Football Governance Bill [HL]

Lord Harlech Excerpts

2nd reading
Wednesday 13th November 2024 Lords Chamber

[Lord Harlech (Con)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Jones of Moulsecoomb.

[Baroness Jones of Moulsecoomb (GP)]

Even if I am an Arsenal supporter.

[Lord Harlech (Con)]

Even if she is a Gooner.

This legislation seeks to overhaul football governance structures in England and Wales to make the sport more transparent, financially stable and responsible. Like any significant reform, it has both pros and cons, and has particularly sparked concern from the Premier League.

One of the Bill’s most significant provisions is the introduction of stronger financial regulation for clubs. The Bill aims to prevent the kind of financial mismanagement that has led to the collapse of several clubs in the past. The Premier League has seen several clubs run up huge debts. More than half of Premier League clubs reported losses in recent years. In the 2022-23 season alone, Premier League clubs collectively posted £1.1 billion in losses.

The issue of financial mismanagement is not confined to the Premier League. The English Football League has also seen its fair share of clubs that have gone into financial turmoil, leading to administration or outright bankruptcy. As the noble Lord, Lord Mann, explained, one of the most high-profile examples in recent years is Bury Football Club. In 2019, Bury, one of the oldest clubs in English football, was expelled from the Football League after it failed to meet financial obligations but could not find a buyer to stabilise the club’s finances. The collapse of Bury FC was a stark reminder of the financial vulnerabilities that can plague even historic clubs if the proper oversight is not in place.

As we have heard, clubs such as Bolton Wanderers, Macclesfield Town and Blackpool—clubs that are intrinsic, essential and at the core of their local communities—have experienced financial crises and been forced into administration. These situations affect clubs, their fans, local communities and the broader football pyramid. The Football Governance Bill seeks to address these issues by introducing stronger financial regulations and governance structures to ensure that no other clubs face the same fate as Bury.

The establishment of an independent football regulator is another cornerstone of the Bill. According to the 2021 survey conducted by the Fan Led Review of Football Governance, 92% of respondents supported the idea of an independent regulator, emphasising the desire for greater accountability in football governance. However, I would caveat that: 92% sounds like a lot, but the total number of respondents was 20,000. If you think about how many fans attend football across a weekend—on a Saturday afternoon or a Sunday—that is not a huge number. We have to think about what the fans who did not engage with the review want. That is just a word of caution before we proceed wholeheartedly down this track.

As other noble Lords have said, not all regulators in this country have been successful. While many are called independent, their accountability, particularly to Parliament, has been called into question. Can the Minister say how the Government will ensure this new regulator’s accountability to Parliament?

Proposals for more transparency in club ownership, and implementing a more rigorous owners’ and directors’ test, might help ensure that only financially responsible, ethical owners run clubs. This is particularly relevant given the history of some club owners who have brought financial ruin or unethical practices to their clubs.

An example is the Glazer family’s ownership of the club I support, Manchester United. Since the Glazers bought the club in 2005, Manchester United has been plagued by massive debt and a lack of investment in crucial areas such as infrastructure and youth development. The Glazers financed their acquisition of the club through highly leveraged debt, meaning that Manchester United was saddled with a debt of £500 million at the time of the takeover. Since then, the club has paid hundreds of millions in interest on this debt, money that could have been better spent on improving the club’s facilities or player acquisitions. Moreover, their ownership has been marked by a lack of transparency, with millions siphoned out of the club through dividends and “management fees”. This has sparked widespread fan protests and has contributed to a decline in Manchester United’s competitive edge despite its enormous global fan base. The Glazers’ negative impact on the club exemplifies the need for stricter ownership regulations, which the Bill proposes, to ensure that clubs are run in the best interests of their fans, their communities, and their long-term success.

However, the impact of these reforms will be felt not just in England; Welsh clubs that compete in the English football pyramid will also be affected. Welsh clubs such as Cardiff City, Swansea City and Newport County are integral members of the English Football League. These clubs will be subject to the same regulations and financial reforms as their English counterparts, meaning that they could benefit from increased financial solidarity payments from the Premier League and the EFL as part of the Bill’s redistribution proposals. However, there are concerns about how Welsh clubs will navigate their unique position within the English system. Welsh clubs are governed by the Football Association of Wales, rather than the FA, which adds a layer of complexity to any governance changes.

One of the main concerns from the Premier League is that the Bill represents excessive government intervention in football’s internal affairs. While the Government argue that reform is necessary, the Premier League contends that football should be governed by its authorities, not politicians or bureaucrats. Football, after all, is a global industry with complex dynamics, and many believe that government interference could stifle its autonomy and commercial success. According to a report by the Premier League, over £10 billion of commercial revenue flows into the English game each year, mainly due to the unique, autonomous structure of the league. Any increase in government regulation could jeopardise the commercial appeal of the league and its competitiveness, which might undermine the Premier League as the most profitable in world football.

As eloquently explained by my noble friend Lady Brady, another significant concern is the Bill’s proposed redistribution of football revenue. The Premier League generates substantial income from domestic and international broadcasting deals, and there are proposals to redistribute a more significant portion of this revenue to lower-league clubs. The Premier League earned £10.6 billion from broadcasting deals in the 2022-25 cycle. While this is a crucial source of income for the league, the Premier League argues that a large-scale redistribution could undermine its financial stability. Any reduction in this income could make it harder to maintain that competitive advantage.

In conclusion, while the Bill has some positive aspects, the dangers must be addressed. Redistributing wealth between leagues and introducing stricter ownership tests could have unintended and far-reaching consequences for the entire football pyramid.

Football Governance Bill [HL]

Lord Harlech Excerpts

Committee stage
Wednesday 4th December 2024 Lords Chamber

[Lord Addington (LD)]

I will make one small and quick point. We talked about this being for fans and the traditions of the game. These accepted historical changes to the structure are something that most people involved in football accept. I hope that when the Minister replies she will accommodate them. If not, a small amendment would be appropriate.

[Lord Harlech (Con)]

My Lords, I support all the amendments in this group. I spoke at Second Reading on issues affecting Welsh clubs and it is a pleasure to speak to this group of amendments.

The New Saints perhaps offer a different Welsh perspective from those that we already have heard. TNS FC, known for a brief period as “Total Network Solutions” after a sponsorship from a local IT firm, are a Welsh professional football club that play in the Cymru Premier League but is based completely in England—in Oswestry, Shropshire. I declare an interest as that is where I was born. TNS are the most successful club in the Welsh league structure, with 16 league titles to their name. Recently, they became the first side playing in the Welsh system to qualify for the group or league stage of any European competition after reaching the league phase of the UEFA Conference League. They play in the Welsh league because the club was formed in the village of Llansantffraid, on the Welsh side of the border, in 1959, later merging with Oswestry Town, based in Shropshire, in 2003.

TNS FC sit at the pinnacle of Welsh domestic football, while occupying the peculiar position of being a club based in England. Does the Minister not agree that it would be unfair that TNS would be the only club playing in the Welsh top division to be regulated? Would it not create a difficult situation for Welsh football if a club with Welsh roots, playing in the Welsh league but geographically situated in England, had to comply with regulations that other teams in their league would not, perhaps creating a competitive disadvantage?

[Lord Parkinson of Whitley Bay (Con)]

I thank noble Lords for their support for this group and apologise to the noble Lord, Lord Watson of Invergowrie. “Littered” was probably not a well-chosen word. I meant it in the sense of an adorable litter of puppies that enhance the joy of all of us. I am grateful too to my noble friend for giving another example in the shape of TNS. They seem to be the football league equivalent of him—both a Shropshire lad and a man of Harlech. I am grateful to the noble Lord, Lord Beith, for setting out his Amendment 23 and hope that the Minister can allay the concerns that have been raised on behalf of all these clubs and others in similar situations.

Football Governance Bill [HL]

Lord Harlech Excerpts

Committee stage
Monday 9th December 2024 Lords Chamber

[Baroness Taylor of Bolton (Lab)]

My Lords, I was not going to intervene, but the noble Lord has said time and again that the Bill may jeopardise British clubs competing in Europe. Can the Minister clarify that in Italy the legislative decree 9/2008—the Melandri law—and in Spain the royal decree law 5/2015 both deal with the distribution of audio-visual rights, and both insist on a significant amount of distribution to lower clubs? I have not heard that clubs from Italy or Spain have been refused participation in European competitions.

[Lord Harlech (Con)]

My Lords, I support in the strongest possible terms my noble friend’s Amendment 67A. After the backstop issue, this is the most important issue in the Bill. For the fans of some teams, the ability to play in Europe and their clubs’ fortunes there are more important than what happens with the national side. We are being asked to consider something so fundamental that we cannot do it with this proposed legislation unless the Government publish the letter and any subsequent conversations that they have had with UEFA. Otherwise, we cannot really take into account the full ramifications of what the Bill may do.

The noble Lord, Lord Addington, summed it up best when he said that it was the risk of the breakaway league that caused the Bill to come into consideration in the first place. I humbly request that the Minister shares with the Committee everything that UEFA has said in relation to the Bill.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, earlier there was a tetchy mood in which it was suggested that some of the contributions were simply time-wasting—and the word “filibustering” was used. When I was listening to the noble Lord, Lord Moynihan, I could see eyes rolling and people thinking that he was reading out an endless list and just time-wasting. But I think he did the Committee a great service by doing that, because he reminded us of the enormity of the powers that the Bill is affording a regulator. The noble Lord, Lord Pannick, who is not in his place, earlier made the point that it is just a regulator and that it is independent, and said, “What is your problem with this? We can trust them—they won’t do anything malign”. But this House and Parliament are telling that independent regulator what powers it has and determining what political interventions it can made. At least some of us have been concerned less about the financial situation but about the creeping politicisation of the number of powers that have been given precisely because it will not be a light-touch independent regulator, as I am sure the Government want it to be. That list was therefore very important.

It is our responsibility to make sure, first, that no unintended consequences come from the Bill and, secondly, that the Government are absolutely transparent about every single thing, including letters from UEFA. They should tell us what they fear and what the risks are. People keep talking about grown-ups in the room in politics. If we are going to be grown-ups, we want to know straightforwardly what the Bill risks. The idea that the only opposition to the Bill is from people who are ideologically opposed to regulation per se is malign. It is not true. Some people may be—but it is because of football that we need to know these things, and that is all.

Football Governance Bill [HL]

Lord Harlech Excerpts

Committee stage
Wednesday 18th December 2024 Lords Chamber

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I will say a few quick words about my amendment in this group. I am grateful to the noble Baroness, Lady Taylor, and the noble Lord, Lord Bassam, and other noble Lords for their amendments in this group. My Amendment 236 would introduce a new duty encouraging clubs to consult the Office for Place before making any decisions regarding their home ground or the construction of a new one.

I know that the Government have proposed to wind up the Office for Place, but I wanted to draw attention to its work, and in particular the excellent work of its interim chairman, Nicholas Boys Smith, and the board and staff who were working in Stoke-on-Trent. I think a lot of us share the disappointment, because we saw the Housing Minister after the election tell the BBC that the Office for Place would be kept. But, following the Budget, I understand that the Government are proposing not to keep it. I did think it could play an important role here, as it has in so many other areas of public policy.

My amendment offers a clear benefit in terms of promoting meaningful engagement and ensuring that football clubs consider the broader social and cultural impacts of their decisions. That is a theme that noble Lords touched on when introducing their amendments in this group. I think we all want to see clubs take a more holistic and responsible approach when planning changes to their home grounds, helping to preserve the heritage of these much-loved sites while ensuring that development is in the best interests of both the club and the community in which it is rooted.

In light of the need for more thoughtful and inclusive decision-making, my amendment tries to strike the right balance between promoting consultation with an expert body, fostering collaboration and ensuring that long-term planning for home grounds is done responsibly. I appreciate the points that noble Lords raised in their amendments and look forward to the noble Baroness’s response to them all.

[Lord Harlech (Con)]

My Lords, I rise briefly to support the amendments from the noble Baroness, Lady Taylor of Bolton. They sound very reasonable to me. We need to avoid the situation of groundless clubs. Coventry City come to mind. They had some very awkward years and some equally awkward ground sharing. We want to avoid groundless clubs and ground-sharing clubs. Avoiding stadiums being used as security for loans taken out by owners is incredibly helpful. I very much hope that the Minister will support that.

I also support the amendment from my noble friend Lord Parkinson of Whitley Bay. I declare that I am a member of Historic Houses and tend to bang the drum a little about heritage and aesthetics. To give a personal example, my local team are Shrewsbury Town. They had this amazing stadium, Gay Meadow, on the banks of the River Severn. They had a chap or chapette in a coracle who would go out into the river when the ball was kicked into it. Like many other clubs during the 1990s and 2000s, they moved to a sort of identikit shopping centre stadium. I guess it has some practical advantages, but it is pretty soulless and is like so many other stadiums. So I hope the Government can listen and take this into account. We have some amazing stadiums in this country. If we are going to get a club to move, let us move them to a better home, not a worse one.

[Lord Watson of Invergowrie (Lab)]

My Lords, I would like to say a few words in support of my noble friends Lady Taylor and Lord Bassam, some of whose amendments I have signed. I also want to pick up on the point that the noble Lord, Lord Harlech, has just made. He mentioned Coventry, who moved to Northampton, which is about 35 miles away and obviously not at all convenient for fans. My noble friend Lord Bassam’s club, Brighton, moved to Gillingham, which is, what, 70 miles away?

--- Later in debate ---

[Lord Addington (LD)]

My Lords, I am assuming that this is a probing amendment. Other sports—not British sports—do this, such as American football. Is it the Government’s intention that the regulator will make sure that such games are played at home? If the Minister can say that that is the intention, we are all comparatively happy; if not, we have a real problem.

[Lord Harlech (Con)]

My Lords, I rise in support of the amendment from the noble Lord, Lord Wood of Anfield. If all football fans were surveyed—more than the 20,000 to 30,000 that responded to Dame Tracey Crouch’s report—this would be one of the issues they cared about most. I hope the noble Lord, Lord Mann, will not mind me putting words in his mouth, but if he were here, I think he would say in his Yorkshire tones, “Home should mean home.” The Government must do everything they can to ensure that.

[Baroness Twycross (Lab)]

I thank my noble friend Lord Wood of Anfield for tabling Amendment 235. Clause 48 has been designed to prevent clubs unilaterally moving their home ground with no regard for the vital role it plays in the club’s history and identity, as well as its financial position. In essence, it is intended to capture instances such as Wimbledon’s move to Milton Keynes and is a really important protection in the legislation. The Government believe that this protection must remain in the Bill to enable the regulator to deliver its key objectives and ensure that home grounds have the appropriate safeguards in place. This amendment, however, seeks to address a slightly different but related issue of competition organisers relocating matches elsewhere. Many of the current instances of this are, for example, play-off matches at Wembley, which have become a key part of English football heritage in and of themselves.

However, I am aware that my noble friend wants this amendment to address situations in which a match could be moved outside England and Wales. Noble Lords will be aware that FIFA is currently reviewing its position on overseas league matches. I do recognise the point the noble Lord, Lord Harlech, made—although I would not presume to paraphrase my noble friend Lord Mann—and how significant this would be for supporters. FIFA has committed to looking at how it might impact supporters, as well as players and a number of other valuable considerations. While the industry is still considering its position on this matter, and many clubs have spoken against the proposals, we do not think the regulator should have a specific power to directly address this. However, the regulator will ensure that clubs consult fans on any changes to match days, including moving the location. The Government will remain in conversation with the relevant governing bodies on this developing issue.

I am happy to continue conversations with noble Lords who have a specific interest in this issue before we get to Report. But for the reasons I have laid out, I must ask my noble friend to withdraw his amendment.