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.