is the best premier league in the world for a good reason. It attracts diversity by that very principle. I would be interested in how the regulator would ensure diversity of ticket holders. I say yes when it comes to staff and senior management—I do not think anybody could disagree with that. However, it is complicated, and so much to do with this Bill is the law of unintended consequences. You cannot tell people who have been on waiting lists for many years that they cannot become a season ticket holder because of some diversity report from a regulator.

Football Governance Bill [HL]

Lord Burns Excerpts

Report stage
Monday 17th March 2025 Lords Chamber

[Lord Birt (CB)]

My Lords, in truth, my family, unlike that of the noble Lord, Lord Parkinson, does not have to look back 70 years to find any trace of silverware, but I congratulate him and Newcastle on a thoroughly deserved victory yesterday.

If anybody doubts the intensity of fans’ feelings about their clubs, they should have been with me last night on a Tube train, where we were packed like sardines. For some reason, all the Liverpool supporters had gone home and I found myself in a carriage completely composed of Newcastle supporters. The sheer joy was manifest, as well as the sweetness and kindness of the Geordie nature, including taking pity on a disappointed Scouser.

Amendments 58, 59, 64, 65, 67, 72 and 77 in my name, and in the names of the noble Lords, Lord Burns and Lord Pannick, and the noble and learned Lord, Lord Thomas of Cwmgiedd, together define a wholly new process for determining fund flow from the Premier League down to the EFL in the event that the backstop measure is triggered. A wholly new approach is needed because the current process defined in the Bill is in almost every respect unfit for purpose. I will touch on why as I explain the alternative proposal that I and my colleagues place before your Lordships today.

Step 1 in the negotiation process that we have designed is the amassing of evidence in the “state of the game” report to inform the negotiation about every material aspect of the English game, including evidence about all the circumstances affecting the health and effectiveness of clubs in the major English leagues, including: a breakdown of their sources of revenue; how they invest and manage their finances; the balance between their equity and their debt; and evidence of how the English league performs financially and on the pitch compared with other European leagues. This is not an exhaustive list. Evidence should be the first building block of a sophisticated fund flow negotiation. Yet the Bill as it stands does not mandate an up-to-date “state of the game” report to begin, or to form part of, the backstop process.

Step 2 in our design is the appointment of a panel of three, experienced in mediation and arbitration, to manage the negotiation between the Premier League and the EFL. With all parties in the room, the panel would interrogate proposals and ensure that all relevant issues are surfaced, explored and bottomed out.

Step 3 would establish clear criteria against which the panel can assess the proposals coming from each league. The criteria that we lay out in our amendments include: maintaining the global appeal and competitiveness of English football; ensuring competitive balance within individual leagues; enabling well- managed clubs to rise up the football pyramid without risking financial instability; and ensuring long-term investment in stadium and facilities. Remarkably, the Bill as it stands is all but devoid of criteria to apply to determining the appropriate level of fund flow down the English leagues.

Step 4 is a process of binding arbitration spread over 100 days, with proposals from both leagues presented in defined stages. For example, after 75 days both sides table their final offers. If no agreement is reached by day 85, the panel makes the determination and announces it before day 100. In the original Bill, negotiation was planned to last only 28 days, a wholly inadequate timeframe for such a complex and critical negotiation. Also, in the current Bill, if the two sides fail to agree, a completely different group, the so-called expert panel—uninvolved in the process up to that point and with no exposure to the dialogue and debate thus far—must choose between one of the two deals; this is the so-called binary mechanism.

The expert panel cannot amend, adjust or find middle ground. In practice, for both leagues it is a game of Russian roulette. I guarantee that the binary mechanism in the Bill will incentivise gaming, not collaboration, compromise and the building of consensus. Seasoned professionals steeped in mediation and arbitration shake their heads in disbelief when this process is explained to them, not least because this is not a negotiation between two remote monoliths; rather, it is between two sides of the same family, where each year, in the top two leagues, six clubs out of 44 move from one side of the family to the other.

Our proposal for the backstop process is based on up-to-date evidence, the application of clear criteria, pro-longed dialogue and challenge, and a final determination by wholly engaged mediators if agreement is not reached. None of these factors is present in the current Bill.

We can applaud the remarkable success of the Premier League but I am not blind to the problems in English football. I trust that regulation will address them. For example, there are strong arguments for parachute payments. We have just heard some of them. However, the competition within the Championship needs to be assessed. There are good arguments for increasing the quantum of solidarity payments flowing down from the Premier League to the Championship but how those funds will be invested—in stadia, for instance—needs to be identified. Fund flow also needs to be considered in the context of how the Championship is managed.

In the last season for which data are available, the top club in the Championship had revenues five times greater than the bottom club—not a recipe for fair competition. In 2021, Championship clubs spent 125% of their revenues on wages, which is not a sign of good management. One-third of the teams that are currently in the Premier League were promoted from the Championship in the past 10 years. This is evidence of the system working. However, Burnley has been promoted to and relegated from the Premier League three times in the same period. The reasons for the recent yo-yoing of clubs up and down between the two leagues need to be understood.

I cite these examples to illuminate the complexity of the issues that the regulator will have to address, and which should be an integral part of that process for determining fund flow down the leagues. I hope that these examples also illustrate that a far more sophisticated backstop process is needed to address them than is contained in the Bill.

The fingerprints of both main parties are on the design of the backstop process. I hope that both will recognise that there is a far better way. I beg to move.

[Lord Burns (CB)]

My Lords, I congratulate the noble Lord, Lord Parkinson, on Newcastle’s win yesterday. As a season ticket holder of Sunderland in the late 1950s, I had to live through the humiliation of Newcastle winning three cup finals, in 1951, 1952 and 1955. I got my own back when I got to Wembley for the finals in 1973 and 1974. In 1973 Sunderland beat Leeds and in 1974 Liverpool beat Newcastle—rather convincingly. Putting aside my advancing years, I have to say that yesterday I was supporting Newcastle and delighted with them, probably for the first time in my life.

The noble Lord, Lord Birt, has explained some of the problems in the proposed final offer mechanism in the Bill and has presented an alternative proposal. I do not propose to go into the details but want to make some general points and emphasise the extent to which the criteria for any decisions on the distribution of revenues must be much broader than has been indicated so far.

During the debate, many noble Lords have reminded us how our integrated football pyramid is a very important part of our football arrangements; hence it is essential that the leagues work closely together. This is crucial. It is crucial when it comes to negotiation, particularly about the distribution of revenue. As the noble Lord, Lord Birt, said, we are dealing with two parts of the football family. Indeed, over time, many teams will move between the leagues. We therefore need a constructive mechanism to resolve differences that will work over several periods in the future.

The main point I want to make is that whatever process is in place, the criteria for making the choice between final offers should be as clear as possible and it should be relevant to the issues facing the football pyramid. Amendment 72 seeks to provide additional clarity on this. I too am grateful to the noble Baroness, Lady Twycross, for the number of meetings that we had to discuss this, at which she listened very carefully.