Football Governance Bill [HL]

Lord Wood of Anfield Excerpts

2nd reading
Wednesday 13th November 2024 Lords Chamber

[Lord Wood of Anfield (Lab)]

My Lords, it is a pleasure to follow my noble friend Lord Triesman and the noble Baroness, Lady Brady, who knows so much about the regulation of this game. I welcome the Bill. It is rare that a Government inherit a Bill from their predecessor and reintroduce it in a form that overlaps so substantially with the previous proposal. According to YouGov, 80% of fans across England—across all clubs and regions—support the idea of a regulator. Of course, there have been—as the noble Lord, Lord Parkinson, mentioned—governance structures in place for more than 160 years, and in many ways it is crowded territory. However, although the FA, Premier League and EFL have a range of powers, their governance is centred on the integrity of the leagues rather than the activities and sustainability of the clubs themselves.

There are many reasons why a regulator covering the leagues should be put in place. Many of these are to do with the economics of football. It is a huge industry, contributing over £9 billion to the UK economy, yet at the level of individual clubs, unregulated commercial behaviour can, and often does, have damaging consequences. Football clubs also provide significant public goods, cohesion and cultural benefits that may conflict with the desire for profit maximisation. The industry is full of very thorny collective action problems: wage spirals, debt spirals and excessively risky behaviour in the search for success. Clubs can be far too reliant on individual owners, who often use club assets as security on loans and debts. There is a lot of poor financing and overspending and a lot of debt in general.

On top of these general economic issues, we have seen a range of recent cases mentioned earlier, where relegation combines with these ownership practices and weak governance to produce existential threats to clubs that have been at the heart of their communities for a century or more. Finally, as the regrettable Super League episode showed, the lure of greater profits, particularly at the top end of the Premier League, can threaten the integrity of the competitive leagues themselves.

Given that something has to be done, therefore, the proposals set out in this Bill seem to me to have much merit. The proposals on licensing and on powers to challenge bad practice among owners should, at least, help financial stability and deter some of the excesses of bad practice. The duties on clubs to engage with fans, including on ticket pricing, as well as fundamental changes in club practices, have been widely welcomed. The backstop provision to enable the regulator to compel a financial settlement—although we will return to some of the detail of that later—should ensure that there is no recurrence of the really regrettable impasse that has now been going on for far too long between the Premier League and the EFL.

I want to flag four areas where I think this House could add value in scrutinising the detail of this Bill when we get to Committee. The first is propelled by fans’ concerns about the continuing interest of elite clubs in moving domestic league games overseas, something that the chairman of my own team—Liverpool—is still keen to make happen. Clause 48 rightly imposes a duty on regulated clubs both to consult with fans and to seek regulator approval before any domestic league or competition match is relocated. However, some fans worry that the definition of a home game needs to be much more robust. Back in 2008, fans in this Chamber will remember that the Premier League tried to introduce the idea of an extra game—the so-called “39th game”—on top of the full home-and-away fixtures. Would this extra game have been covered by the Clause 48 provisions, centring as they do around the term “home game”? I think more comfort on these clauses being watertight would be good.

Secondly, there is the vexed issue of the backstop, which we have heard a lot about already. This is a fraught area, but everyone can agree on a few things: that the revenue that is at stake in the distribution and solidarity payments is vital for the health of clubs across England; that the EFL is an extremely commercially successful organisation in its own right even before these payments, with one of the most lucrative TV deals in Europe; and that solidarity payments must not be used to subsidise bad management by club owners down the football pyramid.

I have two quite different and, your Lordships might think, conflicting concerns about the backstop provision. First, on the relevant revenues in question, detailed in Clause 56(2) as

“revenue received by a specified competition organiser”,

one of fans’ worries is that this definition of the relevant revenue does not include revenue earned by elite clubs outside of their participation in the league. Money earned from, for example, UEFA, commercial revenues, overseas tours, pre-season friendlies and FIFA Club World Cups, is the revenue that often lies at the root of many fans’ worries about competitive balance and sustainability. The fans worry that if this is excluded from the scope of the regulator, clubs will seek to expand these revenues even further, impacting on domestic competitions in much the way that saw FA Cup replays scrapped earlier this year so that big clubs could earn even more in the expanded Champions League, for example.

My second worry is quite different. The mechanism proposed by the Bill in the event of an impasse involves, as we have heard, a triggering process, the requirement of mediation and, in the event of a continuing stand-off, the ability of the regulator to pick one of the two leagues’ proposals. From my economics background I know that there are good economics game theory reasons for why this is resolution process is in place. However, the politics of redistribution of money from the wealthy Premier League looms large over this sound proposal. It is worth us taking care to ensure that we are not, as the noble Baroness, Lady Evans of Bowes Park, mentioned, introducing a mechanism that gives the EFL no incentive to get a deal, so as to force the regulator into a politically pressured choice for more money for the EFL. That would be bad for good faith bargaining but would also put English football in bad odour with UEFA, which has already expressed concern that these proposals should not politicise football governance, saying specifically:

“Mandating redistribution which affects the competitive balance in the game and wider European competition would be of concern to us”.


Lastly, there is the relationship between the regulators and the existing leagues. The Bill stipulates a range of regulatory interventions in the event of misconduct and licence breaches, but it says very little about the regulator collaborating with the existing Premier League, English Football League and National League authorities. In any governance arrangements, you would want collaboration with existing league authorities to be a presumption of the regulator, and perhaps a principle of subsidiarity embodied in the legislation that the regulator will step in with its remedies only when the relevant league has shown that it cannot or will not take the steps required.

The reason for this is not to dilute the powers of the regulator but to stop politicisation in ways that should be avoided, to avoid duplication and inconsistency in the governance regimes of the leagues and the regulator, and so that regulatory interventions on finance and licence conditions should come only at the end of a menu of options for responses that also includes the sanctions that the leagues themselves control, such as sporting sanctions. It is worth us considering language at key points in the legislation that requires more explicitly co-operation between the new regulator and the league authorities.

Football Governance Bill [HL]

Lord Wood of Anfield Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

[Lord Finkelstein (Con)]

I have a slight fear that I may be intervening in the intervention on an intervention on the answer to an intervention, but still. Among my interests is that I am a director of Chelsea Football Club and director of its foundation. I also had the honour to be a member of the fan-led review committee.

I urge that the Bill and the debate should define “fans” as widely as possible. I am afraid that I think the noble Lord is completely wrong, certainly as far as my club is concerned. We have hundreds of thousands—indeed, millions—of fans all around the world. We care deeply for them and I am very much engaged in our fan mechanism, in involving them. I am committed to the principle of fan engagement that the Crouch committee laid out. We want to talk to our fans all over the globe and we have an interest in prospective fans, not only current fans.

Of course, the fans who attend Stamford Bridge, which is where Chelsea play at home—I feel that I have to explain that—are very dear to us and play a core part in the definition of who a “fan” is, but they are certainly not the only fans. It would be a mistake for the regulator to start its work thinking that that is how the Bill considers it.

[Lord Wood of Anfield (Lab)]

Regulators do not define who fans are. Regulators define fans for the purpose of consultation in pursuit of their duties. I am a Liverpool fan. Wherever I go in the world—whatever I am doing—I always find the local bar, and there are lots of Liverpool people there to support the team when a game is on, and I make lots of new friends. Liverpool as a club should of course take those fans seriously in its commercial thinking, its tours and other long-term strategy, but the idea that the regulator should consult with the San Diego Liverpool chapter when it is considering issues to do with implementing the Bill is ridiculous. I do not think San Diego-based fans will want that either. The club should take those interests into consideration. We are talking about the connection between a regulator and the pursuit of its duties, and the issue of protecting communities.

[Lord Finkelstein (Con)]

Is the noble Lord saying that he thinks the club should not ask those people as well as other fans? If he thinks that, why should that not be part of the definition of the “fan” under the Bill?

[Lord Wood of Anfield (Lab)]

I did not say anything about what the club should do. We should not tell clubs what to do about their conception of their own fans. I am talking about the relevant categorisation of what “fans” means for the purpose of the regulator pursuing its duties.

[Lord Lisvane (CB)]

My Lords, it would be useful to determine who has the Floor.

Football Governance Bill [HL]

Lord Wood of Anfield Excerpts

Committee stage
Monday 16th December 2024 Lords Chamber

[Lord Pannick (CB)]

The noble Lord, Lord Parkinson, posed a number of questions about the operation of Part 3 in relation to licensing functions. I will add one further question, to which I do not necessarily expect an answer today. Pursuant to UEFA regulations and delegation from the FA, the Premier League currently licenses clubs for the purposes of their participation in UEFA club competitions. I declare an interest as a season ticket holder at Arsenal Football Club—I realise that some of the other clubs supported by noble Lords would not have an interest in this matter for various reasons. My question is: will this function of the Premier League be affected by Clause 15 or any of the other clauses in Part 3?

[Lord Wood of Anfield (Lab)]

My Lords, I will speak to my Amendments 168 and 169, which connect with some of the themes raised by the noble Lords, Lord Pannick and Lord Moynihan. One of the most sensitive areas of this regime is the imposition of discretionary licence conditions on clubs. The purpose of my Amendment 169 is to say that the regulator can introduce such conditions only after being satisfied that the conditions would

“not be met by the club complying with all rules, requirements and restrictions which … will be imposed by a competition organiser”.

Essentially, this does not go as far as full delegation to leagues such as the Premier League—I agree with the noble Lord, Lord Pannick, on the broad criticism of that—but would introduce in one specific area what might be thought of as a limited principle of subsidiarity for the imposition of discretionary licence conditions.

The main purpose is to ensure that the regulator observes the norm of good regulatory co-operation—with not just the Premier League but all the leagues—by looking first to the adequacy of league arrangements in response to specific problems that will be the most politically and competitively sensitive, before stepping in and intervening with club-specific conditions attached. Why? It is because subsidiarity is a good principle of regulation where it is not inconsistent with the application of the intent of the law; also, I believe that it will foster the habit of regulatory co-operation more generally—not just on discretionary licence conditions. It will avoid duplication and confusion in regimes, and it will equip the regulator with a bit more political protection when it comes to the charge of political interference, because it can say, “We’ve looked to the leagues to step in first before stepping in”.

In the case of the Premier League specifically—let us face it, that is where the rubber hits the road on this issue most of all—it gives it, first, a chance to maintain system-wide and league-wide governance integrity before club-specific rules arrive, rather than risking the intervention of the regulator, leading to fragmentation between clubs. Secondly, it allows differences in application, inside the Premier League, of the general IFR rules in ways that account for differences in risk, finance and strategy, which we have heard discussed many times in Committee.

An example is capital buffers. The regulator will want to require cash reserves, and in the case of the Premier League, you want to take account of those areas where there are genuine differences from lower league clubs—differences in player registration rights, meaning players are more liquid assets, for example. The Premier League could design league-wide rules that are sensitive to these different conditions. The amendment does not say that Premier League rules would trump regulator rules, but where there are concerns, the regulator would look first to the Premier League to modify league-wide rules that respond to the concerns before the regulator directly intervenes.

Another scenario might be an issue of liquidity management inside a Premier League club. This amendment would point to the regulator first looking to the Premier League to take steps such as enhancing its monitoring systems, developing new metrics, et cetera, before it goes to individual licence conditions. This, again, would ensure that the league could retain the integrity of league-wide rules, rather than Premier League clubs having individual regimes as and when they trip up over certain rules.

What if the regulator wanted to intervene with a specific club as a matter of urgency? It could still do this. What if the regulator thought Premier League rules were inadequate to the task and insisted on imposing a licence condition that cut across and undermined league rules? Ultimately, it could still do that too; in fact, it may think that was the right thing to do. But what the amendment would do is introduce a prior stage that looks to the leagues to make league-wide governance adjustment first. In the name of good regulation, that seems to me a sensible, limited amendment.

[Baroness Brady (Con)]

My Lords, I rise to offer my support to the amendments tabled by the noble Lord, Lord Wood, and by my noble friend Lord Moynihan. These amendments take quite different approaches, but they seem to be driving at the same thing: a desire to clarify and improve the financial licensing section of the Bill. In my view, they highlight a really important principle—that the IFR should adopt an outcomes-focused, light-touch approach to developing its regulatory framework, and that it should work closely with football to do that.

These amendments would, in my view, be a vital step towards achieving a good balance in football regulation, one that safeguards financial sustainability by targeting clubs that have problems, which are clearly critical, while also respecting the unique responsibilities and expertise of the competition organisers. The current drafting of the Bill leaves critical questions unanswered about the regulators’ approach to financial regulation.

It is currently unclear whether the IFR will take a blanket, rule-driven approach that imposes granular financial requirements such as specific liquidity ratios or debt-to-equity thresholds across all clubs or, alternatively, whether it will adopt an entirely bespoke approach, applying discretionary licence conditions to every single club—all 116 of them—according to their unique circumstances and business models. If the IFR did the latter—it is entirely open to the IFR, because that is how ambiguous the Bill is—it would significantly undermine competition organisers’ ability to maintain a level playing field. Those licence conditions would necessarily need to be confidential to protect commercially sensitive information. For example, my club, West Ham United, would have no idea whether other comparable clubs were operating under similar conditions or not. That is a recipe for competitive chaos.

These amendments would mean that the IFR would need to take a far more balanced path to an outcomes-based approach, setting high-level principles and objectives while allowing leagues to implement their own rules to achieve those outcomes. Of course, they would be able, and must be able, to take a targeted approach to clubs getting into difficulties, stepping in at any time if those rules were deemed systemically not to be working, or if there was urgent concern about a single club or group of clubs. A more outcomes-based approach would ensure that the IFR focuses on the “what” rather than the “how”. By defining clear financial outcomes such as on balance sheet health, resilience, transitionary finance and asset protection, the IFR could establish a framework that addresses financial risks while avoiding unnecessary micro-management of clubs.

There is no reason why financial licensing should not follow this proportionate, targeted model, particularly as competition organisers such as the Premier League and the EFL already have sophisticated financial sustainability rules in place. If another competition organiser, perhaps one that has had less success in enforcing financial rules, wishes to give up this area completely to the IFR, that would be its right, but let us not forget that competition organisers have a deep understanding of their clubs’ financial dynamics. They already operate robust systems to monitor and enforce financial sustainability; for example, the Premier League has detailed profitability and sustainability rules, which are strictly adhered to, while the EFL has its own financial monitoring requirements tailored to the unique challenges faced by its clubs.

Football Governance Bill [HL]

Lord Wood of Anfield Excerpts

Committee stage
Wednesday 18th December 2024 Lords Chamber

Moved by

[Lord Wood of Anfield]

235: Leave out Clause 48 and insert the following new Clause—
“48 Duty on competition organiser not to arrange matches away from home grounds(1) A specified competition organiser must notify the IFR where the organiser considers that there is a reasonable prospect of the organiser entering into arrangements whereby a match between two teams operated by regulated clubs might be played at a ground that is not the home ground of either team.(2) A notification under subsection (1) must be given as soon as reasonably practicable after the organiser considers the duty under that subsection to have arisen.(3) The organiser must obtain the approval of the IFR before it enters into the arrangements mentioned in subsection (1).(4) The IFR must grant approval for the organiser entering into those arrangements if the IFR is satisfied that the arrangements—(a) would not harm the financial sustainability of the competition or of English football,(b) would not cause significant harm to the heritage of the competition or of English football, and (c) have the approval of UK-based supporters including those of the clubs involved.(5) The IFR may not grant approval in any other circumstances.(6) The IFR must, as soon as reasonably practicable after the organiser has sought approval, decide whether to grant approval under subsection (4).(7) The IFR must notify the organiser of its decision to grant, or not to grant, that approval and give reasons for its decision.(8) In this section “home ground”, in relation to a regulated club, has the meaning given by section 46(10)(a).”

[Lord Wood of Anfield (Lab)]

My Lords, I will be brief, partly because dinner is fast approaching and partly because this is an amendment to probe the Minister’s response to a good existing clause, Clause 48. This clause is about preventing home matches being relocated. The amendment is to probe whether the provision is sufficient to meet widespread fan concerns about possible exceptions.

There is increasing discussion about domestic football games being moved overseas. We have seen statements from the chairman of my own team, Liverpool, and broadcasters such as NBC are talking about relocating Premier League games abroad. The FIFA working group is reviewing its policies to allow this. There are all sorts of stories, rumours and plans afoot to possibly allow Latin American domestic games to be played in the United States. There is historical evidence showing that the Premier League once proposed an additional 39th game to the season, which would not be played at the ground of a Premier League club. We also see countries such as Saudia Arabia that have intervened—let us put it that way—in sports properties, buying them and moving them around, for golf and boxing. There is reason to think that this is not a very remote possibility.

The Bill sets out to prevent clubs relocating matches away from home stadia without the approval of the regulator. I hope that enjoys widespread support; it is welcome and important. The point of my amendment is to probe the idea that the clause is not quite as watertight as it should be. The concern is that the current wording is based on the relocation of matches which are already designated as home matches. What happens if the competition organiser allocates games directly, before the season’s fixtures are issued, to Riyadh, Los Angeles, Singapore, Paris or wherever? They could claim that no home game is being relocated and say, for example, that weeks 10 and 20 are weeks in which games are played elsewhere. What if the 39th game proposal, so widely reviled by fans, is revived? That is not about the relocation of a home game; it is an extra game.

The new clause addresses this by placing a requirement on the regulated competition organisers to seek approval from the regulator before moving a domestic game overseas. That way, there is no longer a need to define what a home game is to bring it in scope, and it ensures that as part of the assessment of this request to relocate a game, the regulator must specifically consult UK-based fans of the clubs involved in the relocation. Importantly, this does not rule out the relocation of a game; it requires any additional fixture that is part of a competition to be subject to consultation in the way specified in the Bill.

I would welcome the Minister’s observations on this amendment and her assessment of two questions. First, what happens if the competition organiser allocates games directly to an overseas location? How will the existing clause protect against that? Secondly, what happens if the competition organiser creates a new format, such as another 39th game that cannot easily be defined as a home game? The amendment tries to cover those extra, niche cases. With that in mind, I beg to move.

[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.

[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.

[Lord Wood of Anfield (Lab)]

I thank the Minister for that reply. I also thank her—I did not before—and her officials for the generous way she has spared time not just for me but for lots of other Members of this House over the last few weeks. It is really appreciated.

I understand what the Minister says, and I also understand that FIFA is currently revising its proposals. We have spent a lot of time worrying about provoking FIFA, and I understand why there is sensitivity there. The requirement to consult fans on moving matches assumes that there is already a scheduled match that needs to be moved. My amendment is about two problems that there are in fact technical ways around. So, that issue is still a live one. There will be more discussion about this, and I know the Minister is going to be as generous with her time as she has been already, so with that in mind—

[Lord Bassam of Brighton (Lab)]

I urge the Minister to give this some more thought, because it is a pertinent and powerful core issue, and we should all be grateful to the noble Lord, Lord Wood of Anfield, for raising it. As the noble Lord, Lord Harlech, said, fans worry about these things; they do not want to see “home” meaning something completely different. That is why we should have something in the Bill on this topic.

[Lord Wood of Anfield (Lab)]

I thank the noble Lord, Lord Bassam, very much. My two teams are Liverpool and Tonbridge Angels of the National League South. One is an internationally competitive team—and the other is Tonbridge Angels; but place is crucial to both teams. If you are a fan of Liverpool from Los Angeles or Singapore, the place of Anfield and the locality and the community relationship are absolutely part of what it is you support. Home and away fixtures are a routine part of how the Premier League competition is conducted. That is why this is essential, not just to large clubs but to small clubs across the country.

[Lord Goddard of Stockport (LD)]

This issue has arisen before. The FA Cup is the oldest cup competition in the world, yet one club that held the title did not enter it the following season in order to play a match in the world championships in South America. Does the Minister think the regulator would have the power to prevent that happening in future? It is the kind of thing regulators should be looking at.

[Lord Wood of Anfield (Lab)]

I am grateful to the noble Lord. That is a very live issue as well, but I do not want to expand my amendment to that.

I am conscious of the time, so with those caveats, and with thanks to colleagues who have intervened, I beg leave to withdraw my amendment.

Amendment 235 withdrawn.