My Lords, football brings joy to fans right across the country, as well as a shared sense of community. It is an essential part of the social fabric of our country. Growing up, I lived within earshot of the Manor Ground, Oxford United’s former home. My dad, who was a season ticket holder, took me and my siblings to games, including to Wembley when Oxford won the Milk Cup.
Loyalty to clubs runs through families and creates a sense of pride within communities across the generations. With apologies to noble Lords who support Bolton, I was delighted when my niece Talullah and nephew Winston got to experience the same euphoria I did as a teenager—and in May as well—when we went to see Oxford win the League One play-off final at Wembley earlier this year.
English football goes beyond family loyalty and local communities. It is a global success story and one of our greatest cultural exports. It is an industry we want to protect, for its economic value and for the fans who turn out to support every week, even when their team is down on its luck.
Despite its phenomenal success, we know that irresponsible owners, unsustainable financial models and inadequate regulation have cast a shadow over too many of our clubs. Too often, fans have had to fight to protect their club’s identity, heritage and even its very existence. In recent years, we have seen the devastating impact that losing these battles can have on communities, such as with Bury and Macclesfield Town.
Since 1992, there have been over 60 instances of professional clubs in the top four divisions going into administration, and two expert reports commissioned for DCMS have shown that the situation is not improving. In 2023 alone, clubs in the top five leagues faced pre-tax losses of over £1 billion, and net debt stood at over £4 billion. These are eye-watering figures.
Unfortunately, the football industry has not gone far enough in tackling these issues, despite many opportunities to do so. That is why we are bringing this Bill forward to establish an independent regulator, delivering on our commitment to make this country the best place in the world to be a football fan.
This is historic legislation which has been developed over several years, including by the previous Government, who recognised the need to regulate in this space. I give special thanks to Dame Tracey Crouch for chairing the independent Fan Led Review of Football Governance. It was her review that recommended an independent football regulator and laid the groundwork for the extensive policy development on this much-needed legislation.
Before I get to the details of the Bill, I thank all those who have engaged so constructively in its development, including many noble Lords from across your Lordships’ House here today. In particular, I thank the Football Supporters’ Association, the English Football League, the Premier League, the National League, the Football Association, UEFA, FIFA, the Professional Footballers’ Association and Kick It Out, as well as clubs across the football pyramid.
My Lords, I am grateful to the noble Baroness, Lady Twycross, for moving the Second Reading of this Bill and for the generous and comprehensive way she set out all the work that has gone into it to get us to this point. I am also grateful, as is my noble friend Lord Markham, for the time she gave earlier this week to discuss the Bill with us. As noble Lords may know, and as the Bill team was warned when we were working on the Bill before the election, I am not the world’s greatest football aficionado, but it is a mark of the power and allure of the beautiful game that none of us can be mistaken about the central part that it plays in our national life.
In 2010, I had the pleasure of standing for election to another place in my native city, Newcastle upon Tyne. I was an eager, first-time parliamentary candidate and had been campaigning for nearly 18 months when the election was finally called, so it was a chastening reminder of most people’s priorities to see the front page of the local papers on 6 April 2010. That was the day that Gordon Brown finally went to the Palace to seek a Dissolution. More importantly, on Tyneside, it was the morning after Newcastle United had won promotion back to the Premier League after their relegation in 2009. The Newcastle Evening Chronicle that day was a commemorative edition, offering 10 pages of photographs, analysis and reaction from the fans. Tucked away in the corner was a tiny news in brief: “Prime Minister calls election—full story, page 11”. So I have never been in doubt about where football stands in the nation’s priorities—understandably, since it is one of this country’s greatest inventions and exports.
As we begin our scrutiny of this Bill, it is worth casting our minds back to 26 October 1863. On that date, gathered in the Freemasons’ Tavern on Great Queen Street—the same tavern, incidentally, in which the Conservative Party conference was held for the first time four years later—Ebenezer Morley, along with the representatives of a dozen other London clubs, came together in a spirit of camaraderie and shared passion to form a body that would unify the rules and practices of the sport they loved. From that meeting came the Football Association—the first association of its kind, and one which has formed the model for governing bodies around the world.
My Lords, I draw noble Lords’ attention to my entry in the register of interests. I am chair of Sport Wales, I sit on UK Sport, I am a trustee of the Foundation of Light and I authored the independent Duty of Care in Sport review in 2017, which was requested by the then Sport Minister, Dame Tracey Crouch. I thank the many organisations that have been open and generous with their time in preparing for today’s debate.
Dame Tracey’s fan-led review demonstrated that self-regulation in football has failed, and the creation of an independent football regulator could strengthen the game that so many cherish. As we all know, football is deeply woven into our country’s cultural fabric. At its best, it provides incredible social value, health benefits and entertainment to many communities across the UK, as well as an important revenue stream into the UK economy. Therefore, the sustainability of football for years to come is important.
While an EDI strategy is included in the Bill, there is an obvious exclusion: the women’s game. I understand that many noble friends might suggest that adding the women’s game to the Bill would create another complex layer, but I think we should be open about what we are talking about today. It is a men’s football regulator, not one for the game of football.
I have been told that the women’s game needs a chance to self-regulate and that an independent football regulator might stifle investment opportunities that could become available to women’s football in the future, but I disagree. The fan-led review concluded that:
“Fair distributions are vital to the long term health of football. The Premier League should guarantee its support to the pyramid and make additional, proportionate contributions to further support football”.
If the aim of the Bill is to ensure financial sustainability for the future of football, should that not be for the whole game?
My Lords, I congratulate the Department for Culture, Media and Sport and the Minister for securing this debate, and thank the previous Government for their efforts to ensure that the sport of football—a national treasure beloved of so many—is more effectively regulated.
I realise that I cannot claim that football was made in Sheffield but, in addition to the codification referred to by the noble Lord, Lord Parkinson, in London in 1863, a second codification of the beautiful game took place in Sheffield in 1867—another early governance document for the sport that was influential for decades across the north. The city is home to the oldest football club in the world, Hallam FC, as well as to the two much better-known professional football clubs, Sheffield United and Sheffield Wednesday.
As Bishop of Sheffield, it gives me great pleasure to contribute to this important debate. It is a particular privilege to follow the noble Baroness, Lady Grey-Thompson. I want to say, first, something about the relationship between football clubs and their communities; secondly, something about financial stability; and thirdly, something about the responsibility of football clubs in relation to the climate emergency.
On football clubs and their communities, we are right to celebrate the off-field successes of English football, including club community programmes and the work of the Football Foundation to support grass-roots pitches and facilities. In addition to the tens of thousands of jobs and billions of pounds of investment that the football pyramid channels into the UK economy, its social impact is profound. A recent report compiled by Substance using data from 2019-22 revealed that English football generated over £101 million for community investment, bolstering physical health, mental well-being, education and employment.
My Lords, I very much welcome the Bill and I congratulate my noble friend the Minister and, indeed, the Secretary of State on producing a stronger Bill than the one we were faced with earlier this year. I also have to acknowledge the work that Tracey Crouch did; I think we are all grateful to her for her review.
As a former business manager, I should also congratulate Ministers on finding time in the legislative programme for the Bill. I understand that some people might ask why we should prioritise football legislation when there are so many other problems the country is facing and so many other difficulties this Government have inherited. The simple fact is that, as we have heard, football has a profound impact on society as a whole and, if you care about communities, preventive health, mental health, loneliness and enriching children’s lives, you should care about football. Very often it is our football clubs which provide food banks, holiday clubs, schemes for young people and, importantly, a real sense of belonging to local communities. That is a factor up and down the country. Regardless of the clubs we support, football is a central part of our national life. Anybody who saw the remembrance services at football clubs up and down the country, with the remarkable silences, will understand just how much football clubs are important backbones of our communities.
Football clubs need to be recognised as having a wider role than just being a sporting venue. Indeed, they are an asset of community value. I wish that our football grounds were all classified as assets of community value. That is one safeguard that all clubs should have for the benefit of their fans.
Too often, as we have heard, clubs are treated by new owners as trophies or playthings, or as a set of assets which can be targeted for asset stripping. Very often this is done by people who simply do not care about the game or what the clubs mean to the many thousands of people who should be considered the owners of the club—certainly of the traditions of the club—namely, the fans.
My Lords, I declare an interest as a long-standing Norwich City season ticket holder and a supporter of King’s Lynn Town FC.
England is the home of football and English football is enjoyed by millions of people, as we have heard, who watch their team every week. The Premier League is the most-watched league in the world. It drives economic growth, generating £8.2 billion of GVA in the 2021-22 season, and supports 90,000 jobs across the country. The EFL is thriving; last year, one in four paid admissions to a UK sporting event were to an EFL match. Football is a much-loved, global British success story, and it is in this context that we should consider the Bill and its proposals to create a new regulatory structure.
This Bill is unquestionably novel. The Explanatory Notes themselves acknowledge that football
“was previously not regulated by statutory provisions”,
and explicitly state that
“the new regime and the distributions provisions in particular are unique and unprecedented”.
To avoid unintended consequences which could undermine the success story that football is, we need to be very careful in our deliberations to ensure that what is being regulated for and legislated for, as the Minister has said, creates a truly proportionate regime.
That means a light-touch regulator and clear boundaries to its powers to prevent regulatory creep and overreach. Indeed, we should assess the measures in the Bill against the words of the Prime Minister, who said at the recent investment summit that
“the key test for me on regulation is … growth. Is this going to make our economy more dynamic? Is this going to inhibit or unlock investment? … where it is needlessly holding back the investment we need … we will get rid of it … we will make sure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as this room does”.
My Lords, it is an honour and a privilege to speak in the debate on the Football Governance Bill, which is fundamentally a good Bill and one that the Government should be proud of. We should give thanks in that pride to the previous Government for doing much of the hard work in preparing it. I also personally thank the Minister for her careful introduction to the Bill and the Premier League, the EFL, Fair Game, Women in Football, the LSE, Civitas, the LCP, the FSA and the PFA for their informative briefings. I apologise to anybody I have missed out.
Many of us have waited a long time for this Bill and then, of course, we get two Bills in a year. Both major parties have edged towards increasing the level of regulation of our beautiful game. Some say that we do not require it, others that existing regulation does not go far enough. But, for those of us who have been watching football for a long time, the current system is failing both clubs and fans and is no longer financially sustainable.
The desire for a degree of regulation to make the game more sustainable has a long history. Back in the 1990s, Labour had a mini-manifesto for the game. Once elected, our efforts were of necessity focused on countering disorder and hooliganism. Tackling racism and violence were a priority for me in my role as the football hooligan Minister back in the late 1990s, and our actions were key to ensuring that we were able, as a nation, to continue participating in international tournaments.
In 2019, both the Tory Party and Labour made a commitment to football regulation in their manifestos. As we know, to their credit, the new Tory Government invited Tracey Crouch to lead the fan-led review, and this in turn led to a White Paper and, earlier this year, the first iteration of the governance Bill. Now it falls to Labour, as ever, to complete the job. The post-election gap has enabled the improvement of the Bill in several respects, including the regulation of the financial distribution payments system across the football pyramid and the issue of parachute payments. Changes relating to fan engagement and the equalities, diversity and inclusion provisions are also welcome, as is the shortening of the time for the production of the first “state of the game” report, which will help put football on a more sustainable financial footing.
My Lords, I thank many noble Lords for their good wishes and for allowing me to speak sitting down. It is a bit of paradox to be talking about a football Bill when you cannot stand up: none the less, I will do my best. I declare my interests as the first independent chairman of the Football Association, and I have had a long and warm relationship with football supporters’ organisations.
I am wearing “the blazer” largely to illustrate what is meant—rather disparagingly, I suspect—by the press about the members of the Football Association Council. We are often described, pretty accurately, as “the Blazers”, meaning old and decrepit—and wearing a blazer—and sometimes, more kindly, as the “parliament of football”.
When I first attended the Football Association Council, there were 127 people—men and women—all but two of whom were in blazers. Two were women, and neither was ever allowed to the chair the women’s football committee. That may very well reflect the point made about how women vanish when we come to look at the issues here. There were two people of colour—they were called “black faces” by the then chair of the Premier League, the amazing Herman Ouseley, whom I miss greatly—and one gentleman from Japan. One coach, the redoubtable Howard Wilkinson, refused to wear a blazer, as you would expect, and Lord Mawhinney would never knowingly wear anything that approximated to a uniform. In the “parliament of football”, there was not one footballer. Aside from very vigorous discussion on the poor quality of the tailoring of the blazers and, on occasion, on who should be on which committee or attend which dinners, some serious discussions took place about the existence of on-the-field and off-the-field regulation, prejudice and the events that compelled clubs occasionally to play with no fans present and behind locked doors—all important issues.
On one occasion, and at my instigation, there was discussion about whether people who were born men should play post-puberty against people who were born women. In my day, the issue was straightforward. It was clear that it tended to produce an unfair competition and a very significant number of serious injuries. It led us to banning those kinds of competitions because of those reasons—no other reasons. I say with regret: shame on the Lancashire County Football Association, backed up by the FA itself, because an autistic 17 year-old girl has been banned for 12 matches for asking whether a large, really quite aggressive, bearded trans woman was authorised to play in the competition in which she was playing. She was immediately accused of transphobia and the Lancashire FA seemed to take no account of her neurodiversity. She seems to me to have been treated in a shabby way, and I do not intend to let it rest.
5:49 pm
20 of 88 shown
I turn to what the legislation does. The regulator will improve the resilience of club finances, tackle rogue owners and directors, and strengthen fan engagement. It will also set out a corporate governance code of practice and prevent clubs joining breakaway leagues.
Too many clubs are living beyond their means. Therefore, the regulator’s primary purpose will be to protect and promote the sustainability of English football. It will achieve this through a licensing system where all regulated clubs in scope will need a licence to operate as professional football clubs. That scope will be set out in regulations and is currently envisaged as the top five divisions of English men’s football.
The regulator will not be a fix for all football’s woes, nor should it be. It will have a very tightly defined scope and purpose to tackle the specific risks of significant detrimental impact on fans and communities. Legally, the regulator will not be able to act outside of this scope.
The football industry has shown itself incapable of addressing these failures. We have seen in other industries that, when done well, proportionate regulation still allows for innovation and ambition—financial services being a good example. Where clubs are already well run, regulation will be light touch to ensure sustainability without standing in the way of clubs’ ambitions. Indeed, compared to some comparator countries, this is not interventionist regulation.
To better understand the landscape of English football, the regulator will periodically undertake a “state of the game” report. This is expected to include a broad assessment of the financial health and economic issues of the industry.
Under its regime, the regulator will introduce new regulation to improve financial resilience in the game. Clubs will be required to demonstrate sound basic financial practices, have appropriate financial resources, and protect the core assets and value of the club, such as the stadium. This will reduce the risk of clubs facing financial failure and the huge knock-on impact and distress that that carries for entire communities.
This Government are committed to putting fans back at the heart of the game. As such, the Bill goes slightly further than the Bill debated in the Commons earlier this year. It will put in place a stronger minimum standard of fan engagement in decision-making on a number of key issues at all regulated clubs. The Bill also introduces important new statutory protections for key aspects of a club’s heritage, such as its name, home shirt colours and badge, because although most clubs have a strong relationship with their fans and actively engage them in decisions that affect club heritage, not all do. Fans at Cardiff City and Hull City will know this well, where they have had to battle to keep their club’s name or shirt colours.
Clubs will need to seek the regulator’s approval to sell, or relocate from, their home ground. Relocation from a club’s home ground will not be approved unless it both makes financial sense and does not compromise the heritage of the club. This will help to prevent a repeat of what we saw when Wimbledon moved from their home in south London to Milton Keynes.
Fans have also suffered the consequences of irresponsible ownership. We have seen some owners acquiring clubs without having adequate finances, or who were involved in criminality, or who had histories of financial mismanagement. The regulator will put in place stronger, statutory owners’ and directors’ tests to protect fans from the impact of irresponsible owners and decision-makers by ensuring a club’s custodians are suitable. All prospective owners and directors must pass the regulator’s tests before taking a position at, or acquiring, a club. If someone already in the system is found unsuitable, the regulator will have powers to remove them.
We have removed a clause from the previous Bill that allowed government foreign policy and trade considerations to be considered when approving takeovers. This change makes it absolutely clear that the new regulator will be independent from government.
One of the main triggers for the fan-led review was the attempted breakaway European Super League, which prompted a fierce backlash from fans. Clubs will be prevented from playing in competitions prohibited by the regulator. This will mean that fans no longer face the prospect of seeing clubs trying to join unfair, closed-shop leagues that undermine the fundamental principles of English football.
I turn now to distribution of revenue in the game. Since 2019, the leagues have failed to negotiate a new distribution deal—another stark example of the industry being unable to resolve key issues. So, while a football-led solution remains this Government’s preferred outcome, the regulator will have statutory backstop powers to intervene if necessary. The backstop mechanism is designed to incentivise an industry-led solution. However, in the absence of one, it will be robust enough to ensure an agreement is put in place to fairly distribute revenue.
Only one of the relevant football leagues can apply to trigger the backstop mechanism, if they feel that they cannot reach an agreement themselves. This does not mean, however, that the process will automatically be triggered. The regulator can decide to trigger the process based on such an application if relevant conditions are met. The regulator will then enforce a mediation period to try to encourage the leagues to come to an agreement themselves.
However, if an agreement cannot be reached, the final offer arbitration process will be triggered. This process requires both leagues to submit final proposals for a distribution agreement, and the regulator will choose the one most consistent with its objectives to promote the financial soundness and resilience of football. It can reject both proposals if they are unsuitable. This decision will be enforced via a distribution order. At every stage, this process is intended to encourage an industry-led solution, while ensuring an agreement on distributions will be reached. The Bill will also establish a corporate governance code, requiring clubs to report how they are applying the football club-specific corporate governance code published by the regulator.
As noble Lords will be aware, Labour supported the introduction of the previous version of this Bill, which was debated in the other place prior to the election. The new Bill is largely in line with the previous Bill. However, we have made key changes to ensure we deliver the best possible proportionate regulation that safeguards the future of our national game.
These changes will empower fans, keep clubs at the heart of their communities and ensure the financial sustainability that will protect clubs for future generations. As a result of the changes we have made, clubs will be explicitly required to consult with supporters on ticket prices. This, among other measures, will give fans a louder voice at their clubs on the issues that matter to them. Clubs will also be required to consult their fans prior to the regulator making a decision on relocation of a home ground.
Parachute payments will no longer be excluded from consideration as part of the backstop process. They are a significant part of football’s financial landscape, and if the regulator identifies them as a relevant factor, it will be able to consider them as part of the backstop.
Finally, the fan-led review identified that the game needs to do more to ensure it is open and welcoming to people of all backgrounds. There is therefore a clear commitment from this government to do more to improve equality, diversity and inclusion within football club governance. Clubs will be required to publish what action they are taking on equality, diversity and inclusion as part of reporting against a new football club corporate governance code, which the regulator will introduce to improve decision-making at clubs. The measures in this Bill have been carefully developed to ensure we are taking a proportionate and flexible approach to regulation that reflects the unique and special place football has in our society.
The regulator will be focused on financial sustainability as well as safeguarding the heritage of English football. But, crucially, it will also have duties to have regard to minimising its impact on important outcomes such as the competitiveness of our clubs against overseas competitors and investment into the game. This will provide a stable regulatory environment, providing the certainty required to drive future investment and growth, so that English football continues to be a global success.
If clubs have the finances to back up their plans, have suitable owners and directors, engage their fans on key issues and do not join closed-shop breakaway leagues, they should feel very little impact from the regulator. Given the ongoing issues at some clubs, we are determined to ensure the regulator is in place as quickly as possible once this legislation passes. This is why we are already putting in place a shadow regulator to do the preparatory work and lay the foundations of the regulatory regime.
The case for better regulation of our clubs is clear. This Bill will provide the much-needed reform to protect our footballing heritage. I am grateful to noble Lords for their involvement in and support for the Bill. I look forward to working across the House in the weeks ahead. I beg to move.
The year 1888 saw another key moment in the football canon. It brought the creation of the English Football League—again, a world first—followed a year later by the establishment of the Northern League. It was with this development that the professionalisation of football really took hold. Without that Victorian spirit of imagination and enterprise, the game of football as we know it today would not exist.
Since its inception, football has been a great unifier—indeed, even a peacemaker. It was a football match that famously brokered a momentary truce on the Western Front on Christmas Day 1914. Since the inaugural FIFA World Cup in 1930, football has brought nations together around one central purpose—the love of a game—in friendly competition. Over the years, football tournaments have flourished across the globe. It has become by far the most popular and loved sport in the world. All that would not have been possible had it not been for that evening in October 1863 here in England.
Why dwell so heavily on the history of this beloved sport? It is because history is at the heart of this Bill. Football is woven into the fabric of our nation. It is central to the identity of millions of Britons. It is the thread that binds communities together—communities such as my home town, where Whitley Bay FC are a source of great local pride, not least as the record-holding, four-time winners of the FA Vase. Football generates memories, creates its own traditions and is infused with the spirit of every player, every fan and every club.
Across the country, thousands assemble weekly in all weathers to cheer on their favoured team: the club supported by their parents, their grandparents and their great-grandparents before them. A football club is more than just a patch of soil; it is hallowed turf, nourished with the blood, sweat and tears of generations. The badge worn on the heart of every player is not merely a picture but a symbol—of hope, of heritage, of devotion. That is what English football is all about and that is why it is so important for us to get this Bill right.
A football regulator will work only if it is able to protect the beating heart of the game and if it strikes a balance between protecting the past and the future of clubs and competitions. There is much in the Bill that does indeed strike that balance, and I am proud that it was the previous Government who commissioned the review that led to its creation. I repeat the thanks the Minister gave to Dame Tracey Crouch and to the tens of thousands of fans who took part in that review and helped to shape it. The work has always enjoyed cross- party support, as the Minister noted, and I welcome the fact that the new Government have sought to continue it so swiftly.
As I have discussed, the Bill attempts to tackle the issue of heritage. The regulator will have an explicit duty to protect the unique history of each and every club and to ensure that the links between clubs and their communities are immutable bonds that can never be broken. But we must not ignore the fact that the Bill before us today, as the Minister candidly set out, is not the same as the Bill that was under discussion in the previous Parliament. Key safeguards that were intended to preserve elements of the independence and sustainability of the leagues have been changed. There are four areas of this new Bill that we on these Benches will be examining particularly keenly during its passage through your Lordships’ House.
First, in considering the principle of a regulator, we support the establishment of the independent football regulator. We are pleased that it will have a role in preserving the history and heritage of clubs and that it will protect against the threat of rogue owners, some of whom in the past have asset-stripped clubs for their own gain. But we remain concerned about the potential for regulatory overreach. We must be vigilant against mission creep, as is all too often the case with regulatory bodies. A key word in the Minister’s speech was “proportionate”. If this new regulator becomes too deeply involved with the minutiae of clubs’ finances, we risk damaging one of our most significant cultural institutions and greatest exports. If the regulator becomes too prescriptive in its requirements, how will clubs retain their competitiveness against their global rivals? Any outcome that sees a reduction in investment and creates a possibility for English football to lose its premier status must be seen as a failure. It is our job to ensure that this does not happen.
Secondly, the Bill brought before the last Parliament explicitly excluded parachute payments from the scope of the regulator. This Bill, as the noble Baroness outlined, has removed that exclusion. The Government have reasons for this, as she has explained, but we remain unconvinced. We know that payments to relegated clubs are vital for the financial sustainability of those clubs. When a club is forced into the Championship from the Premier League, its overheads do not decrease yet its income does. Football clubs are not like just any other business; they cannot simply cut costs. Without parachute payments, clubs facing relegation would be forced to the financial precipice. Surely any risk of a club being forced to enter administration because of action taken by the regulator would be the polar opposite of the aim of this Bill. That too is an outcome we must resist.
Thirdly, I turn to the backstop mechanism—a term that, I admit, still brings me out in hives after years of discussing Brexit deals. The backstop in this instance was first envisaged as a last resort, to be called on only should neither party agree on the distribution of revenue. But there are absolutely no guarantees that this will be the case. If one party wants to trigger this mechanism, it may do so whenever it wishes. The binary choice presented by the backstop, and the inclusion of parachute payments in that mechanism, could lead to a scenario where the regulator forces one business to give its money to another. Setting aside the financial risks in that, the potential for protracted legal action could have very injurious implications. If league organisers and clubs cannot be certain that they will receive the income they expect and if they cannot anticipate how often they may be bogged down by lengthy and costly battles in the courts, how will they be able to produce the business plans required by the regulator for licensing purposes? Of course, the financial sustainability of the whole football pyramid is of the utmost importance, but there must be at least some recognition in the mechanism of the unique role that the Premier League plays as the ultimate funder in the financial vitality of the English league system.
Finally, one of the laudable aspects of this Bill is the attempt to improve fan engagement. Given that the Bill was born of the fan-led review, it is only right that those who give their support to the sport should be engaged by the clubs they love so dearly. But there are important issues to examine here. How do we define who a fan is? Who decides? Will clubs be allowed to choose with which groups or people they engage? Will the regulator? What impact will this have on supporters’ engagement and on clubs? We must also grapple with the fact that fan engagement can go only so far. Once we have decided what constitutes a supporter, what role will they have? Perhaps the noble Baroness can elaborate on this, either today or as we go into Committee. Will fans come to welcome this regulator? Just as the referee on a pitch adjudicates between players and thus frequently draws the ire of both teams, will this regulator attract the same criticism from supporters?
Since that October evening in 1863 that established the foundations that have allowed football to flourish in this country, football clubs have become the nuclei of communities across the country, institutions steeped in meaning and heritage that have inspired generations. Football has become one of the central elements of our national identity but, like so much of our national heritage, it is a precious and delicate inheritance. If we do not treat it reverently, we risk destroying what makes it great. As we seek to regulate football, we must keep our eye on what makes it so special and act in the spirit of those who met in that tavern in Holborn 161 years ago. The motto of Whitley Bay FC is “Ludus est omnis”—“The game is everything”. Those wise words are worth keeping in mind as we scrutinise this important Bill.
The women’s game is still connected to men’s football in many cases. Sadly, there are very few examples of independent women’s football clubs like the London City Lionesses, although we are slowly seeing more investment in women’s football. Many will say that no regulator is required, but I believe the exclusion of the women’s game from the Bill could hinder its growth so that it continues to be an afterthought when it should be at the forefront of football’s innovation.
Would it not be beneficial for the women’s game to avoid the fate that we have seen in the men’s game and to take proactive steps to ensure that the women’s game is protected from the same misconduct? Oversight and focus could ensure that the women’s game raises governance code standards in performance, medical and welfare provisions to drive positive change for the whole game so that football players could receive the duty of care that they deserve.
I intend to table amendments that would cover corporate responsibility and would require a club to consider the impact of the club’s operations and activities on society and the environment, in particular taking reasonable steps to increase diversity and inclusion of underrepresented groups; to eliminate discrimination; to have a positive impact on the community; and to establish, and keep updated, a target consistent with corporate governance best practice in respect of the gender diversity of officers.
In a survey by Women in Football in 2024, only 21% of women who responded said they felt supported to forge a path to the top, while 89% of women who responded had experienced gender discrimination in the football workforce. Systematic change is needed to accelerate progress, taking pockets of good practice and scaling the impact of gender diversity leadership across the professional game.
Any new regulator needs to have the voices of the players included. I urge His Majesty’s Government to ensure that appropriate consideration is given to the Professional Footballers’ Association as well as to the experience and knowledge of women in football. My work on the duty of care in sport has been across many sports, both amateur and professional, and the voice of participants enhances the outcomes that we would all like to see, so it is important that any fan consultation does not just become a tick-box exercise.
With my Welsh hat on, I understand that representatives from the Welsh Government have met colleagues from DCMS on the Bill. It was agreed that the Bill impacts Wales only in relation to those clubs that play in the English football pyramid, not Welsh football in its wider sense, so I wonder whether the Minister can say whether there is a need to include or add the regulator to the Senedd Cymru (Disqualification) Order 2020. As I understand it, it is an order of the Privy Council, but clarification on that matter would be helpful.
Football clubs have a clear and undeniable duty to their fans and their localities. In any conversation about the future of football, I hope these two groups will take centre field. Fan investment is the lifeblood of the sport and I applaud the Government’s intention to place fans back at the heart of the game. To name just one example, I was pleased to see that the Bill will ensure that fans are consulted on changes to ticket prices. I hope the Bill might also require football clubs to take their civic responsibilities extremely seriously. These go above and beyond those of charity foundations and extend to local regeneration schemes.
As a mildly obsessed fan of Newcastle United, I have rejoiced to see how the 2021 takeover of the club, following the deeply unpopular ownership tenure of Mike Ashley, has led to a wonderful reconnection of the football club with the fan base and with the city. Having said that, I acknowledge that the 2021 takeover raised significant concerns about the application of the owners’ and directors’ test, and I hope very much that the new Bill will tighten up that process.
Secondly, on financial stability, while acknowledging that the majority of football clubs are stable, the Bill rightly recognises the need to protect fans, players and club staff from costly club closures and the irresponsible mismanagement of club finances. My right reverend friend the Bishop of Derby, the Church of England’s lead bishop for sport, wishes she could be here to discuss the Bill. I know how much she cares about the high-profile collapse of Derby County Football Club in 2022. Ultimately, the club was, thankfully, rescued by local businessman and lifelong supporter David Clowes, but the turbulent negotiations with investors abroad exposed serious concerns and vulnerabilities. I hope the Bill will help to prevent such collapses in future.
Finally, and briefly, on the climate emergency, I particularly welcome the enhanced provisions in the Bill to improve transparency and accountability by requiring football clubs to publish what actions they are taking to improve equality, diversity and inclusion. May I suggest that this responsibility is extended to include actions that clubs take to reduce their carbon footprint and to move towards net zero? I look forward very much to hearing the views of other noble Lords and to following the progress of the Bill in the coming months.
We have seen over the last few years that football simply cannot regulate itself. Too many clubs have been on the brink of collapse. We have seen clubs tipped over the edge, breaking the hearts of fans and sometimes ruining the well-being of some of the local businesses that they have served. I must declare an interest, as one of the clubs that came close to oblivion was my own Bolton Wanderers, one of the founders of the Football League. My colleague the noble Baroness, Lady Morris of Bolton, and I have shared our grief about what was happening five years ago when Bolton Wanderers was very close to collapse.
That was the consequence of going from a benevolent owner, who had been very generous and whose motivation was the best interests of the club, to a new owner whose motivation was, to say the least, questionable. It was noticeable that, when the club was going into administration, the administrator criticised the new owner, who had used his position to hamper and frustrate any deal that did not suit his purpose. It was not about what the club’s future should be; it was what he thought he could benefit from. Thankfully, since then the club has been rebuilt. Even when we lose, as we did 5-0 to Stockport recently, at least we still have a club to cherish.
Football fans expect to be tortured by what happens on the pitch. We should not have to expect it from what happens off the pitch as well, and too often that has been the case. Organisations such as Fair Game and the Football Supporters Association have fought to protect clubs for the fans. Individuals, such as Ian Bridge at Bolton, have been crucial in co-ordinating the efforts of fans. But we need more; we need a framework and structure for football which safeguards its future at all levels.
We have a football pyramid with the fantastic Premier League at the top, but it is a pyramid and the Premier League is not the be-all-and-end-all of football in England. We need regulation to make the football structure fit for purpose. Football in the UK is a big industry, and I understand that the Premier League has expressed concerns about killing the golden goose. No one is seeking to do that. We should remember that many Premier League players have come up from lower-league clubs or have been out on loan at lower-league clubs to help them develop. The EFL clubs are important to the Premier League, as well as to their own fans.
The financial imbalance in English football is dangerous to the future of football clubs at many levels. Current arrangements—I mention in particular parachute payments —are distorting the principle of sporting competition. That is just one reason why this Bill is so important. I know that, for many years, many people in football, including the EFL, had hoped that regulation would not be needed, but it is now obvious to almost everyone that this has to be the way forward.
The Bill, as the Minister outlined, establishes for the first time an independent football regulator. It will be a very important responsibility, and I am glad that the Bill is detailed on some aspects of how this will work in practice. There is much here to be welcomed, but that does not mean we will not press the Minister for more detail in Committee, especially on issues such as the parameters for financial distribution. There will be other areas where we will seek further clarification or assurances, such as vested interests, the women’s game, as has been mentioned, lower-league clubs, and ensuring that the individual ownership fitness test is exactly what we need. There is the issue of player welfare, with the PFA recently highlighting some of its concerns, which are probably worthy of consideration. Such points are not to undermine the Bill but to make sure that it is as effective and successful as it should be.
I hope the Minister will consider one amendment that I hope to push—namely, making sure that the regulator is accountable to Parliament, because I think all regulators should be. This will be very helpful to ensure the success of the new process.
Those seem very sensible benchmarks to me when considering a new statutory regime. We should make sure it fits within those parameters.
The key objectives of the Bill—particularly enhancing financial sustainability, preventing breakaway competitions, safeguarding club heritage assets and strengthening fan engagement—are all laudable aims for the regulator and will undoubtedly be an important focus of its work; I am sure that it can take things forward in that regard. However, the competitive and unpredictable nature of football must not be undermined by the new regulatory regime. We all know that football is about promotion, play-offs and passion. All fans dream of the possibility of their team triumphing against the odds, and sometimes they even get to see it happen. So football is clearly not akin to the typical regulated sector. As a result, the regulator in its actions needs to be mindful that football is a dynamic, risk-taking industry, with competition at its heart. That is a significant departure from the approach of other regulators, but it is imperative to protect this if the football regulator is not to unwittingly undermine the very sector it is there to support and help thrive.
The task of the new regulator will be considerable—for instance, to license clubs, it will have to review detailed business plans of all 116 and reach agreement on them. In addition to mandatory licence conditions, the regulator will have the power to impose discretionary requirements bespoke to a club. Clubs already deal with a lot on regulation, with the FA, the league and other bodies, so the new regulator needs to be careful that it does not overburden or duplicate requirements, adding unsustainable costs and bureaucracy, particularly for smaller clubs in the lower leagues.
All this will come at a cost, with money spent today by clubs on the game in future being spent on funding the regulator. Can the Minister provide reassurance that, in designing the levy, the regulator will be required to adopt a proportionate approach and ensure that costs to clubs, particularly those at the lower levels, are kept to a minimum? Can the Minister also give an indication of the expected costs or levels of staffing that will be needed for the regulator once it is fully up and running, to give us a sense of the scale of the task ahead?
How revenues are distributed through the financial pyramid is essential to the health of the game. The Bill introduces backstop powers to intervene in the currently voluntary distribution of the Premier League clubs’ TV revenues. These are unprecedented and untested powers, with the potential, if not carefully developed, to cause regulatory and investment uncertainty. It is critical that we consider the possibility of unintended consequences that may flow from this Bill and that we are confident there are strong checks and balances in the legislation to ensure that it sets out an approach that supports the continued success of football.
I am sure that we all find it disappointing that, since the introduction of a version of this Bill in the last Parliament, the latest round of financial negotiations between the Premier League and EFL have broken down again—and, to be honest, from talking to them it seems that both sides are anticipating that the backstop mechanism will be triggered. The use of these powers by the regulator may, rather than being a last resort as was hoped, be used quite quickly, once the regulator is set up. So when the process is introduced, it must not do more harm than good.
In that regard, I confess that I have some concerns about the process as set out in the Bill, particularly the binding final offer arbitration model. Rather than consider each proposal and determine the best overall approach, which may be a compromise between the two, the regulator instead must choose one of the proposals in front of it. To me, that does not make sense. In any negotiation, if both sides feel somewhat disappointed at the deal reached, it is likely to be fairer and achieve a balance between the two sides’ competing proposals. Yet in the current scenario, it seems that one side will take all. I am sure that we will explore this more in Committee, but can the Minister explain in more detail why the Government think that this is the best approach to include in the Bill?
Perhaps the most significant change to this Bill from its predecessor is the inclusion of parachute payments in any consideration that the regulator may make in relation to financial distribution through the football pyramid. I am afraid that I take a different view from the noble Baroness who spoke before me. I am somewhat concerned that this change may inadvertently incentivise bottom-half Premier League clubs in particular—and, going forward, newly promoted clubs—to cut squad investment, given the greater financial risk that relegation would present. That would be hugely damaging to the competitiveness of the league and a massive blow to fans of the clubs involved.
Rather than improving the level of competition, uncertainty around parachute payments could do the opposite and weaken the competitiveness of the Premier League—the very attribute that attracts the revenues that sustain the game. I know that that is not the intention and I look forward to more detailed discussion around these issues as the Bill goes through Committee.
To conclude, the reforms in the Bill mark a step change in the regulation of our national game. To ensure that they do not do unintended damage to the game millions of us love, it is essential that the board and those employed by the new regulator are mindful from the outset of the unique nature of football and the dangers that any ineffective regulation, or overregulation, may pose.
While we produce some of the world’s best clubs and fantastic football, the Premier League is becoming a closed shop, dominated by the money generated by TV rights. The top of the league is the preserve of a few clubs, primarily the richest. The rest of the Premier League is made up of clubs trying to get into two of the three European competitions or struggling to retain their place in the Premier League. In 2022-23, 25 clubs, 20 Premier League clubs and five EFL clubs, received 92% of the distributable revenues of the English game, £3 billion, while the other 67 clubs shared just 8%, £245 million. The football regulator’s task will be to ensure that there is a more equitable distribution of football revenues across the pyramid.
Football must remain a sport about risk, reward and fair competition. The current relegation payments scheme prevents this. In the last seven seasons, two of the three promoted teams from the Championship have been those relegated the season before, bolstered as they were by their financial protection following relegation. Back in 2010-11, parachute payments were just £30 million. By 2020-21, they had grown to £233 million, an eightfold increase at a time when wages had merely doubled. In the Championship, the non-parachute payment clubs are forced to overspend on players to compete effectively for promotion, creating a risk of bankruptcy, relegation and often a long, painful recovery period. We need the regulator to come up with a system that softens the financial blow of relegation, but in a way that does not distort competition. Change will need to be gradual and carefully managed, so that club viability and competitiveness are preserved, and the strength of the leagues protected.
I welcome greater fan engagement and the protection of the heritage and culture of clubs. The devil will be in the detail on how best to achieve this. The prevention of breakaway competitions will, of course, benefit players and clubs at a time when I think we are reaching the limit of what extra competitions can bring to the game.
Finally, where would I like to see improvements and changes? The first “state of the game”report will set the tone for the future development of the regulator. The last Bill gave the regulator three years to complete this work. That was too long, so I am pleased that it has been reduced to 18 months, but see no reason at all why it should not be six months or perhaps, at most, a year. Shadow staff, already in place, will have access to data and football market intel sufficient to hit the ground running. There are urgent issues to be resolved and, if they want to demonstrate change by the time of the next election, the Government would be wise to listen to those supporting faster progress. A shorter period for the initial report would justify a longer gap before the second.
In relation to the regulator’s scope, I am strongly sympathetic to bringing the clubs in the top two women’s leagues into the regulatory framework. The rapid growth in women’s football brings with it the same issues and risks, and with this Bill we have an opportunity to address these before they become a problem. It might also help tackle discriminatory behaviour and the macho culture that can impact on the game. It does seem odd, having strengthened the EDI commitment, to then exclude the women’s game from the regulatory framework. Access to even a small element of the solidarity payments produced currently would be transformational for the game.
Similarly, we should look to include the regulation of all clubs in National League North and National League South. It seems odd to regulate one-third of the National League clubs and leave the sixth tier unregulated. Some of these clubs are significant community assets and businesses with turnover figures of £4 million, £5 million and £6 million a year. More fans are turning to watch grass-roots football, and here again is an opportunity to ensure consistency in our approach at all levels.
I have a small but significant point for the Minister. Can we ensure that, among the statutory consultees, we include the players’ union, the PFA? Try having a football match without its staff.
The Minister will no doubt have read the press coverage of the Fair Game report pressing for changes and the strengthening of the Bill. I am sympathetic to many of these, some of which I have referred to. I hope she will continue her already-begun engagement with Peers so that we can improve the Bill as it goes through its Lords stages.
The Government are to be congratulated on the progress so far. This Bill is a bit like a Brighton and Hove Albion substitution at half-time: a potential game-changer. It works. When I reflect on how close my club was to going out of business for the want of effective regulation in the mid-90s, I do not want to see other clubs and their fans put through that experience. It is my belief that this legislation, with its owners and directors test, a licensing and financial control regime, and a commitment to a system of fairer competition and financial fair play, will go a long way to putting an end to the era of irresponsible club ownership.
The FA cannot be accused of reluctance in many ways. It works within the global football market, and it works to achieve a mandate for regulating pretty much everything that happens in on-field situations, but it does not regulate anything else—and it will not. When I and my successors, David Bernstein and Greg Dyke, wanted to persuade the trade association—that is what the Premier League is—that it was too parti pris and that its CEO was too close to those who were to be regulated for that to have a real effect, it was with little surprise that he would say to me, “Just look at the FA. Do you really want it to do the regulation? You must be joking”. When I looked around, I thought that that was not an unfair point in many respects.
The EFL and the EPL did not do the job either. In fact, the trade association has been allowed to fall apart. It is suing a number of its member clubs, which are in turn suing each other and the trade association. I suspect that it is great news for the noble Lord, Lord Pannick, but all of them are energetically bashing each other with multi-million-pound cudgels—less solidarity, more Vinnie Jones. The reasons for that are clear. In many cases, the clubs do not feel that they need the federation to look after their interests—although maybe the noble Baroness, Lady Brady, will say something different. Many of them are massive brands in their own right. The basis of the breakaway super league was largely due to that and because they had become distinctive.
Lest anybody tells you that it could not happen now because of this legislation, let me tell you, from being inside football for such a long time, that while you may think that that is the case, the truth is that it has already happened. The first big reorganisation steps have been taken by UEFA, with the support of the giant clubs, and recent law cases will consolidate the supremacy of the giants in this respect. The Premier League will tell you that it is the natural regulator. It plainly believes that it should do that job unrestrained. But all regulation can threaten consumer and commercial innovation. I do not believe that this will be the case, however, and this is why I welcome the Bill so much. If you tell that story to people in many other industries, they will tell you that relevant rules of engagement are possible.
It is true that the Premier League has been an extraordinary achievement. It has built a successful global business, and that is not easy to do. They say you could kill the goose that lays the golden egg. Few of the businesses that are owned by Brits and are making money in this way are keen on anything that might alter it. However, I hope it will be appreciated in the House—I say this without any rancour—that in football circles generally around the world, there is a strong feeling that we are also seriously disliked. I do not mean everybody but quite a number of people. They feel that we hoover up many of their best and aspiring players, we bring them to this country and they play in clubs which are often owned by people from other countries—that is all probably the way of business but they are seen in that way. If you really want to aggravate them—I say this to the noble Baroness the former Leader of the House—start saying to them that England is the home of football. Say that to people in Brazil who have five stars on their shirts, or to people in Germany or Italy with four stars on their shirts, or to people from Argentina with three stars on their shirts. They will say, “Do you think we’re not homes to football?” If you want to sing “Football’s coming home”, I guarantee that it will be the last time they will ever talk to you.
The test about who we should have as a regulator is a very important one, and an independent regulator is absolutely critical.
There is one other thing; I promise that I will say this very briefly. I welcome the legislation, but still missing from it is any real attempt to regulate some of the bodies that sit across football aside from the regulator. They are the bodies that will negotiate the television and other rights, and the financial arrangements that will be made will be unbelievably complex. We all think we know about football. I do not mean to upset anybody—I really do not—but I bet that your Lordships really do not. Only one specialist company ever conducted the negotiations over the financial rights—Reel Enterprises did it on behalf of the football authorities. Its complexity means that whoever the regulator is will need to understand finance. You can tinker with the regulation all you like but it will not alter some of the fundamentals about where the money flows are. Those money flows will be understood only by people who have done that job, and there are probably no more than 10 of them in this country.
I conclude on that point because I would like to see this as a possible addition to the Bill. If we really want to do the job rather than to take a step towards it and then find we failed, we ought to do the whole of the job.