Football Governance White Paper
Debate between Roger Gale and Stuart Andrew(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
I take your point on board, Mr Deputy Speaker, but please forgive my enthusiasm for this great announcement that we are making today.
Let me start by offering my deepest condolences to John Motson’s family. John had an incredible impact over his 50 years working at the BBC, and his legacy as a legendary commentator will not be forgotten.
With your permission, Mr Deputy Speaker, I will make a statement on the Government’s reform of football governance. As I am sure many Members on both sides of the House will agree, in this country football is more than just a sport. It is part of our history, our heritage and our national way of life, bringing communities throughout the country together week in, and week out. We invented “the beautiful game”, and the Premier League and the English Football League are true global success stories, with matches exported and watched in 188 countries across the world and streamed into 880 million homes.
Despite this global success, however, it has become clear in recent years that there are systemic issues at the heart of our national game. Since the premier league was created in 1992, there have been 64 instances of clubs collapsing into administration. Some are historic clubs that we have lost forever, taking with them chunks of our history and heritage, and leaving huge holes in their communities. Bury football club is one example. Over its proud 134-year history, it managed to survive world wars, countless economic cycles and 26 different Prime Ministers, but it was driven to the wall by financial mismanagement, which damaged the local economy and left behind a devastated fan base. Those fans are still coming to terms with the loss of their beloved club. But it is not just Bury that has been affected: the same is true of Macclesfield Town, another century-old club, and of AFC Rushden & Diamonds. Countless others, such as Derby County, have been driven to the brink after stretching far beyond their means.
Despite the global success of English football, the game’s finances are in a parlous state. The combined net debt of clubs in the premier league and championship is now around £6 billion. Championship clubs spend an unsustainable 125% of their revenue on player wages alone and some clubs face annual losses greater than their turnover. Many, if not most, club owners are good custodians of their clubs, but all too often we hear of flagrant financial misconduct, unsustainable risk-taking and poor governance driving clubs to the brink. Owners are not just gambling with fans’ beloved clubs, but threatening the stability of the entire football pyramid.
Aside from the financial roulette putting clubs’ futures at risks, this is also about the way that fans have been treated. Over the past two decades, too many lifelong supporters have been let down, ignored or shut out by their own clubs. That has included the decision to move their stadium to a different part of the country, as happened with Wimbledon FC, or to change kit or badges without fan approval, such as when Cardiff’s owners tried to change the traditional kit of the Bluebirds, from blue to red. We also saw it with the European super league, when a small group of club owners planned, without any engagement with their fans, to create a closed-shop breakaway league, which goes against the very spirit of the game.
Football would be absolutely nothing without those fans, and yet too often their voices have not been heard. But we have heard them. That is exactly why I made sure that my first meeting as Minister for sport was with fan groups. I heard at first hand how poor ownership and governance can leave clubs at the mercy of careless owners. In our manifesto, we committed to a root-and-branch review of football, with fans at the very heart of that review. That review, excellently chaired by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), highlighted a number of key issues that urgently needed resolving in football, and today we are acting on its recommendations, with the most radical overhaul of football governance since the rules were first invented in a London pub back in 1863.
With this White Paper, we will do five key things. First, we will bring in a new independent regulator to make sure that clubs are financially resilient. The regulator will operate a licensing system for all clubs in the top five tiers of English football. Those clubs will have to show that they have sound financial business models and good corporate governance before being allowed to compete. They will also be tasked with ensuring the stability of the wider football pyramid.
Secondly, we will strengthen the owners’ and directors’ test, to protect clubs and their fans from careless owners. There will be greater tests on suitability and on the source of funds. Thirdly, we will give fans a greater say in the running of their clubs. This will include stopping owners from changing vital club heritage, such as names, badges and home shirt colours, without consulting the fans first. Likewise, clubs will have to seek regulator approval for any sale or relocation of the stadium, and fan engagement will be a crucial part of that process.
Fourthly, we will give the regulator the power to block clubs from joining widely condemned closed-shop breakaway leagues, such as the European super league. Finally, we will give the regulator fall-back powers over financial redistribution. Supporting the pyramid is crucial and this Government have already committed £300 million of funding to support grassroots multisport facilities in England by 2025. When the financial health of the football pyramid is at risk, and football cannot sort out this issue, the regulator will have the power to intervene and protect the game. In short, we are protecting the long-term success of our national game, and restoring fans’ position at the heart of how football is run.
I want to reassure Members that this is not about changing the fundamentals of the game, or imposing unnecessary and burdensome restrictions on clubs. In fact, we would not naturally find ourselves in this space—having to regulate an industry that has enjoyed huge success without Government intervention over many years. However, despite the scale of the problems, and the huge harm that those problems can cause, the industry has failed to act, despite repeated calls for reform, so we have been forced to step in to protect our national game. This is about taking limited, proportionate action to maintain the premier league’s position as the strongest league in the world. It is also about safeguarding clubs across the country, from the biggest to those single- club towns where football sits at the very heart of the community.
This Government have proven time and again that we are on the side of fans. We committed to this review in our manifesto. We stepped in during covid to make sure that English football was one of the first leagues back across Europe. We got fans back into stadiums quicker than almost any other country, and we took action under competition law to support broadcasting revenues during one of the most difficult periods that sport has ever faced. That secured £100 million of funding for the game. We stepped in once again to block the European super league—a competition no fans wanted. When fans have needed us, we have been in their corner. Now we are putting them right back at the heart of football, and I commend this statement to the House.
Stuart Andrew
I am grateful for the support that the hon. Gentleman has indicated today. We all recognise that action needs to be taken, and I am grateful for that support from the Opposition. I accept that time has been taken, but it is important to put on record that these are not simple matters. They are complex, and it has been important for us to ensure that we get this right. I have not been sitting on my hands; I have dedicated considerable hours to this, building on the extensive work in the review led by my hon. Friend the Member for Chatham and Aylesford.
The hon. Gentleman is right to talk about the finance side of things, and of course the regulator will have the teeth it needs to ensure support for the whole of the game. On fan voice, although we have not gone down the golden share route, the voice of fans is front and centre in this White Paper. It will basically achieve exactly the same thing, and it will be a condition of a licence for clubs to compete in English football. I am extremely grateful for the offer of support on the Bill, and I look forward to working with the hon. Gentleman as we try to progress it through the House.
Mr Deputy Speaker (Sir Roger Gale)
I call the chair of the fan-led review of football governance.
Stuart Andrew
I am grateful to the hon. Gentleman for his work and for his extensive interest in this important area. He is right that we have to get this right, and that the implementation of the independent regulator will be critical. He is also right to talk about the distribution. We have secured powers for the regulator to use should there not be an agreement between the football authorities. We still urge them to get on with it. They can still come up with a deal, and I sincerely hope they do. As we progress towards legislation, we will be looking for the steer he mentions so that we can get on with the deal that everyone expects and for which they have waited far too long.
Damian Green (Ashford) (Con)
I congratulate the Minister on not only producing this long-awaited and welcome White Paper but on broadly agreeing with my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), which in my experience is usually the easiest and quickest way to reach a conclusion.
The House knows that the Premier League is one of this country’s most successful businesses, exports and brands. The key issue for fans is how much can be squeezed from this golden goose without damaging it, so that we can give proper, long-term and sustainable support to clubs lower down the professional pyramid and, indeed, to the vital grassroots of football. Whatever happens, and however quick the consultation, the regulator will not be in operation for another 18 months or two years. How long does the Minister propose to give the game to sort out the key issue of the distribution of money?
Stuart Andrew
I thank the acting Chair of the Select Committee. He is right to point out that the premier league is the most successful league in the world. We were careful not to do anything to damage it as we developed our thoughts in the White Paper. He is right to talk about the importance of grassroots sport. In every meeting, I have urged the EFL, the Premier League and others to come to a deal and to get the distribution of payments sorted out as quickly as possible. Only when we have the regulator in place will the powers be available for a deal to be struck, but I urge the people in those negotiations to get on with it, and to get on with it quickly.
Mr Deputy Speaker (Sir Roger Gale)
I pay Jamie Stone the courtesy of calling him correctly.
Stuart Andrew
I congratulate my hon. Friend and pay tribute to her for the enormous amount of work she is doing on behalf of her constituents and the fans at Southend. She has been relentless in pursuing me on this issue and I am sure the fans will be extremely grateful to her for that. She is absolutely right: the independent regulator will be monitoring the situation in each club at a much earlier stage so that there can be intervention, if necessary, before we get to the crisis point, to put those clubs on a stable footing so that they can be there not only for the people who enjoy them today, but for their children and grandchildren.
Fan-led Review and Football White Paper
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Stuart Andrew
I am looking forward to attending that match at the weekend, and I already have a list as long as my arm of people who want to join me. The hon. Lady is right; she is an advocate, and other advocates such as my hon. Friend the Member for Hyndburn (Sara Britcliffe) have talked about the club Accrington Stanley and all the work it does and how important the fans are. The hon. Lady is right to raise that issue, and I can assure her that throughout this process, I have tried my best to ensure that the voices of fans are heard in the White Paper that will be published this week.
Mr Deputy Speaker (Sir Roger Gale)
Order. Would Members wishing to leave please now do so, quickly and quietly.