Football Governance Bill (Third sitting)

Robin Millar Excerpts

Committee stage
Thursday 16th May 2024 Public Bill Committees

[Stephanie Peacock]

Q I have one more question: do you think it is right that player welfare is not in the scope of the Bill? Many people are rightly concerned about the link between football and dementia, for example.

Ben Wright: Again, that is possibly an area where the code of governance might be useful. We had long conversations at the outset of the fan-led review, and the White Paper does actually reflect quite a lot around player welfare. There were specific mentions—I know officials at the Department for Culture, Media and Sport are still working on this, and have taken it seriously —of player welfare within club academies and the right for independent support to be offered to those players.

I think the code of governance is absolutely a discussion to be had. What I would point to, though—I think the FA talked about this when they spoke to you the other day—is that there are well-established mechanisms in place around a lot of player welfare issues that have been very effective. A lot of those are actually enshrined in their contracts. One of the things that we, as a union, always slightly guard against is the idea that while football is not a normal profession, it is a normal job, and you have the rights to the same employment protections and rights of protection from your employers and expectations as anyone else should have. That is fundamentally where they should be enshrined. We would support that remaining the case.

[Robin Millar (Aberconwy) (Con)]

Q On Tuesday, we heard from academics that there was an inability to control costs in football. We also heard that the wage-to-revenue ratio has risen dramatically from 45% to 70%. We heard from Mr Mather, the chairman at Cambridge United football club, that his expectation is of a 30% uplift in player wages in this round of negotiations. He made the point, in fact, that Haaland at Manchester City will earn in two months what his club turns over in a year. Do you think it is an inability to control player wages that is the problem?

Ben Wright: You will probably be unsurprised to hear me say no. I think there is—

[Robin Millar]

It is not just me; there are a lot of people who will be interested.

Ben Wright: I absolutely understand, and I heard the evidence the other day as well. We have always taken the view that financial sustainability in football is fundamentally based on sensible, long-term club ownership decisions that are properly regulated and properly scrutinised. There is always a tendency, when that fails —when clubs potentially spend beyond their means, and when a market does arguably and potentially get inflated—for that to roll downhill, and it always ends up that the problem is the money being paid to the players, rather than the decisions that are being made to pay those players that amount of money.

A player has a right, like any other employee, to negotiate within the market that they exist in. We have always taken the view that it should not be the responsibility of the employees to ultimately become part of an artificial restraint on a market. Markets can be shaped, restrained and managed organically. A lot of Premier League clubs, for example, will have stipulations written into contracts that mean if they get relegated, players’ wages naturally go down. That, as far as we are concerned, would be a sustainable ownership decision, but it is something that has to come from the clubs and the owners themselves, rather than that kind of rolling down towards the players.

You make the point with someone like Haaland. We are always at pains to point out that very obviously, our most high-profile members will be people who play for the biggest clubs, but they are not reflective of the majority of footballers. I understand the reference that was made to the evidence that was given the other day, but most footballers do not live in those circumstances where they are on inflated, long-term contracts. It can be an incredibly insecure career, and I think that that needs to be recognised.

[Robin Millar (Aberconwy) (Con)]

Q It is a fact that the stone does roll downhill, and the key financial transaction in the whole of the football pyramid is the broadcasting rights negotiations between the Premier League and the lower leagues. In that way that money does follow downhill. It seems that players want to have their cake and eat it, being part of a system that rewards them very well and at the same time disassociating themselves from the decision-making within it. Apart from that, do you think the introduction of a football regulator could help owners to manage players’ wage expectations going forward?

Ben Wright: The first point I make about players wanting to disassociate themselves; one of the reasons we want players represented in the Bill is for the exact opposite of that, it is so that players do have a voice in this, which at the moment they would not necessarily be guaranteed. Could you repeat the second question?

[Robin Millar]

Would the introduction of a regulator would actually help owners to manage players’ wage expectations?

Ben Wright: I do not necessarily know that I would accept the premise that a regulator would help owners manage player’s wage expectations. What a regulator can do is make sure that the decisions clubs are making as private businesses about what to pay their employees are sustainable decisions. Ultimately, as we said at the start, this is something that football should have been able to do, but a regulator’s job as far as we understand it, is not to come in and, we would argue, artificially suppress wages. A regulator’s job is to make sure that when clubs write their budgets, and their payrolls, that they can fulfil them. Clubs as private businesses have got to be allowed to do that.

[Rachel Hopkins (Luton South) (Lab)]

Q If I may just touch on women’s football. What is your view about it falling out of the scope of the Bill as it is?



Ben Wright: We have been heavily involved in the Karen Carney review: obviously it is a different strand of work at the moment. We have taken the view that it is probably correct at the moment that it does not fall within the Bill. They are businesses, and leagues, that are at very different stages of development with very different issues. The stage we are at with women’s football and the professionalisation of women’s football— obviously, we speak representing every player in the WSL—is a very different stage of the professionalisation journey. I think it is right that the new structures being put in place around NewCo and the professionalisation of the Championship is allowed to be developed and owned in its own way before direct regulatory involvement. That is not to say that in the future there may not be a requirement or a need for a regulator to get involved. Given the scale and scope of the leagues, and their differing stages of development, we are happy, or comfortable, at the moment, that it does not fall under the auspices of the regulator. But that should not something that should be a sealed deal, and maybe that is something ready to be developed.

--- Later in debate ---

[Damian Collins]

Q Do you agree that, as Steve Parish said on Tuesday, the clause as drafted puts a far greater onus on the smaller Premier League clubs, for whom the Premier League broadcasting revenue is a much greater proportion of their income?

Tim Payton: The way Premier League broadcast revenue is distributed is fantastically collective. I think it is 1:1.6, so it really helps to keep a competitive balance, which of course Richard Masters was stressing the importance of to all of you. But the regulator is in effect having the powers over the wrong bit of the broadcast income. It is Manchester City, Manchester United and Arsenal’s revenue that must be included, so that we have a progressive system of redistribution, but also a check on where the game is heading.

[Robin Millar]

Q In the previous evidence sessions, we have had explained to us—in quite graphic detail at times—the differences between the leagues, the different challenges they face, the different ways that fans experience the game and so on. First, I am keen to hear from the fans’ perspective what you think those risks are across those leagues. Secondly, are you happy that the Bill addresses those risks, for example, in the way that clubs fail?

Alistair Jones: For the EFL, the precipice between the bottom of the Premier League and the top of the Championship is massively disproportionate to wherever it has been before. The simple fact is that over the 72 football league clubs, there is £450 million of losses just last year alone. That cannot continue—everything has to be sustainable.

For me and for Albion fans, a fairer distribution of wealth and a fairer redistribution of Premier League income would make that difference less between the 20th team and the 21st team in the country. At the moment, over £50 million of turnover is written off more or less overnight, and that is dependent on whether parachute payments are consistent. Also, the lack of competition is a big worry. The bottom three of the Premier League were the top three that got promoted last year, and they have just swapped places. It is more than likely that two of the three will be promoted this year.

Sarah Turner: We would like parachute payments to come under the independent regulator because we think it does make it an unfair competition. You are striving to reach the promised lands, so you will throw everything at it, and it makes owners gamble and spend recklessly, which is what has happened to Reading and many other teams. It is an unfair competition because you are pushing yourself so far to get there. We were relegated because of a points deduction to League One, and we are striving to get back up to the Championship.

Tim Payton: We are here because of the European Super League and the furore. I was in the meeting with the Prime Minister where he said he would “drop a legislative bomb” on it. What I hope you are all doing is passing legislation that means we do not need to throw bombs around but we have a good defensive mechanism in place. The two big threats to the heritage and competitive balance of the Premier League are all the revenue being earned outside of that in the UEFA and FIFA competitions and, as I said before, the relocation of our games. I would urge you to look closely at the suggestions we have made for tightening up in those areas.

[Matt Rodda]

Q As you said, there have been some serious problems with owners, not least at Reading. Do you feel that the Bill does enough to tackle that, potentially, through the regulator? Also, do you feel that there is enough of a fan’s voice in the process of raising concerns about owners?

Sarah Turner: It is a good start, but there is probably more we can do. I do not know if the owners and directors test is a duplication of the ones that the EFL will do or whether it will hand that over to the independent regulator. We think there needs to be some real-time tracking of what is going on at clubs because they are continuously overspending and risk-taking. We think the regulator should be taking an overview all the time of what is going on, rather than just at the beginning when they purchase.

Alistair Jones: I concur on real-time accountability around accountancy. From looking back at 2016 when we were purchased, it would be—quite simply; I am a simple man—a great case study to look at. If we could look at West Bromwich Albion, when they were purchased in 2016, and use that as a case study, what if the same company came and purchased West Brom now? Would it still be allowed? If that were the case, quite frankly there would be no point in doing it because it has proven that it was a poor opportunity to buy the club.

Tim Payton: In our evidence, we put forward the importance that the independent non-executive director can have. Following up from what you heard from Sanjay, we think that it would be powerful having in the Bill the need to have two INEDS on the board of each club, and the regulator obviously could then set the guidance and framework. Of course, we already have that in the corporate governance code, which is set out in—I think you mentioned—the Companies Act. Where I see it linking across to other areas of the Bill is the INED under the corporate governance code already has a lead responsibility to consider stakeholders, and of course the stakeholders in football are the supporters.

When we look for improved fan engagement, we do not just look at the fan engagement standard, but to the INEDs on the board being there to ensure that effective fan engagement is taking place. Good INEDs are an early warning system to many other things going wrong. The Minister will be aware of the improvements that have come to national governing body governance through the corporate code. He inherited all that from the pioneering work that Tracey pushed through. I really hope we can have the same framework for the football clubs under the IFR.