English Football

Lord Knight of Weymouth Excerpts

Wednesday 8th May 2019 Lords Chamber

[Lord Knight of Weymouth (Lab)]

My Lords, I must first thank my noble friend Lady Taylor of Bolton not only for securing this debate but for the way in which she introduced it, and it is a joy to follow my friend the noble Baroness, Lady Morris of Bolton. The terrible story of Bolton Wanderers should be a salutary lesson to all of us as football fans, and none of us would want this situation for any club, let alone our own.

At its core, this is a debate about corporate governance including but recognising the circumstances peculiar to football. Football is a big business. According to Deloitte, Premier League and Football League clubs annually generate £5.5 billion-worth of revenue and contribute £1.9 billion in taxes. This needs good governance just in business terms alone. Today, I looked up a definition of corporate governance:

“The framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company's relationship with its all stakeholders (financiers, customers, management, employees, government, and the community)”.


Note the “transparency” with “stakeholders”, and here we go to the peculiarity of football: the fans.

Business management generally took a wrong turn in the 1980s when the dominant thinking emerged that shareholder value was paramount. Prior to that, business was much more run to deliver customer value, and shareholders would benefit as a consequence, but since the 1980s managers have down-played the other stakeholders: staff, society and customers.

In football’s case, the customers are the fans. They drive the demand for football, either live or on TV. The club owner benefits from one of the most inelastic demand curves imaginable. I continue to pay £1,200 to £1,300 for a season ticket at Arsenal to watch the home games of the men’s first team. I have therefore missed the glories of Arsenal winning the FA Women’s Super League this season. Instead, we have had a mixed time on the pitch at the Emirates Stadium, just in the last week winning a Europa League semi-final 3-1 and then having a terrible draw to Brighton at the weekend.

Yes, I am a stereotypical Arsenal fan with an inflated sense of entitlement, but I am also typical of very many football fans. If I do not like my supermarket service at, say, Sainsbury’s, I can easily switch to, say, Lidl, but me switching my custom from Arsenal to Spurs is simply not possible. It is way more likely that I would leave the Labour Party, after so many years of membership and service, than stop supporting Arsenal. Fans are fanatics, and we deserve a special status as stakeholders in the governance of football.

This last year has been a troubling time for us Arsenal supporters, not just on the pitch. Late last year, Stan Kroenke took over the entire club, taking it private. Mr Kroenke, according to Wikipedia,

“is the owner of Kroenke Sports & Entertainment, which is the holding company of English Premier League football club Arsenal, the Los Angeles Rams of the NFL, Denver Nuggets of the NBA, Colorado Avalanche of the NHL, Colorado Rapids of Major League Soccer, Colorado Mammoth of the National Lacrosse League, and the newly formed Los Angeles Gladiators of the Overwatch League”—

I gather the Overwatch League is something to do with e-sports. He is not really a football fan, let alone an Arsenal fan.

As part of this takeover, he forcibly acquired the shares owned by the fans, including in bodies such as the Arsenal Supporters’ Trust, or its vehicle Arsenal Fanshare, of which I was a board member. Having negotiated to buy the shares owned by Alisher Usmanov, a Russian magnate who was not in my opinion a fit and proper person to own a football club, Kroenke then owned 98.82% of the club. He was therefore entitled in law to force other shareholders to sell to him and take the club private. As a result, supporters who had held shares in Arsenal, had inherited shares in Arsenal, had held them since the war, have seen that link end. It is the end of custodianship, and the transparency and accountability that comes with supporter ownership is also lost.

Private ownership of football clubs, often by overseas Governments or investors, is now commonplace. It needs a reaction from the governing bodies and the Government. Given the weakness of the regulators of the game to enforce any meaningful fit and proper person test, which has been discussed, the need for transparency and accountability is all the more important.

Supporters need greater recognition and a greater role in their clubs. We are more than wallpaper for the TV companies, which are the real customers that owners care about. You can watch a game behind closed doors, but it is not the same without the fans. The players behave differently, and it lacks the theatre and the emotion. Imagine last night at Anfield without the fans—it is impossible.

Owners need fans but take them for granted because they are fanatics. That is why I welcome the policy of my Front Bench that football supporters should be formally represented on the boards of football clubs. There is also a parallel policy of giving workers a place on the boards of major companies. If that goes ahead, we need to tweak it, as I certainly can vouch that Arsenal would be better served with supporters on the board, rather than workers in the form of millionaire players such as Mesut Özil and Shkodran Mustafi.

We should also examine whether there is a way to force clubs to provide their fans with financial reporting information and meetings similar to the AGMs that plcs have to have as a way of maintaining accountability and transparency.

Finally, is it time also to look at making it a requirement that a certain portion of equity in a club should be reserved for supporter shareholders of that club? I am not talking about a great amount but enough to provide accountability and transparency.

This is, particularly for Bolton fans, a hugely timely debate. I wish that club well. I hope that the regulators of the game are listening, and I hope that they will do more for the fans of the live game.