Derby County Football Club

Nigel Mills Excerpts

Tuesday 28th June 2022 Westminster Hall

[Nigel Mills (Amber Valley) (Con)]

It is pleasure to follow my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), and I congratulate my hon. Friend the Member for Mid Derbyshire (Mrs Latham) on securing the debate.

If someone had told me 30 years ago, when I watched Notts County cruelly deprived of a championship play-off place by a late own goal at the old Baseball Ground, that I would have some role to play in trying to save the club, I might have expressed some doubt, but it is at this sort of time that the football family comes together. The only reason we have rivalries is because our rivals stay in existence; no one wants to see any club go out of business, least of all a club with the size and history of Derby County.

If I knew 20 years ago, when I watched my team, Notts County, spend three seasons in administration, that we would still have situations where owners could recklessly gamble the future of a club by overspending, in the hope of promotions that do not turn up, and that the club then ends up in a lengthy, expensive administration with preferred bidders who turn out not to have the money they said they had and those deals never quite complete, and we end up with millions of pounds still owed to HMRC, I would not have believed that we would not have found a way of fixing those problems. However, here we are again, with the same situation of a club effectively allowed to overspend, despite financial fair play rules being introduced in the meantime, and somehow racking up tens of millions of pounds of debt to HMRC when the Football League had procedures in place that meant if it did not pay one month’s pay-as-you-earn or one quarter’s VAT, it would receive a transfer ban so that debts could not be racked up to that size. That was to prevent that sort of situation.

I know that covid was one of the excuses, but somehow we have all of those situations still in play. That does not suggest that the financial regulation of football is anywhere near where we want it to be. We want that regulation so that we do not risk losing clubs in this situation because they have been allowed to recklessly overspend in an attempt to get a promotion to the promised lands and fortunes of the premier league, thinking, “Well, somebody else will pick up the bill at the end of the day.”

What thoughts does the Minister have on how we can further strengthen the rules that were meant to be in place to stop this, so that, finally, we can say that it cannot happen again. We could actually get the real-time monitoring in place. We could get advance approval of a budget. We could get advance approval of decisions. Perhaps we could say something like, “If you want to sign a player on ridiculously high wages, you must put the money in the club to pay the transfer fee and those wages in advance before the Football League will sign off the transfer”, so that the money is there to pay those wages all the way through to the end of the contract, and we do not find out, halfway through, that they cannot afford those players’ wages after all.

Perhaps such ideas should be in place to ensure that clubs have the money before they embark on ridiculously extravagant transfer operations or the situation we saw with Derby County. Otherwise, we will have all of these warm words and will slightly tweak a regulator, or get a new one, but fundamentally there will always be this temptation, and supporters will always want it—“Oh, if only we could just sign a striker in January, we could get in the play-offs this year and get promoted.” They then end up spending £25,000 a week on wages for a four-year contract that they cannot really afford because of the £100 million bonus. The temptation will always be there.

As a football fan, I want the dream that some very rich person will come and buy my football club and get me four promotions straight to the premier league, and that we can be in the champions league. That dream has worked for Man City, Newcastle, Chelsea, and for Blackburn a few years ago. We all want that dream, I suppose, so we do not want to stop any chance of somebody coming along and putting loads of money in. However, we must ensure that it is done in a sustainable way, and that it is that person’s money at risk, not the future of the football club. I would urge the Minister to focus on that, and on how we can get the regulations working, whoever the regulator is.

I am afraid that these situations will never be easy, because we have the cold, hard reality of insolvency law coming into play with the emotion of football, and those two things will never work in that situation. If we are being frank, the mess that Derby County was left in would have sent any ordinary business into bankruptcy. The only reason football clubs survive is the loyalty, history, tradition and community links that they have. Derby was unviable as a business, given the amount of debt it had racked up, which was almost more than its underlying value. That is why we must get this right.

Perhaps one other lesson we have learned from this process is that we do not want litigation getting into sporting competitions. We have had the Middlesbrough and Wycombe claims against Derby, and the rumours that Burnley or Leeds were going to take legal action against Everton because of its overspending. We want to know who has won the title or been relegated on the last day of the season, not four years later at the end of a court process.

I urge the Minister to look urgently at ensuring that, whoever the football regulators are, they have the real-time monitoring enforcement of the rules in place and can take quick decisions. When these issues come around, they should be resolved quickly, not several seasons later, issuing a points deduction that means not that Wycombe stays up, but some team three seasons later, which was not even in the league at that time or was in relegation trouble. It is completely unfair for those sanctions to come in years and years later. As we saw with Derby, the point deductions that got it relegated this season were for offences that were seasons and seasons before. It makes a mockery of the integrity of sporting competition if we cannot get the financial aspects of these rules right, and not only to protect clubs but to ensure that we have an actual competition with a fair result at the end of the season.