Football Governance Bill [ Lords ] (Tenth sitting)
Debate between Clive Betts and Stephanie PeacockTuesday 17th June 2025
(2 weeks ago)
Public Bill CommitteesRead Full debate Football Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 June 2025 - (17 Jun 2025)
Stephanie Peacock
I believe that amendment 127 is consequential on the hon. Member for Old Bexley and Sidcup’s amendment 124 regarding our changes to the Bill to include parachute payments, which we debated last week—although I think he gave a slightly more wide-ranging speech just now. Amendment 124 would have prevented parachute payments from being considered under the backstop, and it would have prevented the Secretary of State from amending the revenue in scope of the backstop in future. I will state here what I stated last week, and what has been my consistent position, even in opposition: for the regulator to make an informed decision regarding the financial state of football, it must consider all relevant factors, and that includes parachute payments.
As drafted, the “relevant revenue” in scope of the backstop expressly includes broadcast revenue, because that is the predominant source of revenue and distributions for the relevant leagues. However, there is no guarantee that that will always remain the case. As I covered in last week’s debate, the financial landscape of football is ever-changing. No one could have predicted 30 years ago just how much television broadcasting of English football would grow, and who can predict where technology may take us in another 30 years? That is why clause 56 allows the Secretary of State to specify other kinds of revenue to be included as “relevant revenue”. This will simply future-proof the backstop mechanism.
However, as I outlined in the previous debate, there are still clear constraints and safeguards regarding this power. The Secretary State must consult with the regulator, the FA and the relevant leagues before using the power, and can use the power only when there has been
“a material change of circumstances”.
Any use of the power will be scrutinised by Parliament under the affirmative procedure.
Mr Clive Betts (Sheffield South East) (Lab)
We cannot set something in stone and say, “That’s how it’s going to be forever.” Giving that bit of flexibility is right. I was talking to my friend Richard Caborn, who was a previous sports Minister, and he said to me that, when discussions first began about revenue within football, they were concentrated on the television rights to UK matches in the United Kingdom. It has since become apparent, of course, that it is the international rights that are the real driver of resources. That was not thought about when the first distribution was done.
Stephanie Peacock
I appreciate my hon. Friend’s intervention; he has put an important point on the record, and it is always nice to be able to pay tribute to Richard Caborn, the former sports Minister and my former south Yorkshire colleague. He has done a lot of work in this area; indeed, I know that he has worked very closely with my hon. Friend.
This process is simply about future-proofing. Given that this Committee has already agreed to clause 56 and disagreed to the shadow Minister’s amendment 124, all that this amendment would achieve is to remove one of the safeguards, making regulations to update the definition of “relevant revenue” negative rather than affirmative. For those reasons, I hope that the shadow Minister will withdraw his amendment.
Stephanie Peacock
Clause 91 sets out the parameters and procedure around the powers of the Secretary of State to make regulations under the various provisions of the Bill.
Question put and agreed to.
Clause 91 accordingly ordered to stand part of the Bill.
Clause 92
Minor definitions etc
Mr Betts
I beg to move amendment 11, in clause 92, page 75, line 17, after “functions” insert
“or give rise to the perception that said person’s functions have been prejudicially affected, including (but not limited to) a situation in which a person is—
(a) employed by or engaged as a consultant by any specified competition organiser or any group undertaking of a specified competition organiser;
(b) connected in any capacity with an organisation which has, in the last year, received at least half of its income from a specified competition organiser;
(c) connected with a group undertaking of an organisation within the scope of part (ii);
(d) connected in any capacity with an organisation which has, in the last year, received at least half of its income from any of the organisations listed in parts (ii) or (iii); or
(e) connected (as defined in section 252 of the Companies Act 2006) with an individual within the scope of parts (i), (ii), (iii) or (iv) of section 92(1).”
The amendment gives further detail to the definition of “conflict of interest” within this Bill.
It is a pleasure to see you in the Chair, Mr Turner, hopefully for the last time—in this Committee, I mean. The amendment is simply trying to make the Bill a bit more specific about what “conflict of interest” might mean. I am sure that the Minister will tell me that the amendment is not quite right in its drafting and wording. Nevertheless, it is at least worth putting on the record that this is an important issue. Maybe we can obtain some clarification about what “conflict of interest” means in practice.
Stephanie Peacock
I thank my hon. Friend for tabling this amendment. I acknowledge its intent to fortify the provisions in the Bill for dealing with conflicts of interest. We will cover “Minor Definitions” in detail when we discuss the next group of clauses, which includes clause 92 stand part. However, I will touch on “Minor Definitions” briefly when responding to this amendment.
As we discussed at length on day one of this Committee, when we debated conflicts of interest, it is essential that the regulator can deliver its regime free from undue influence and vested interests. The Bill already makes it clear that the regulator will be free from conflicts of interest and the Government amendments made in the other place strengthen those protections even further—indeed, beyond any doubt.
We believe that the existing definition of a conflict of interest is appropriate and will capture the correct issues. That definition is any interest that
“is likely to affect prejudicially that person’s discharge of functions”.
I reassure my hon. Friend that our definition is well precedented; for example, it can be found in the Pensions Act 2008 and the Financial Guidance and Claims Act 2018.
Football Governance Bill [ Lords ] (Ninth sitting)
Debate between Clive Betts and Stephanie PeacockTuesday 17th June 2025
(2 weeks ago)
Public Bill CommitteesRead Full debate Football Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 June 2025 - (17 Jun 2025)
Stephanie Peacock
Clause 57 sets out a basic set of conditions that must be met for a league to be allowed to apply to the regulator and request that the backstop be triggered. The regulator cannot unilaterally trigger the backstop process; it must receive an application from one of the leagues under clause 57. This clause sets out that a regulated league can apply to trigger the process if there are unresolved issues between it and another league in relation to the distribution of relevant revenue. We discussed the definition of relevant revenue when we debated clause 56.
For a league to apply to trigger the backstop, at least one of the four conditions outlined in clause 57 must be met. Those four conditions are as follows: no distribution agreement is in place between the relevant leagues; there has been a material reduction in the amount of relevant revenue received by a relevant league since the last distribution agreement was reached; there has been a material change in circumstances in relation to the relevant revenue received by one or both relevant leagues since the last distribution agreement was reached; and at least five years have passed since the last distribution agreement between the relevant leagues came into force.
Each of the conditions is designed to mitigate a specific risk to the sustainability of the pyramid. Those are a complete absence of any distribution deal; a reduction in distributed revenue; a significant change in the circumstances surrounding distributions; and an old deal no longer fit for purpose but unable to be refreshed because the industry cannot agree. The conditions set an appropriate framework for when a league can apply to trigger the process. They help to avoid vexatious applications or fishing expeditions when a perfectly good, up-to-date industry deal is already in place. That is why clause 57 should stand part of the Bill.
Clause 58 specifies procedural steps and requirements. The applicant league has to comply with those for its application to trigger the backstop to be valid. Before making an application, the league must first notify the other relevant league and the regulator of its intention. That prevents either league from being blindsided by the process being triggered. The notice must list the issues in dispute, explain why one of the relevant conditions in clause 57 is met, and invite representations from the other specified competition organiser. That act, in and of itself, may help to trigger useful discussion between the leagues, as clearly outlining the issues preventing an agreement from moving forward will bring the leagues closer to compromise. After the other relevant league has had a chance to make any representations, the applicant league may apply to the regulator to trigger the process. It must include the other league’s representations with its application. That ensures that the regulator has the information that it needs from both leagues, so that it can make a considered decision on whether to trigger the backstop. The exchange of representations is also an early opportunity for the leagues to come to an agreement themselves, before the process is triggered. Ultimately, this clause is about creating transparency and promoting dialogue, which sets the tone for the rest of the backstop process.
Clauses 57 and 58 together outline the requirements that must be met for a league to apply to trigger the backstop process. The requirements in clauses 57 and 58 are just the first hurdle that a league has to clear in order for the regulator to consider its application. In order to actually trigger the backstop the regulator then has to assess whether the application meets certain legal tests set out in clause 59, which we will discuss further in a later group. I beg to move that clauses 57 and 58 stand part of the Bill.
Question put and agreed to.
Clause 57, as amended, accordingly ordered to stand part of the Bill.
Clause 58
Applications under section 57: procedural and other requirements
Amendments made: 30, in clause 58, page 48, line 7, at end insert—
“(za) set out details of the question or questions for resolution mentioned in section 57(1) to which it is intended the application will relate,”
This amendment provides that a notification under clause 59(1)(a) must set out details of the question or questions for resolution to which it is intended the application will relate.
Amendment 31, in clause 58, page 48, line 8, leave out “the application relates” and insert “that question relates or those questions relate”.
This amendment provides that a notification under clause 59(1)(a) must specify the qualifying football season or season to which the question or questions for resolution relate.
Amendment 32, in clause 58, page 48, line 12, leave out paragraph (c)
This amendment is consequential on Amendment 30.
Amendment 33, in clause 58, page 48, line 22, at end insert—
“(za) set out details of the question or questions for resolution mentioned in section 57(1) to which the application relates,”
This amendment provides that an application under clause 57 must set out details of the question or questions for resolution to which the application relates.
Amendment 34, in clause 58, page 48, line 23, leave out “the application relates” and insert “that question relates or those questions relate”.
This amendment provides that the application under clause 57 must specify the qualifying football season or season to which the question or questions for resolution relate.
Amendment 35, in clause 58, page 48, line 27, leave out paragraph (c)—(Stephanie Peacock.)
This amendment is consequential on Amendment 33.
Clause 58, as amended, accordingly ordered to stand part of the Bill.
Clause 59
Decisions by the IFR on applications under section 57
Amendments made: 36, in clause 59, page 48, line 33, leave out “the qualifying football season or seasons” and insert “one or more of the questions for resolution”.
This amendment provides that the IFR must decide whether the resolution process should be triggered in relation to one or more of the questions for resolution to which the application under clause 57 relates.
Amendment 37, in clause 59, page 48, line 33, after “relates” insert “(or a modified version of one or more of those questions)”.
This amendment provides that the IFR may decide that the resolution process should be triggered in relation to a modified version of one or more of the questions for resolution set out in the application under clause 57.
Amendment 38, in clause 59, page 48, line 36, leave out “qualifying football season” and insert “question or questions for resolution”.
This amendment provides that the IFR must be satisfied that the conditions in clause 59(2) are met before deciding to trigger the process in relation to a question or questions for resolution.
Amendment 39, in clause 59, page 48, line 38, leave out “that season” and insert “each season to which the question relates or the questions relate”.
This amendment is consequential on Amendment 38.
Amendment 40, in clause 59, page 48, line 41, after “triggered” insert “in relation to the question or questions for resolution”. —(Stephanie Peacock.)
This amendment is consequential on Amendment 38.
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 93, in clause 59, page 49, line 1, after “(c)” insert
“has exercised any of the IFR’s other functions under this Act in order to resolve the question or questions for resolution and such question or questions remain unresolved, or”.
It is a pleasure to be here with you in the Chair, Sir Jeremy. I will pass this over to the Minister. This is just an attempt to slightly clarify and strengthen the role of the regulator and the point of intervention. It would be helpful to see how this fits in with the way that the Minister has reconfigured the clause with her amendments.
Stephanie Peacock
I thank my hon. Friend for his amendment. We will discuss clause 59 in more detail in the next group. It sets out the tests that must be met for the regulator to justify accepting a league application so that it can then trigger the backstop. The amendment adds to clause 59 to give the regulator an additional basis on which to justify triggering. It could accept an application to trigger the backstop if it has tried and failed to resolve the disputed distribution issues using its other regulatory functions. I want to reassure my hon. Friend that the amendment is not necessary. Clause 59 already allows the regulator to accept an application to trigger if it considers that its other functions would not be able to resolve the disputed issues in a reasonable timeframe. That appropriately covers the scenario set out in my hon. Friend’s amendment.
If the regulator has already tried and failed to resolve a distribution issue using its other functions, that would be a reasonable basis for it to conclude that its other functions were not up to task. The existing test in clause 59 could then be met and an application trigger at the backstop could be accepted. It is important to clarify once again that the regulator would not be triggering the process itself. This is simply a clarification regarding a situation in which an application was submitted and the regulator had tried and failed to resolve the issue outlined previously using its other powers. In this situation the regulator would still have the discretion as to whether or not it triggered the process based on whether the application met the other high threshold. I hope this provides some reassurance. We will discuss this a little further in the next group.
Mr Betts
We are off to a good start this morning. I am 100% convinced that the Bill already does what I was seeking it to do. I hope we are 100% convinced on the other issues that we debate later on. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 41, in clause 59, page 49, line 4, after “triggered” insert “in relation to one or more of the questions for resolution”.
This amendment is consequential on Amendment 38.
Amendment 42, in clause 59, page 49, line 10, at end insert—
“(4A) Where the IFR is minded that the resolution process should be triggered, the IFR must consult the Football Association on the question or questions for resolution in relation to which it is minded to trigger the process.”
This amendment requires the IFR to consult the Football Association on the question or questions for resolution in relation to which it is minded to trigger the process.
Amendment 43, in clause 59, page 49, line 15, at end insert—
“(zi) the question or questions for resolution in relation to which the IFR is triggering the resolution process,”
This amendment provides that the notice under clause 59(5) must set out the question or questions for resolution in relation to which the IFR is triggering the resolution process.
Amendment 44, in clause 59, page 49, line 16, leave out “the resolution process relates” and insert “that question relates or those questions relate”.
This amendment provides that the notice under clause 59(5) must set out the qualifying football season or seasons to which the question or questions for resolution relate.
Amendment 45, in clause 59, page 49, line 18, leave out sub-paragraph (ii)
This amendment is consequential on Amendment 43.
Amendment 46, in clause 59, page 49, line 18, at end insert—
“(iia) how the IFR has taken account of any representations, copies of which accompanied the application under section 57 by virtue of section 58(5)(d), in setting out that question or those questions, and”
This amendment requires the IFR to set out in a notice under clause 59(5)(b) how it has taken account of any representations when setting out the question or questions in relation to which it is triggering the resolution process.
Amendment 47, in clause 59, page 49, line 20, leave out “the question or questions for resolution” and insert “that question or those questions”
This amendment is consequential on Amendment 43.
Amendment 48, in clause 59, page 49, line 21, at end insert—
“(5A) Where any of the questions for resolution set out in the notice differ from those to which the application made under section 57 relates, the notice must set out the extent of, and reasons for, those differences.”—(Stephanie Peacock.)
This amendment requires the IFR to set out the extent of, and reasons for, any differences between the question or questions for resolution set out in a notice under clause 59(5)(b)(ii) and the question or questions for resolution set out in an application under clause 57.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
As we discussed on clauses 57 and 58, the backstop can be triggered only in response to an application by a league. Clause 59 sets out how the regulator will assess an application to trigger, how it will decide whether to trigger at all and how it will determine exactly which issues need to be resolved under the backstop. The backstop has been carefully designed to deliver the right outcomes with minimal regulatory involvement. As part of this, it has been designed to be used as a last resort. That is why this clause introduces high statutory thresholds that must be met in order for the backstop to be triggered.
In particular, the clause sets out that the regulator must have reasonable grounds to suspect that its ability to advance at least one of its objectives would be jeopardised if the backstop were not triggered. The regulator must also consider whether other regulatory tools could be utilised to resolve the issues instead. The regulator must be satisfied that at least one of the conditions in clause 57—which we have already discussed —is met.
Stephanie Peacock
Once the backstop is triggered, clause 60 requires the leagues to enter mandatory mediation as a first stage. As we have made clear, the Government’s strong preference is for a football-led solution to the financial distribution issues. I welcome the shadow Minister’s comments along those lines.
A mediation stage gives the relevant leagues an opportunity to reach an agreement with minimal intervention from the regulator. The stage is designed to facilitate meaningful negotiation and compromise between the parties. To this end, it encourages the leagues to appoint a mutually agreed mediator, but if they cannot, it ensures the regulator will appoint someone with the appropriate skills and experience.
The leagues can end the mediation process for multiple reasons. Most notably, the mediation—and the process as a whole—will end if an agreement is reached. However, the mediator can also end the process if it is not producing meaningful, good faith negotiations. The process can also end if it reaches the 28-day deadline. If the leagues are engaging in meaningful discussion but the deadline is reached, the mediator can extend the process by up to another 28 days.
We believe that process is flexible enough to encourage negotiation but concrete enough to ensure the backstop remains an effective regulatory intervention. I commend the clause to the Committee.
Question put and agreed to.
Clause 60, as amended, accordingly ordered to stand part of the Bill.
Clause 61
Final proposal stage
Mr Betts
I beg to move amendment 3, in clause 61, page 50, line 40, leave out
“require any final proposal to be accompanied by supporting evidence”
and insert
“require any final proposal to—
(i) be accompanied by supporting evidence;
(ii) be consistent with the resolution of any relevant issues identified in the Regulator's most recently published State of the Game report;
(iii) give effect to the views of any relevant specified competition organiser which has not been invited pursuant to clause 61(4)(c) to submit to the committee a final proposal; and
(iv) advance the Regulator's objectives in section 6, consistent with its general duties and Regulatory principles in sections 7 and 8.”
This amendment would set additional requirements to accompany any final proposal for the resolution process.
This is quite an important issue, because it concerns the principle and basis on which the regulator comes to a decision. My amendment simply sets out certain things that the regulator must have regard to and take into account when making that decision.
First, there should be supporting evidence—that seems straightforward. Secondly, and importantly, we ought to keep anchoring what the regulator does back to the essence of this proposed legislation and the regulator’s purpose. Clause 6 very clearly sets out the regulator’s objectives of promoting the financial soundness of regulated clubs and the financial resilience of English football, and I think we can all agree that that is what the regulator should be doing and seeking to achieve.
Surely, therefore, when we are talking about the detail of how the regulator reaches a final decision on the backstop, we ought to be absolutely clear that it must have foremost in its mind those initial objectives. Otherwise, what is the point of the regulator and its objectives? Why are we in this Committee if not to address the financial soundness of clubs and English football as a whole?
My amendment mentions considering the views of others who may not be formal parts of the backstop mediation process. It provides that the regulator would not have to listen to them, but could
“give effect to the views”
of the Football Supporters’ Association, the Professional Footballers’ Association or others who may have views. Those groups would not determine what the regulator decides to do, but surely the regulator has to take account of their views.
I hope that the Minister gives serious consideration to at least making sure that, when reaching that final and absolutely crucial decision on financial distribution, the regulator’s aim should be to deal with the problems of the financial soundness of clubs and the overall financial soundness and wellbeing of English football.
Stephanie Peacock
I thank my hon. Friend for his amendment. Although we are still keen for an industry deal on distributions, part of getting it right is ensuring that the regulator is best placed to act if needed. As the Government amendments that we are due to debate in the next two groups show, we have reflected on many of the same points. We think it is right that any distribution order shows how it aligns with the findings of the state of the game report and with the regulator’s objectives and duties, including the duty to have regard to its regulatory principles.
That is why Government new clauses 3 and 4, which amend the final stages of the backstop, already address these issues. We will discuss the new clauses in more detail shortly, but they clearly require that the regulator sets out any relevant findings from the state of the game report and that any league proposals include evidence about how they address those findings. They will also require that any order the regulator makes addresses the state of the game findings, and they highlight the importance of the regulator’s objectives and its general duties, including the regulatory principles.
I also make clear again that, after we set out the competitions in scope of the regime, the regulator’s objectives, namely to protect and promote the heritage and financial resilience and soundness of English football, will apply to the top five divisions of English men’s football. When creating a distributions order between any two leagues, the regulator must have due regard for the wider impact the order may have on all the clubs and leagues it regulates. The regulator must make an evidence-based decision that takes into account all relevant considerations, and its final decision must advance its objectives.
It is also important to clarify that, while the order will be limited in scope to the questions set out when the process is triggered, it will not be without context. Given the important role a satisfactory distributions order will play in the future of the entire sport, the regulator will need to come to a solution that works for all of football.
For those reasons, I cannot accept my hon. Friend’s amendment, but I hope that his concerns will be appropriately addressed by the Government amendments that we will debate shortly.
Mr Betts
I am pleased to see that the Minister actually read my amendment and formulated her new clauses accordingly. What she says is reassuring. As she just said, there is no point in the regulator doing a state of the game report unless it has regard to it when coming to a view about financial distribution. That is absolutely clear from what the Minister has said, and that is what the regulator must do. On the basis of those assurances, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
I will discuss that in more detail in a moment, but I gently say to the hon. Member that it will not be a personal decision by the regulator; as we have discussed, the regulator will make a decision based on the findings of the state of the game report and will be guided by the regulatory principles. I do not want to get drawn into speculating whether they will or will not do that. We need the state of the game report to be done quickly, so that if the backstop is triggered, the regulator can consider the findings in the whole and make an informed decision.
On amendment 4, as the Government amendments show, the regulator will issue a notice that sets out the relevant findings of the state of the game report, which will need to be addressed by a distribution order, and the order must explain how it addresses those findings. We are absolutely aligned on the intention behind amendment 5. This exact change—to ensure that the regulator need not adopt league proposals wholesale but can instead design its own solution—is core to new clause 4.
Amendment 141, tabled by my hon. Friend the Member for Sheffield South East, seeks to shorten the transition period for parachute payments. While a timely distribution order is a priority, we must ensure that there are adequate protections for relegated clubs, to prevent a cliff edge. That is why the Bill guarantees that there can be no reduction at all in parachute payments, for an absolute minimum of one year from the end of the first season to which a distribution order applies. Shortening that period would give relegated clubs less time to plan financially, putting them at greater risk of financial trouble. That is, after all, the issue we are seeking to address through the legislation. I know that may not be the answer that my hon. Friend wants, but for those reasons I hope he will withdraw his amendments.
Mr Betts
I am still not quite sure how—given that all clubs now know that a regulator will be appointed, that the leagues and clubs know that financial distribution is at the heart of the Bill, and that a club can be promoted during the two-year period—any club can start preparing for that situation. At the beginning of that period, the club would not know whether it was going to get parachute payments, because it could be promoted and relegated in that period. I do not think the idea holds that two years gives certainty to clubs.
I am really worried about the idea of signalling, at this stage, that there will potentially be no change in financial distribution until the end of this Parliament. I do not know how far the Minister has thought that through, but if we want to encourage the Premier League and the EFL to sit down and reach an agreement—if that is the preferred way forward, and I think it is—surely the idea that the process can be extended by not reaching an agreement until beyond the next election is an incentive for the Premier League to do nothing. It is waiting for the pressure to come off, and the way to relieve it is simply to do nothing and hope that it goes away after the election.
Clearly, that pressure will go away if the Conservative party wins the election and implement a Bill with parachute payments not included in the regulator’s remit. That is what will happen. We were all elected to achieve change, and the change that most fans want to see is the addressing of the fundamental disparity within the English game that produces a cliff edge and all the problems in the Championship. We know how those problems need to be addressed: with the regulator’s powers in this excellent Bill. Why sit for two years after the regulator makes a decision and do nothing, when to give a year is fine?
The Minister has heard comments and concerns from hon. Friends today—Committee members who obviously have a great deal of interest in football in general and in their clubs in particular. Will she agree, as the hon. Member for Cheltenham asked, to take the matter away and give it further consideration? I do not want to push the Minister here and now on the words in my amendment, but I do want her to give an understanding that she recognises that there is a problem that needs to be addressed to satisfy her colleagues.
Stephanie Peacock
I assure my hon. Friend that I have thought about it carefully—that was a fair challenge. Indeed, when in opposition, I tabled an amendment to the previous Government’s Bill. I think we have very much strengthened the legislation by ensuring that parachute payments are in scope. We thought it odd to have a Bill on the financial sustainability of football without including them. That is why this Government have strengthened the Bill.
I completely acknowledge the strength of feeling on the matter. I say again that the regulator can consider it, but that does not necessarily mean that it will. It will need the evidence in the state of the game report. I appreciate and completely understand why hon. Members have shared examples from their own clubs, and are speculating on the impact of parachute payments, but that is not my role today. It is up to the state of the game report and the independent regulator to come to that decision, if the backstop is triggered.
Mr Betts
Would the Minister not therefore give the regulator a discretionary power to decide when it should be implemented, after either one year or two years? We will have a regulator who will be on top of the job and will have seen all the issues and evidence, in detail that we cannot see in Committee. Will the Minister consider giving flexibility and discretionary powers to the regulator?
Stephanie Peacock
No, I am afraid I am not in a position to do that. It is a one-year period from the end of the first season to where the order applies. We think that is a balance. It is obviously a challenging issue, with strong feelings, but formulating this part of the Bill is about striking a balance. We believe we have the right one, but I acknowledge my hon. Friend’s concerns.
Mr Betts
I am disappointed by the Minister’s response. She has generally been very helpful in trying to acknowledge concerns when they have been raised, and in agreeing to have a look at them. I will not press my amendments to a vote at this stage, but I will bring them back on Report.
The Minister is entirely reasonable and open-minded on these matters, and has engaged in discussion on all sorts of things, but I worry that a handful of clubs in the Premier League are determining what happens with distribution orders, which is disappointing. I will return to this issue in due course, because I do not think the Minister’s approach on this clause has been how she has approached the rest of the Bill. I am disappointed, but I will not press my amendments to a vote.
Clause 62 disagreed to.
Clause 63
Duration and revocation of distribution orders
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
It is important to build safeguards into the backstop process, and clause 63 outlines what happens if circumstances arise in which a distribution order made under clause 62 is no longer viable or necessary. To provide clarity to the leagues, any distribution order will need to specify when it comes into force and how long it is in force. In ordinary circumstances, an order will remain in force until the specified period ends, but clause 63 allows the regulator to revoke an order in exceptional circumstances. The regulator might choose to do that if there was an unexpected change to the broadcast market that meant an order was no longer fit for purpose. It is important that the Bill provides that flexibility to prevent a scenario in which an unsuitable arrangement is left to stand.
Similarly, the clause ensures that the regulator will revoke an order if a league subsequently strikes a distribution deal covering the same seasons as the order. That again demonstrates the Government’s commitment to prioritising and encouraging industry-led agreements wherever possible. Whenever the regulator revokes an order, it will need to notify the parties and set out the reasons for its decision, continuing the underlying commitment to transparency at every stage of the process. I urge that the clause stand part of the Bill.
Football Governance Bill [ Lords ] (Eighth sitting)
Debate between Clive Betts and Stephanie PeacockThursday 12th June 2025
(2 weeks, 5 days ago)
Public Bill CommitteesRead Full debate Football Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2025 - (12 Jun 2025)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I will respond to the points made by the shadow Minister and then come to those from the hon. Member for Spelthorne. The appointment of an administrator would not delay a club entering administration, as that is a separate process from the appointment of a specific administrator. My officials have met both relevant teams in the Insolvency Service and the Department for Business and Trade to ensure that the provisions in the Bill do not impinge on the existing insolvency processes. That speaks to the point made by the hon. Member for Spelthorne.
As for the shadow Minister’s other questions on precedent, special administration regimes exist for various purposes, such as the water utilities or energy suppliers. They have distinct processes for entering administration. The provision in the Bill does not go as far as that. Ideally, the provision will not need to be used frequently, if at all, but if it is, it will look to ensure that fans can feel more confident than they do now. It works alongside the requirements but it still stands alone, so I commend the clause to the Committee.
Question put and agreed to.
Clause 47 ordered to stand part of the Bill.
Clause 48
Duty not to relocate without approval
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 91, in clause 48, page 40, line 18, at end insert—
“(e) if the arrangements would represent a significant upheaval of the connection between the fans of a club domiciled in England and Wales and the club (taking into account the following non-exhaustive factors: proximity to home ground, proximity to other clubs’ grounds, journey time for fans and any other factors that the IFR deems relevant) the club’s fans have actively approved the arrangements.
(4A) In order for the Regulator to be satisfied with subsection (4)(b), a regulated club must take reasonable steps to establish that the majority of the club’s fans domiciled in England and Wales do not consider the arrangements to constitute significant harm to the heritage of the club.”
Mr Betts
I thank the Minister for the reply—I think. That was a bit of a reply about new clause 14 but she did not really address amendment 91 and the regulator being required to take account of factors such as relocation over distance and where fans live. In some ways, I think that is the strongest part of this discussion, because it is the thing that worries fans the most.
Stephanie Peacock
I talked about taking a holistic approach, and I said that the regulator must consider a number of factors—not just the current views of fans but the club’s history and how fans get to the ground. I acknowledge some of the examples that my hon. Friend has given, and I was really pleased to visit the new Everton stadium a few months ago. We obviously recognise that sometimes it is very legitimate, and other times it is not. That is why we have gone for the holistic approach.
Stephanie Peacock
Yes, and I have obviously drawn attention to some of them in my remarks. That is why we do not want to be prescriptive; we want the regulator to be able to take a holistic, case-by-case approach.
Stephanie Peacock
It was. I gave some examples in my contribution about history—
The Chair
Stephanie Peacock
I thank hon. Members for tabling the amendments to clause 49. We will discuss the clause in more detail in the clause stand part debate, so I will reserve some of my comments until then. To summarise, however, the clause places a duty on regulated clubs not to make changes to key items of club heritage without the support of the majority of the club’s fans and approval by the Football Association.
As set out in clause 7(4), the regulator is already required to monitor compliance with obligations. However, we do not think it appropriate for the regulator to be directly involved in every instance of a heritage change. As a light-touch regulator, we do not expect it to intervene where clubs are already meeting what is required of them. Instead, it will be able to have a wide view, and intervene where there are concerns.
Any change to heritage assets will necessarily come under significant scrutiny by fans and the public, as well as the FA through its existing fan engagement standards. Additionally, in any case of non-compliance, the regulator will have sufficient enforcement options at its disposal. The process is therefore appropriately safeguarded without the need for direct regulatory involvement each time.
Turning to amendments 111 and 92, club names are a vital part of the club’s heritage. The legislation therefore introduces legal protections for that heritage asset. The FA has a long track record of being able to take a considered approach to name changes, listening to fans and heritage concerns, and taking appropriate action. That was demonstrated in the case of Hull City: the FA blocked multiple attempts to change the name to “Hull Tigers”. The FA, with oversight of all levels of football, is also in a good position to ensure that name changes do not have unintended implications for clubs that are outside the regulator’s scope.
The Government therefore believe that the FA is in the best position to take into account fan opinions and all the other relevant considerations, with the regulator acting as an enforcement backstop. That is in addition to any mandatory licensing requirement for clubs to consult their fans on any matters relating to the club’s name, among other heritage assets.
The shadow Minister asked which fans will be consulted. For the most part, clubs will be in the best position to understand the demographics of their fans. The regulator will be able to provide guidance for clubs for on how best to consult fans. Clubs in the lower leagues will tend to have a more local fanbase, whereas larger clubs will have fanbases from across the world, as the hon. Member for Sheffield South East pointed out. That is why we want to implement proportional and flexible proposals.
Mr Betts
We all feel concerned about this issue. It is not about the clubs that already consult well; it is about those that do not consult, but will be compelled to consult by the legislation, and will not really want to—they will find ways around it. The regulator can give guidance, but if a club does not follow that guidance, what will the regulator’s likely course of action be?
Stephanie Peacock
We will come on to enforcement, but a range of enforcement options will be available to the regulator, if it feels that a club is not doing what it asked the club to do.
Stephanie Peacock
Clause 49 requires a club to establish that a majority of domestic supporters approve any material change to its emblem, crest or predominant home shirt colours. A club’s name, home shirt colours and emblem are intrinsic parts of its heritage, intertwined with decades of club and supporter history. The decision to materially change any of them therefore requires considered thought and consultation. The clause means that changes can still be made, but only if, and once, fans have voiced their support. In practice, we expect that could take place through a formal survey of fan opinion, as we saw last season with Bristol Rovers, where supporters opposed the final proposal that was put to them, resulting in the club halting the redesign of their emblem.
The clause also requires clubs to get FA approval prior to changing the name that the club’s team plays under. The view of supporters is a significant factor in the FA’s decision making. However, the FA may also need to balance wider considerations regarding to a name change. That might include whether there would be any adverse effects on other clubs throughout the pyramid. The existing FA rule has been used to prevent name changes, which have been proposed in the past against the wishes of fans, as I mentioned with the example with Hull City. Codifying this as a legal duty will mean there are additional powers to ensure clubs do not make changes without proper approval and allow the regulator to respond to instances of non-compliance. The clause serves one of the key objectives of the regulator: protecting the heritage of English football. I commend it to the Committee.
Mr Betts
I am still a bit uneasy about those clubs that are not going to enter into the spirit of the really important part of the Bill: proper fan consultation. I come back to Sheffield Wednesday and its owner, who thinks sitting down for 10 hours of deliberation with hand-picked fan groups and not answering any questions amounts to a consultation—it does not.
I was interested in what the Minister said about how the regulator will have the right to issue guidance about how consultation should happen, and then there can be enforcement if the guidance is not followed, which means the guidance effectively becomes a requirement. I hope that we can elaborate on that later in the Committee’s discussions, as she indicated we would, because, without those backstop powers, there will be some club owners who regard the club as their personal possession and believe that no one has a right to interfere in how they run it.
Stephanie Peacock
Names interact with other clubs in the pyramid, which is not the case with shirts and colours, and we think there are strong provisions in the Bill for fan consultation.
Mr Betts
I hear what the Minister said, but I want to think about that. I know what her good intentions are, but I also know there may be some people out there with bad intentions; it is about making sure that they come in line with the Minister’s good intentions. I am holding back to see what further discussions we have, but this is really important. It is a wider issue: there are so many clubs with so many disparate fan groups, and owners will pick and choose if there is not certainty. That is why I raised the issue, which I think we ought to come back to, of a clear role for the Football Supporters’ Association, the body that oversees fan groups in this country. It has a neutral view of which groups are the most important and relevant in different clubs, and it can help the regulator enormously in what, in some cases, will be a challenging process of trying to identify the fan groups who really speak for fans in those clubs.
Mr Betts
I beg to move amendment 6, in clause 53, page 43, line 35, after “club” insert
“and in particular that the starting point for calculation of the levy payment applicable to a particular club should be a percentage of annual revenue”.
This amendment would require the IFR to have regard to a football club’s percentage of annual revenue when calculating a levy payment.
I encourage the Minister to say whether she thinks that the levy payment should relate to the income of clubs. Some clubs are clearly mega-rich—multi-million pound businesses, every year—but other clubs’ income is down in the few thousands of pounds. My amendment is probing, really, but will the Minister confirm whether clubs’ income is the basic building block on which the levy will be formulated?
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East for tabling his amendment. The Government completely understand the importance of any charges on clubs being transparent and proportionate and offering value for money. That must be achieved while maintaining the regulator’s operational independence and flexibility to respond to industry developments in the future. I will come on to discuss the levy in detail, but I will set out the key points now for clarity, in relation both to this amendment and to how the Bill ensures the levy is affordable for clubs.
The regulator must set out in levy rules how the annual levy payments will be calculated. The Bill explicitly requires the regulator to have regard to the club’s financial resources and position in the pyramid. That would include revenue. It should ensure a proportionate approach where no club, big or small, is asked to pay more than what is fair and affordable. Premier League clubs are expected to shoulder the majority of costs, reducing the financial burden on smaller clubs.
It would not be appropriate to prescribe an exact methodology for charging the levy in legislation, as doing so would remove the regulator’s ability to explore other possibly more effective and proportionate methods of charging. That would be counter to the agile and independent regulator we want to create. For example, a club might have a relatively low organic revenue, but its owners might have very deep pockets. The regulator might want to take that into account to ensure that charges are fair, proportionate and relative to circumstances.
I also want to highlight that there is a statutory requirement for the regulator to consult industry on the levy. Every regulated club will be consulted. That transparency means that no club will be surprised by the changes asked of them. That will be sufficient to ensure the levy is fair and proportionate. For the reasons I have set out, I am unable to accept the amendment.
Stephanie Peacock
I beg to move amendment 27, in clause 56, page 46, line 27, leave out
“means an order under section 62(1) or (3)”
and insert
“has the meaning given by section (Distribution orders)(6)”.
This amendment is consequential on the insertion of NC4.
The amendment is consequential on Government new clause 4, which we will debate later. Although it depends on that later change, the amendment would change clause 56, which is why we are discussing it now. We will also discuss clause 56 in more detail later, but one of the things it does is set out key definitions of key terms used throughout the backstop provisions. One of those defined terms is “distribution order”, which is the order made by the regulator at the end of the backstop process. It is designed to resolve the questions for resolution if the leagues have not managed to do so during mediation. Currently, the Bill’s definition of “distribution order” refers to clause 62, but we propose to remove clause 62 and replace it with new clause 4. New clause 4 completely changes the final stage of the backstop process. I met the shadow Minister and the Liberal Democrat spokesperson, the hon. Member for Cheltenham, to discuss this ahead of the Bill Committee. It moves the backstop away from a binary, winner-takes-all model, and allows the regulator discretion to design a solution to distribution issues.
We will have a chance to debate that fully when we debate clause 62, so I will withhold some of my comments until we get to that point. This simple amendment just updates the definition of “distribution order”, so that it appropriately refers to new clause 4 instead of clause 62. It is vital that we make these sorts of consequential changes, to ensure that the legislation remains coherent. Therefore I hope that Members will support this amendment.
Mr Betts
As the Minister said, we will come on to debate these issues later, but again, I just want to place it on the record that she has been really listening to concerns that have been raised about the pendulum nature of the previous backstop. This is a much better process, which we will come on to discuss in more detail. Thanks to the Minister, we will discuss it further, but it is a much better framework that we will now be putting in place for the regulator to decide on any disputes or failures to agree between the leagues.
Amendment 27 agreed to.
Stephanie Peacock
I beg to move amendment 28, in clause 56, page 46, line 42, leave out subsection (7).
This amendment removes the definition of “the question or questions for resolution” which is now superfluous.
Football Governance Bill [ Lords ] (Seventh sitting)
Debate between Clive Betts and Stephanie PeacockThursday 12th June 2025
(2 weeks, 5 days ago)
Public Bill CommitteesRead Full debate Football Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2025 - (12 Jun 2025)
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 94, in clause 43, page 34, line 38, at end insert—
“(e) following the revocation by the IFR of the club’s operating licence under clause 19 or under paragraph 9 of Part 1 of Schedule 9.”
I am pleased to see you in the Chair again, Ms Butler; it is a pleasure to have you presiding over us. The amendment is fairly simple, and I hope the Minister will consider it. Clause 43 is quite an important clause, because it deals with the removal of ownership. Ownership, in the end, is of a private asset. A club is a public good for the fan base, but in the end, it is owned by an individual or a corporate entity. The clause provides the regulator with a power, not a duty, to remove owners in certain circumstances if appropriate. All my amendment would do is add the revocation of a club’s operating licence to the circumstances in which the regulator can act. In other words, if the club does not have an operating licence, should not that be a factor that allows, but not forces, the regulator to deal with the ownership of the club?
Stephanie Peacock
I thank my hon. Friend for his amendment. We have seen far too many examples of the damage that can be caused by unsuitable custodians of clubs, and that is why the Bill introduces a strengthened owners and directors test.
I believe that my hon. Friend hopes that the amendment will give reassurance to fans that, where a club fails to comply with regulation and loses its licence as a result, the regulator will be able to remove the owner. The aim is to hold those responsible to account. Let me reassure my hon. Friend that the regulator is already empowered to hold individuals to account for their actions. If the club’s non-compliance or its financial situation gives the regulator concern about the owner’s suitability, it can test them, and they could be failed on that basis. If they are found to be unsuitable, the regulator will have the power to remove them. That ability to isolate and remove unsuitable owners and officers should mean that a club never has to have its licence suspended or revoked on the basis of poor ownership. That means that a club’s fans should not have to suffer the consequences of bad leadership.
The revocation of a club’s licence is the very last resort. We hope the regulator will never have to do that, but I reassure my hon. Friend that if a club is so seriously and consistently non-compliant that the regulator has no choice but to revoke its licence, we would expect the regulator to consider very carefully whether any responsibility for that failure can be laid at the owner’s door, and if the owner is tested and found unsuitable, they can be removed on that basis. We believe that the Bill’s provisions are sufficient to protect fans and hold owners to account where necessary. We hope that they will ensure that a licence is never revoked.
Stephanie Peacock
I will address that point in just a moment.
As a club’s licence is separate from its owners, the licence is held directly by the club itself, not its owners. The removal of an owner will not impact the club’s licence status. This ability to isolate and remove unsuitable and owners and officers should mean that a club never has to have its licence suspended or revoked because of its owner, which means that a club’s fans should not have to suffer the consequences of bad leadership.
We hope that a club losing its licence will be the very last resort, and an unsuitable owner will have to follow the removal order made by the regulator. It will be in the best interests of an unsuitable owner to sell their stake in a club before the regulator has to step in to force divestment and a sale at no minimum price. If the owner fails to comply with this order, the regulator will have enforcement powers that it can use to ensure compliance.
These powers will include a variety of sanctions against the individuals calling shots at the club and, where necessary, directly against the club itself. Where appropriate, the regulator will also be able to seek an injunction from the courts. Having this broad range of tools of escalating severity at its disposal will allow the regulator to take strong action as and when required. For those reasons, I hope that my hon. Friend the Member for Sheffield South East will withdraw his amendment.
Stephanie Peacock
I do not want to get drawn into hypotheticals. As we previously discussed, there might be a perfectly legitimate reason for a club to move—or to move temporarily, such as for flooding. It is not an absolute power. We want to give the regulator discretion when clubs may need that for legitimate reasons. The amendment speaks to where we think clubs are asset stripping or acting in bad faith.
We would expect the power to include assets remaining in the club’s ownership and any plans to change its financial arrangements. It would be at odds with the sustainability of a football club for there to be no home ground or location to train. It is therefore implicit that the regulator would address that.
Stephanie Peacock
Yes, I believe that there is provision in the Bill to do that. For those reasons, I ask my hon. Friend to withdraw the amendment.
Mr Betts
I beg to move amendment 83, in clause 46, page 39, line 2, at end insert—
“(ii) in the case of the home ground and training ground, it is satisfied that there are suitable plans in place to ensure the club’s continued long-term use of the home ground or training ground or to secure an alternative home ground or training ground for the next football season;
(iii) in the case of a home ground, it is satisfied that any alternative under sub-paragraph (ii) will have been actively approved by the club’s fans domiciled in England and Wales if any of the following non-exhaustive factors represent a significant upheaval of the connection between the fans of a club and the club: proximity to home ground, proximity to other clubs' grounds, journey time for fans and any other factors that the Regulator deems relevant;”
I have a simple question for the Minister. If the regulator decides that a sale can go ahead, is the power there to allow it to be satisfied that there are suitable plans to ensure that the club will have long-term use of a home ground and training ground? That may not be the ground it had before, but there must at least be a replacement. Does the regulator have the power to ensure that?
Stephanie Peacock
I thank my hon. Friend tabling the amendment. It seeks a number of things: extending the clause to include training grounds; guaranteeing long-term use of home grounds and/or training grounds; and introducing parameters for home ground relocation. If it is helpful, I will address those briefly, but I appreciate that this debate is similar to the one we just had.
On extending the scope of the clause to include training grounds, the Bill has carved out specific protections to safeguard home grounds against risky financial decisions or the sale of grounds. As I said in the previous debate, that is to reflect the home ground being the club’s most important asset. It does not mean that other assets, such as training grounds or office space, are not important.
I understand that, as we have discussed, the amendment is really focused on asset stripping. As I have alluded to—I will be a bit clearer and perhaps more explicit—the regulator has the power to attach discretionary licence conditions. Therefore, on the point about needing a training ground, I believe that the regulator could apply a temporary or particular licence condition on a club.
Stephanie Peacock
I am grateful to the hon. Gentleman for his comments. I draw his attention to the discretionary licensing addition that I have referred to: the regulator can react to different situations. I do not want to be drawn on individual cases, nor do I want to pre-empt the actions of the regulator.
Mr Betts
I really do not understand the way in which the Bill is written at present; perhaps the Minister can help me with that.
We will come on to clause 48, which is about the relocation of a club; of course, that means moving grounds. As set out in clause 48 4(c) and (d), there is a specific requirement on the club to consult with fans. We can have another discussion at some point—we may do—about consultation with which fans and which groups. I still think that this is a challenging issue that we need more clarity about.
Clause 46 is about the disposal of a ground, which is a very emotive subject for fans. It may not be the wrong decision to relocate, and clubs can relocate and take their fans with them, with proper involvement; the Everton example is probably in that category. However, there is no requirement at all to consult the fans on the potential sale of a ground. That seems to be a big omission in the Bill. Fans would not have a veto, because it is understood that sometimes there are very good commercial reasons as to why a club needs to move, which can be accepted and explained to the regulator.
Therefore, I am not saying that the disposal of a ground has to get the full approval of the fans, but surely there should be a measure whereby the fans are at least consulted and their views taken into account before the home ground of a club, where the club may have played for 100 years, is disposed of. That would not be inappropriate.
Stephanie Peacock
I thank my hon. Friend for tabling the amendments. Home grounds are a vital asset for all clubs, so I do understand his intent.
Regarding changes to the ownership of a home ground, the potential adverse outcomes are entirely financial. We do not believe that they impact the heritage of the club, which is why clause 46 does not require any heritage consideration or fan engagement. Additionally, decisions about the financial arrangements of a home ground are commercial decisions and therefore we do not think it is appropriate to legislate on them. However, I will reassure my hon. Friend that if the sale of a club’s home ground would result in the relocation of the club, fans absolutely have to be consulted about that, as per clause 48, which we will discuss later. We know how much home grounds matter to fans and communities, but this clause is purely about protecting a club’s financial position.
Mr Betts
Is the Minister saying, then, that a club owner could sell the ground without even consulting the fans—just present it as a fait accompli—and then, because there would not be a home ground to play on and the club might have to relocate, at that point they could say to the fans, “Well, the ground’s gone; we’re now going to ask you whether you want to move.”? There seems to be a gap in the thinking somewhere.
Stephanie Peacock
I appreciate that point, but the sale of home grounds is a primarily financial decision, separate from the decision about where the club actually plays its games. That is why there is currently no requirement to consult or obtain approval. If the club has not actually relocated, it would be caught in clause 48 and would be required to consult fans. We will come on to discuss that later.
Stephanie Peacock
I appreciate the comments that have been made, and I will take them away and reflect on them, but I ask my hon. Friend the Member for Sheffield South East at this point to withdraw his amendment.
Mr Betts
The Minister has taken a very sensible approach. I accept that accepting an amendment here and now, out of the blue, is not how Government operate; but there is a lack of consistency between the two clauses, so I appreciate her agreeing to go and have a look at them. She has not committed to a change, but she has agreed to have a look, and that is very helpful. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
As discussed during the debate on the previous amendments, clause 46 serves as an important protection for the home ground of a club. It requires clubs to gain the approval of the regulator prior to any sale or use of the home ground as collateral. A home ground is often one of the most vital and valuable assets a club can own. If it is used as collateral for debt or sold off, that can impact a club’s financial position by weakening the balance sheet. Not owning the stadium may also threaten a club’s long-term financial sustainability.
This clause requires clubs who own their ground to obtain the approval of the regulator prior to any sale or use as collateral. The regulator will consider the risk to the financial sustainability of the proposed transaction and block any potentially financially damaging sale of a club’s home ground. This applies to regulated clubs and also to any club regulated within the last five years, which prevents bad actors from being able to circumvent regulation by leaving regulated leagues in order to skirt protections and strip assets. It recognises the important role that football grounds play in the financial sustainability of clubs and adds protections against bad actors.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Clause 47
Duty not to appoint administrator without approval
Question proposed, That the clause stand part of the Bill.
Football Governance Bill [ Lords ] (Sixth sitting)
Debate between Clive Betts and Stephanie PeacockTuesday 10th June 2025
(3 weeks ago)
Public Bill CommitteesRead Full debate Football Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 10 June 2025 - (10 Jun 2025)
Stephanie Peacock
The schedule outlines the mandatory licence conditions that the regulator will attach to all licences as standard, regardless of the club’s circumstances. Those conditions are related to core areas of financial management, corporate governance, fan engagement, and reporting. They will form the foundations for the overall improved standards and sustainability of a club. Long-term financial sustainability is at the heart of the Bill, and is vital to making clubs more resilient to financial difficulties.
The financial plan condition requires clubs to present a plan that allows the regulator to understand the risk profile of the club and its plans for mitigating risks if necessary. That will include contingency planning and plans to wind a club back to a sustainable state if it faces unexpected financial difficulty. Those are not overly onerous requirements, but basic business planning that most well-run clubs will already be doing. It is anticipated that the regulator will help clubs update their plans if they exhibit unmanaged risk. If the updated plan still exhibits excessive risk, the regulator can place discretionary licence conditions on a club to help them meet the financial resources threshold requirement. That ensures that clubs can be ambitious but, equally, that failing to achieve those ambitions does not put the long-term financial sustainability of the club at risk.
A key tenet of a well-run business is good corporate governance, and the regulator will look to instil that into all licensed football clubs through the mandatory condition. Corporate governance standards in the industry need improving, with many clubs lacking even the most basic of good governance arrangements, such as a proper, functioning board. In consultation with the Football Association and other relevant stakeholders, the regulator will prepare and publish a code of practice about the corporate governance of regulated football clubs. Through that condition, licensed clubs will be required to submit a statement detailing how they are applying the code of practice. That will include what action they are taking to improve equality, diversity and inclusion.
Given the rich variety of clubs and fanbases, good supporter consultation will look different from one club to another. The fan engagement licence condition has been designed to reflect that, empowering the regulator to impose specific requirements on the form and frequency of supporter consultation where necessary. That mandatory licence condition works in tandem with the fan engagement threshold requirement, which is in schedule 4. The mandatory licence condition will be the minimum requirement for all clubs.
Stephanie Peacock
I will address some of my hon. Friend’s points, if he bears with me for a moment. If I do not, I will be very happy to give way.
All clubs must regularly consult a representative group of fans or a group elected by the club’s fans to represent them on the relevant matters listed in the Bill. The regulator can specify that the group is formed via fan elections—an additional measure the Government added to ensure the fan group can be independent from the club. The threshold requirement in schedule 4 then empowers the regulator to go further on fan engagement, if needed. It allows the regulator to impose discretionary licence conditions on clubs relating to fan consultation. There are several types of fan engagement that could be used to meet that requirement. No one way has been specified on the face of the Bill in order to allow for a bespoke approach to be taken at each club. We expect, however, that we would likely look to utilise existing structures where appropriate. Those would likely be organisations such as supporters’ trusts or fan advisory boards, which are often key independent fan bodies.
To address the points made by my hon. Friend the Member for Sheffield South East, for the most part, individual clubs will be in the best position to understand the demographics of their fans. The regulator will be able to provide guidance for clubs on how best to consult fans, which will include how to approach consulting across a widespread fan base. It is, however, vital that they engage with a representative group of fans, and therefore, if a section of the fan base has not been engaged with, the regulator has the ability to specify the club should meet with them. That will ensure that clubs have an appropriate framework in place that allows them to meet regularly and consult the group on key strategic matters and supporter interest.
Clubs in the lower leagues will tend to have more a more local fan base, whereas larger clubs will tend to have fans from across the world. That diversity is part of the reason why the English football pyramid is so special. It is also why we want to implement proportional and flexible proposals that work for clubs across the pyramid. The regulator will implement a minimum requirement for fan engagement, which the regular fan consultations will be a significant part of, alongside protections for club heritage. I hope that answers my hon. Friend the Member for Sheffield South East. I am happy to give way if not, or he can contribute to the debate.
Stephanie Peacock
Perfect. The annual declaration condition requires a club to submit an annual declaration to the regulator, which sets out all the notifications that the club has made, or should have made, to the regulator in the preceding 12 months. Broadly speaking, these notifications relate to changes in the circumstances affecting the club that the regulator needs to know about to regulate effectively. That includes any non-compliance related to the club. A club will also have to issue a statement even if there are not any matters to notify the regulator about. That will create a formal touchpoint each year in lieu of any licence renewal; the emphasis will be on clubs to declare all relevant changes in circumstances and compliance against which they can then be held accountable.
Mr Betts
It is a pleasure to have you back in the Chair, Mr Turner. The Minister is doing all she can to deal with situations that will apply to most clubs. The problem is those owners that do not want to engage. They will try to avoid this responsibility because they see it as an infringement of their right to run their club in the way they want.
I have to come back to Sheffield Wednesday because Mr Chansiri has a track record on this. He set up an engagement panel with fans, but he invited the fan groups he wanted to invite. Worse than that, once someone goes into a meeting with him, they have to sign a statement to say that they will not divulge any of the things that happen in that meeting. It is a closed shop.
I sat down with a myriad of different groups including the supporters’ trust, which is the biggest fan group by a long way, and several other groups, including the women’s group and the 1867 group. We formed an umbrella group to try to bring all the fan groups together. The club spoke to the groups and said, “If you get involved in the umbrella group, you will not be allowed on the engagement panel.” It is either/or because that is seen as an attack on the club and the chairman. You could not make it up—well, you can make it up, because we can see how the club is run. That is the problem.
How do we get around that situation? I was told the other day, “The chairman engages with fans. He has actually had two meetings of five hours each with fans.” But he does not answer any questions. When I asked one of the officers at the club why he will not answer questions, they said, “Well, they wanted to know what his business plan was.” It is not a bad question to ask, and that is exactly what the regulator is going to have the powers to do.
I am still not absolutely certain on what happens when the club tries to control the situation. Does the regulator then arbitrate? Does the regulator come in and say what they think good fan engagement looks like? It would be very helpful if the Football Supporters’ Association were to be given some role in that, because it understands fan engagement and fan involvement better than anyone. It knows what happens on the ground, it knows the tricks that the clubs pull and it knows how genuine fan engagement can be developed and implemented. I am not sure a new regulator will necessarily have all that intrinsic knowledge about what happens at clubs. Some role for the FSA in this would be helpful. In particular, it would help when problems arise of the sort that I have just explained.
I am sure Sheffield Wednesday are not the only club where owners do not really want fans around—they just want them to turn up, pay their money and go away. The Chair probably cannot get involved in the debate, but I can see you nodding, Mr Turner, because I am aware that there have been a few problems at Hull in that regard in the past. I ask that the Minister provide a bit more of an explanation and flesh this out further. In particular, sub-paragraph 8(2) reads:
“So far as the condition requires consultation with persons within sub-paragraph (1)(a), the condition may require the club to constitute a group of such persons”.
I know immediately how some clubs will constitute that group, and it will not be proper fan consultation.
Stephanie Peacock
I am grateful to my hon. Friend for his contribution. We would obviously expect the regulator to build on relevant expertise internally and via consultation. I have worked with and met representatives of the FSA a number of times. I pay tribute to the work they do, and I am sure that is the sort of group that the regulator will very much draw on.
My hon. Friend will completely understand why I am slightly reluctant to comment on live examples. That does not mean that I am not sympathetic to the points he makes on behalf of his constituents. I draw his attention to my remarks about how, if a section of the fanbase is not being engaged with, the regulator has the ability to require a meeting with the club. Where an owner or a club are not engaging, or not engaging effectively, the regulator will be able to intervene.
Mr Betts
It is helpful of the Minister to have elaborated on that. Would she go a bit further and say whether she anticipates that the regulator will engage with the Football Supporters’ Association when difficulties arise and there needs to be an independent look at fan engagement with a club?
Stephanie Peacock
It is important for sustainability that incumbent owners and officers continue to be suitable custodians of their clubs. That is why the Bill gives the regulator the power to test incumbents if it has grounds for concern about their suitability. That will help mitigate the risk of harm from individuals already in the system.
Clause 33 places a duty on incumbent owners and officers, as well as regulated clubs, to notify the regulator where they consider there to have been a relevant material change in circumstance. Notably, this is a change of circumstances that could have an impact on whether the regulator would find the individual suitable to be an owner or officer of the particular club—for example, if an officer became subject to criminal or relevant civil proceedings that the regulator was not previously aware of, or if an owner’s source of wealth had changed in some way that is relevant to whether it is connected to serious criminality.
The notification must explain the material change in circumstances and its relevance to an individual’s suitability. If this information gives the regulator grounds for concern about the incumbent’s suitability, it has the power to test them under clauses 34 or 35. Ensuring that the regulator is aware of relevant material changes will better enable it to ensure that incumbent owners and officers continue to be suitable.
Clause 34 provides the regulator with the necessary powers to test incumbent owners already in place in clubs where there is concern about their suitability. This allows the regulator to tackle any risks to clubs from unsuitable owners already within the industry.
Mr Betts
I just want to be clear about the grounds on which the regulator can investigate or intervene. We talked about the source of wealth being criminal, which has been clearly laid out. However, if the source of wealth is one that has diminished substantially, so the owner cannot now show that they can continue to run the club, is that a reason for the regulator to consider intervening?
Stephanie Peacock
There are different thresholds for new owners and incumbent owners; with new owners, it is grounds for suspecting, but with incumbent owners, it is the balance of probabilities. Of course, the latter is a higher bar, given the existing owner’s property rights. I do not know whether that fully answers my hon. Friend’s question, but I can write to him with some further detail.
Mr Betts
It would be helpful if the Minister could write to me because this is a big question in football. There are owners who promise the world and then find that they cannot deliver it; indeed, they can deliver very little. I come back to Sheffield Wednesday, but there have been other owners, such as Ken Bates at Oldham, who set up a structure that could not then be financially maintained. It is important to understand whether the regulator has power in that circumstance to intervene.
Stephanie Peacock
Absolutely, and I refer back to some of our earlier conversations. If we take the regulatory regime as a whole, at the very basic level, owners need to have a business plan, consult their fans and be fit and proper—those three things work together. As we spoke about earlier, if the business plan does not match the source or amount of funds, the regulator can go back and direct them. Perhaps that provides a little more clarity, but I am very happy to add more detail.
Mr Betts
I think the Minister and I are getting there. Obviously, the business plan and the source of funds come with a new owner and then continue. However, with an owner already in place, does that still apply? Can the regulator say, “Wait a minute. I need to see a business plan and a source of funds to ensure that you are a fit and proper person”?
Stephanie Peacock
In certain circumstances. I am hesitant to use the word “new” information, because the information may not be new. However, if relevant information comes to light for the regulator, which may be new or pre-existing but relevant, the regulator can look at it. I draw my hon. Friend’s attention to the difference in the threshold between new owners and existing owners.
Mr Betts
I will make just one more point—I think it is important that we understand precisely what this means. Clause 33 talks about an owner or club having a responsibility to notify the regulator. Surely that does not mean that nobody else could notify the regulator, if relevant information came to them. Could they then pass it on for the regulator to look at?
Stephanie Peacock
Yes, absolutely. That goes back to the discussion that we had earlier on new clause 15. The regulator will take credible information seriously.
Clause 34 provides the regulator with the necessary powers to test incumbent owners—those already in place—of clubs, where there is a concern about their suitability. It will allow the regulator to tackle any risk to clubs from unsuitable owners within the industry, while recognising that there are suitable owners already in the system who do not need to be tested. We want to ensure that the approach is not overly burdensome for the regulator, and we do not want to deter investment in the game. Incumbent owners can be assessed to ensure that they have the requisite honesty and integrity, and are financially sound enough, to own a club. If the regulator has information that gives it grounds for suspicion, incumbent owners can also be tested on their source of wealth. The regulator will need to establish if wealth is connected to serious criminal conduct, including crimes such as drug trafficking or fraud. The regulator will not remove incumbent owners because of a mere suspicion about their source of wealth. Rather, an incumbent owner must be treated as unsuitable if the regulator is more sure than not that their source of wealth is connected to serious criminal conduct. The clause will ensure that the regulator has the appropriate powers to test incumbent owners where a risk of harm arises.
Clause 35 provides the regulator with the necessary powers to test incumbent officers—those already in place—of clubs, where a risk of harm arises. As with the provisions for owners in clause 34, testing of officers is limited to cases where there is concern about suitability. It allows the regulator to tackle any risks to clubs from unsuitable officers already in the industry. Incumbent officers can be tested to ensure that they have the requisite honesty, integrity, competence, and are financially sound enough, to continue in their role.
The Government are aware that finding an incumbent owner or officer unsuitable would bring about significant consequences for that person, and may cause concern for clubs or fans. That is why, when the regulator is minded to fail an incumbent owner or officer, clause 36 gives the individual and the club concerned an opportunity to make representations before the regulator makes its final decision. That allows an officer or owner an appropriate opportunity to argue their case before the regulator finds them unsuitable. The regulator has the ability to test or re-test incumbent owners and officers, which will prevent unsuitable custodians from harming clubs over the long term, not just at the point of entry. That will help to ensure the sustainability of clubs over the long term, benefiting football now and into the future. I therefore commend the clause to the Committee.
Football Governance Bill [ Lords ] (Fifth sitting)
Debate between Clive Betts and Stephanie PeacockTuesday 10th June 2025
(3 weeks ago)
Public Bill CommitteesRead Full debate Football Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 10 June 2025 - (10 Jun 2025)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to once again serve under your chairship, Sir Jeremy. I look forward to day three of Committee. I thank my hon. Friend the Member for Sheffield South East for the amendments; I am never fed up of hearing from him and I know he is very passionate about this issue.
The Government recognise the intent behind the amendments to ensure that football continues to be played at a club’s home ground. The Bill already has a number of strong protections to safeguard home grounds against reckless sales or ill-thought-out relocations. I will respond to a couple of points made in the debate and will then outline why we will not be accepting the amendments.
Fan consultation was mentioned. Clubs must consult their fans on any plans to change or move their home ground as per the fan engagement threshold condition. The shadow Minister, the hon. Member for Old Bexley and Sidcup, made an important point about how it will sometimes be necessary for clubs to relocate their home ground, for a number of reasons, such as the ground being too small, facilities no longer working or the ground being sold. We recognise that we need flexibility in that approach, but fans will have a say.
For clubs that do not own their stadium or have already sold the stadium, due to the scope of the Bill and existing property law, it is not always possible for home grounds that are not owned by the club to have the same protections as home grounds that are. This point was recognised in the fan-led review. However, alongside the fan engagement requirements, there are also protections under the national planning policy framework for sports grounds and existing assets of community value, and there is work under this Government, as well as an ongoing Law Commission review of security of tenure that has the scope to address sports grounds. Those powers will all work alongside the soft powers and levers of the regulator to look to protect home grounds, as far as possible.
My hon. Friend the Member for Sheffield South East also referred to the fact that leagues have requirements for tenure, and clubs are prevented from entering the league if they do not meet them. Leagues also have enforceable standards regarding the quality of the grounds. These vary from league to league and can get into the specifics of grass length on matchdays, for example. Given those requirements, we do not feel it is necessary for the regulator to duplicate rules. Instead, it will work alongside the leagues.
It should be noted that clubs may not own their home grounds—I have responded on that point—and therefore they would require the agreement of their landlord to meet the additional licensing requirement we believe that the amendments would lead to. These amendments would place a requirement on clubs to guarantee something that may not be within their control, as well as duplicating pre-existing league requirements for home grounds.
We recognise that the fan-led review recommended that the Government explore the viability of introducing security of tenure property rights for football clubs. I hope I have explained why we do not feel we can do that.
The Law Commission is now in the process of reviewing the Landlord and Tenant Act 1954, including an assessment of security of tenure for all commercial properties, including football clubs. Following the review, the Ministry of Housing, Communities and Local Government will consider the recommendations and publish a full response.
For those reasons, I am not able to accept my hon. Friend’s amendments and would ask that he withdraws them.
Mr Betts
I am still not quite sure why my amendments would cause so many problems. I understand the difficulty where a club does not actually own the ground but leases it, but the amendment is about security of tenure. There does not have to be ownership; it could be a secure lease, as the English Football League requires, for a 20-year period. That is implied by the amendment.
I was not quite sure what the Minister was saying about how the review by the Law Commission and implementation by MHCLG Ministers would secure the position for football clubs, and what else is being looked at in terms of the planning framework. Is she able to say any more on those points to get on the record what further safeguards might be in place?
Stephanie Peacock
On the point in the amendments about 20 years, we appreciate that not all the leagues go that far, but we think that the point is addressed by the league rules. On the consultation by MHCLG, it might be helpful if I ask my counterpart there to write to my hon. Friend and to share that letter with the Committee, because that ongoing work falls in that Department.
Mr Betts
The Minister often completely convinces me—on this occasion, she goes a little way towards being convincing. I want to read what MHCLG is going to say. In the end, it is not how we do it, but what we achieve in terms of the safety and security of grounds for the fans. That is what this is about. If what MHCLG is going to do moves us in that direction, as the Minister indicates it will, I am happy to await that correspondence from it before pushing this further. I hope that we can get a response from MHCLG Ministers before Report—if the Minister could encourage them to write in that time period, it would be helpful.
Stephanie Peacock
It is a disappointment that I am not able to convince my hon. Friend fully. Not all of what he asks is in my gift, but I commit to the Committee that I will do my very best to get a response from the Department before Report, and if possible earlier.
Mr Betts
On a general point, when we talk about fans and fan groups, who defines who they are and the relevant ones? That is a really important point. Coming back to our club, Sheffield Wednesday, we have more than 20 different fan groups. That is also true of other clubs. Talk to the EFL, because it often struggles to engage or know who actually represents fans, as opposed to two or three people who have got together to name themselves as a group. How are we going to deal with that? As fans become an integral part of the process, who decides who the relevant groups are?
Stephanie Peacock
I appreciate that point. We will come on to discuss that in relation to schedule 5, and I will give a fuller response then.
Question put and agreed to.
Schedule 4 accordingly agreed to.
Clause 19
revocation and cessation of operating licence
Stephanie Peacock
I appreciate the shadow Minister’s comments. I will address them in detail when we come to the relevant debate.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Schedule 5
Mandatory Licence Conditions
Mr Betts
They would, and therefore the club disappears. No one wants to see that. The whole purpose of the Bill is to stop clubs disappearing, to stop what happened to Bury, and so there is a gap in the legislation, because what happens in that situation? It nearly happened at Reading—the club nearly disappeared, but in the end it was a last-minute sale. If the owner had not sold it at the last minute, however, the EFL has no powers to deal with it, and the regulator will not either. The regulator has the power to say: “You shouldn’t be owning the club. You shouldn’t have a licence to operate the club, because of what you have done, you haven’t got the funds, your source of funds is inappropriate”—all those things—but then what happens?
I am saying to the Minister that the whole intention of the Bill is to ensure that the clubs that fans have supported for years, for generations—for communities, it is their club—do not disappear, go out of business or lose their place in the competition they are playing in. Clubs might get relegated, that is fine, but they should not lose their place because they have an owner who is not fit and proper, and does not meet the test. We have to find way of dealing with this, which the Bill does not do as drafted.
Stephanie Peacock
I thank my hon. Friend for moving the amendment and tabling amendment 8. To be the owner of a football club is to be the custodian of a treasured and historic community asset. That should be an honour, but it also comes with great responsibility. We recognise that in the past, however, it has typically been the actions of unsuitable custodians that have put our historic clubs at risk of collapse. It is vital that the regulator has the necessary powers to protect clubs and their fans from such owners. We therefore completely recognise the intent behind the amendments—to ensure that the regulator has the necessary enforcement mechanisms to back up its regime and guarantee protection from unsuitable owners.
I reassure my hon. Friend that the Bill already suitably achieves that. The regulator already has the power to require a club to make constitutional changes if the regulator considers that that is an appropriate way to secure an unsuitable owner’s removal. It has a range of strong powers to enforce against any non-compliance. The powers include the imposition of sanctions, such as financial penalties, all the way up to forcing divestment, which would force an owner to divest their stake in the club at no minimum price, directing them to take no part in the running of the club in the meantime. If necessary, the regulator can appoint an interim officer to assist the club operating effectively in the owner’s absence.
To respond to the point made by the hon. Member for Spelthorne in an intervention—a point made by my hon. Friend the Member for Sheffield South East a number of times—that ability to isolate and remove unsuitable owners and officers should mean that a club never has to have its licence suspended or revoked. A clubs’ fans should therefore not have to suffer the consequences of bad leadership. To be clear, because the licence is separate from the owner, the removal of an owner will not impact the club’s licensed status. We will come on shortly to discuss owners and directors, so I shall reflect on my hon. Friend’s comments ahead of that debate. I hope to provide him with reassurance, but we will not support his amendment.
Stephanie Peacock
I am saying that the regulator may—I am not saying definitely will, because I do not want to get into hypotheticals of what it will do or not—appoint an interim officer to assist a club to operate effectively in the owner’s absence. To be clear, the club’s licence is separate from its owner, so the removal of the owner does not impact the club’s licensed status.
Mr Betts
In further debate, we will come back to the issues of owners and directors, to which the Minister referred. As I said at the beginning, this was an exploratory amendment for discussion of the whole issue, which is important, but with her reassurance. at this point I will not press the amendments to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Betts
Assets of community value have been looked at in a number of different ways over time. Some clubs are already in this situation because their fans have moved to do this. That is true at Sheffield Wednesday, where fans moved some time ago to have the ground designated as an asset of community value. It does not provide a complete safeguard against an owner, who wants to cause mischief and upset for fans and the club, transferring the ground for another purpose, but it provides more of a safeguard than simply having it as a ground without any particular protection, as is currently the case.
The Minister referred to what the MHCLG might be doing in this area on the rules around planning. Is she prepared to look at using assets of community value to give further protection and to comfort fans that football grounds hold a different status to other assets that owners, from time to time, might want to change for another purpose?
Stephanie Peacock
I thank my hon. Friend for tabling the amendments. I know we have discussed this issue a number of times; it has always been a pleasure to do so, and I recognise its importance. Home grounds are often the most important asset that a club owns, so that is why I want to thank my hon. Friend for placing a real focus on them.
The significant financial and heritage value that grounds hold is why the Bill has strong protections to prevent home grounds being sold, used as collateral or relocated without the necessary considerations. Asset of community value status is another mechanism that a number of clubs and supporter groups have obtained for their home grounds. We would expect the regulator to welcome any club that wishes to gain community value status for an asset as another way to protect their home ground.
However, we are confident that the legislation will provide the necessary protections to address fan concerns and keep these important assets protected without mandating this status. Additionally, while assets of community value have proven beneficial for many clubs where no other protections have been in place, these amendments may place an unnecessary burden on clubs. As currently drafted, they would require clubs to either go through what can be a lengthy process with the relevant authority or make structural changes to the constitutional document of a club. Given that significant protections are already in place in the Bill that deliver the necessary safeguards, it is difficult to justify any additional measures for all regulated clubs, especially as a mandatory licence condition.
I really want to reassure my hon. Friend, as I know that home ground protections are of particular importance to him, that the Government have already committed to asset of community value reform in our manifesto, and this is something that the recent English devolution White Paper from the Ministry of Housing, Communities and Local Government commits to.
Stephanie Peacock
I am saying that I am confident the legislation will provide the necessary protections to address fan concerns, but I also draw the Committee’s attention to the work of the Ministry of Housing, Communities and Local Government on the specific issue of assets of community value. Of course, that does not fall into my portfolio, but I am very happy to commit to speaking to my relevant counterpart and adding to the letter that I have earlier committed to writing. This is something that I am sympathetic to, but I do not have the ability to make that commitment today. I believe that the work the Ministry is doing is very interesting and relevant to what we are discussing. For that reason, I am unable to accept my hon. Friend’s amendment, and I ask that he withdraws it.
Mr Betts
I thank the Minister for that reply; it is helpful in moving the discussion in the right direction. I appreciate that she cannot commit on behalf of another Department and other Ministers, but she has indicated that work is going on in this area. Again, it would be helpful if she could encourage her colleagues in the MHCLG to come forward with that further information before we get to Report. If they are going to write to us about the other issue, they could write to us about this as well. It would be extremely helpful if that could be done, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Football Governance Bill [Lords] (Fourth sitting)
Debate between Clive Betts and Stephanie PeacockThursday 5th June 2025
(3 weeks, 5 days ago)
Public Bill CommitteesRead Full debate Football Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 5 June 2025 - (5 Jun 2025)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to see you in the Chair and to serve under your chairship this afternoon, Ms Butler. I thank my hon. Friend for his amendment.
The state of the game report will be a key study into the structure and dynamics of the industry. It will help to build an evidence base to inform the regulator’s approach and decision making. I therefore recognise the intent behind my hon. Friend’s well-meaning amendments.
The state of the game report needs to be produced promptly, but it also needs to be a robust study. The timeframes set out in the Bill balance the importance of a timely first report with giving the regulator time to undertake the necessary in-depth analysis. The regulator will need to publish its first report as soon as possible or, as my hon. Friend outlined, within 18 months of the competitions in scope of regulation being specified by the Secretary of State, as an absolute maximum. For subsequent reports, a maximum of five years between publications will encourage the regulator to take a more long-term look. That should minimise unnecessary burdens on the industry and better align with the timelines for existing industry processes, such as commercial agreements. The regulator will still have the discretion—as my hon. Friend anticipated—to publish subsequent reports sooner if it considers it appropriate to do so.
I cannot accept my hon. Friend’s amendments to reduce the timings further. He asked me to go away and reflect on them, but I do not want to give him any false hope. We have put careful consideration into the time limits, which were changed from the previous Bill. They are an absolute maximum. We have had a number of conversations with the various leagues and stakeholders, and we are confident that they are the right time limits. We have made it clear that the regulator has the power and discretion to publish sooner, and we would very much hope that that would be the case for the first report in particular. For those reasons, I cannot accept his amendments.
Mr Betts
I will not press the amendments to a vote, but I want to encourage the Minister on this point. As she said, the regulator can come back to the state of the game report before five years. In doing so, would the regulator be encouraged to take account of any views or concerns from the leagues and clubs that are being regulated, and from fans’ groups? If there was a real concern that things were changing fundamentally, would the regulator be encouraged to come back and reflect on whether a state of the game report should be done more quickly?
Stephanie Peacock
Yes, absolutely. We have talked about light-touch regulation throughout the Bill. The regulator has the ability to go sooner, in both its first report and subsequent ones, so we hope that there will be ongoing conversations with all the affected parties. If something happens, the regulator has that power and we would expect it to react. That is why we are not being prescriptive.
Mr Betts
Briefly, I think we are going back to a very similar discussion to the one that we have just had, but would the Minister expect—without this going on the face of the Bill—the regulator to consult fans, in particular the Football Supporters’ Association? It has done a brilliant job. It was party to the fan-led Crouch review, and it has provided a great deal of assistance in framing this legislation. I hope that the association would be seen as part of the consultation process when the regulator comes to do that.
Stephanie Peacock
The state of the game report is expected to be a key piece of work that the regulator produces on the basis of extensive research and consultation. The Bill sets out a few parameters. What is included in the state of the game report, and therefore who is relevant to consult, are up to the regulator’s discretion, as the expert, allowing the report to evolve over time. The Bill therefore does not set out an exhaustive list of who to consult, and nor would we want it to.
Throughout the Bill, however, and especially where it states that the regulator should consult other relevant persons, we expect that those affected by the decisions of the regulator, such as fans, players and representative groups, would be included when appropriate. To answer the point made by the hon. Member for Sheffield South East directly, we absolutely would expect those groups to be taken into consideration. That is made clear in the regulatory principle set out in clause 8.
Stephanie Peacock
The clause introduces the licensing system. One of the regulator’s main responsibilities will be to operate a licensing system for football clubs through which the majority of its regulation will be delivered. If clubs do not have an operating licence, they will not be allowed to play. The licensing regime will cover all football clubs that have a team playing in any of the competitions specified by the Secretary of State in regulations—that is intended to be the top five leagues. The clause will require football clubs to have a licence to lawfully operate a team in any of the specified competitions.
The clause sets out the requirement for clubs to have a provisional or full operating licence, along with the regulator’s power to grant licences subject to clubs passing the relevant tests set out in the subsequent clauses. The licence will enable the regulator to regulate clubs through licence conditions set out later in the Bill. That will enable proportionate regulation tailored to clubs, rather than a one-size-fits-all approach. An operating licence will specify which clubs the licence relates to, the team the club is operating and any conditions attached to the licence.
Let me set out how, broadly speaking, the licensing regime will work. The duties in part 5 will apply to regulated and formerly regulated clubs within the licensing regime, and will cover clubs that have been in scope within the previous 10 years, to prevent circumvention. We will debate that later in Committee. For a club to gain a provisional operating licence, the independent football regulator must be satisfied that the club operates a relevant team and will comply with the mandatory conditions and the free-standing duties. The independent football regulator need only be satisfied that the club will comply with the mandatory conditions; it will not need to comply at the time of the provisional licence test. A provisional licence can be issued for a maximum of three years, but the time can be shorter if the regulator determines that. The regulator can use discretionary licence conditions to bring a club’s standard up to the necessary threshold requirement level.
Let me set out the test for a full operating licence. The independent football regulator must be satisfied that a club meets the threshold requirements and will continue to comply with the mandatory conditions and with the free-standing duties, and the regulator must not have determined that a current owner or officer is unsuitable. We will, of course, go into further details on these matters as we move through the licensing regime, so I will not do so now. I commend the clause to the Committee.
Mr Betts
With new clause 2, tabled in my name, we come back to the other key issue in the Bill, aside from distribution: how clubs operate, how owners have in some cases badly operated them in the past, and how we can do more to help to control such situations. The issue of operating licences is, then, absolutely key.
Before anyone gets too worried, I should say that I have not been collaborating with the Lib Dems, although their new clause is very similar. Perhaps we have both been talking to Fair Game, an excellent organisation that has been trying to work with clubs and fans to improve the regulation and operation of football clubs.
The simple aim of new clause 2 is to ensure that the regulator provides help when it is needed. Premier League clubs are not going to need help and Championship clubs should not need help. The EFL says that clubs in Leagues One and Two are already required, under the EFL’s regulations, to provide the vast majority of the information that the regulator will need anyway, so they are doing so as a matter of course. The new clause would probably apply only to some National League clubs. The support may not be financial support; in some ways, for the relevant clubs, training and supporting staff is the key issue. There may not be anyone in the club with a working knowledge of some of the complications and the legalities of the legislation so, to avoid the club getting into difficulties, the new clause would require the regulator, in those circumstances, to help those clubs, in a reasonable and proportionate way, with the requirements of the licence conditions.
Stephanie Peacock
That is a really good question. The regulator can engage with clubs outside of scope, such as those in the National League North and South, to assist with the application process. I hope that answer gives clarity. It is a very good question from the hon. Gentleman. However, for the reasons that I have set out, I am unable to accept the new clauses, and I hope that they will be withdrawn or not pressed.
Football Governance Bill [ Lords ] (Third sitting)
Debate between Clive Betts and Stephanie PeacockThursday 5th June 2025
(3 weeks, 5 days ago)
Public Bill CommitteesRead Full debate Football Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 5 June 2025 - (5 Jun 2025)
Stephanie Peacock
I am grateful to the shadow Minister for those questions, which somewhat rehearse the previous debate on the staffing of the shadow regulator. He should have received an answer to the written question, and we spoke about this last time; as of 1 June, it has 42 staff. I cannot comment on exactly how many staff there will be at the point of Royal Assent. In my remarks, I said that upon the creation of the regulator, property rights, liabilities and staff will be transferred. I am happy at that point to write to the shadow Minister, but I will not speculate now.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Schedule 3 agreed to.
Clause 10
State of the game report
Mr Betts
I beg to move amendment 2, in clause 10, page 7, line 6, at end insert—
“(d) an assessment of any existing and effective financial distribution agreement against the principles set out in section 62(2);”
This amendment would require the state of the game report to make an assessment of any existing and effective financial distribution agreement against the principles set out in distribution orders for the resolution process.
It is a pleasure to serve under your chairmanship, Mr Turner. We are finally starting to get on to the football issues in the Bill. The state of the game report is obviously a key element. It will shape how the regulator operates, and eventually, the financial distribution, which we will come to later in the Bill. So the report is really important.
Amendment 2, without undermining what is already in the Bill in any way, simply ensures that the financial distribution as it exists, and as it might exist according to the principles laid out in further clauses of the Bill, is taken into account when developing the state of the game report. It brings a symmetry to the whole process, so that the state of the game report looks at the financial distribution, and when we come to the financial distribution, it goes back to look at the state of the game report. It is a simple amendment that makes the Bill coherent as a whole. I hope that the Minister might at least consider it when looking at how the Bill might be improved.
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East for the amendment. I understand its aims. We do not consider it necessary, as we are confident that the Bill already covers the issue. Per clause 10, the regulator will be obliged to look into the main issues affecting English football and any features of the market that risk jeopardising its objectives. If the existing distribution arrangement meets either of those criteria, the regulator will cover it in the state of the game report. I reassure my hon. Friend that the regulator has the ability to address distributions in the sector if the current scenario reaches a threshold, and we will discuss those powers when we get to part 6.
In general, we have not taken the approach of being overly prescriptive and listing every issue the regulator could and should look at here in the Bill.
Mr Betts
I am trying to work out what the Minister is saying. Is she saying that the amendment is unnecessary, because in the state of the game report as laid down already in the Bill, the regulator can do precisely that—look at the distribution within football? There were some other words added then about what might be a restraint on the regulator’s ability to do that. Is the regulator completely free to look at the distribution of resources and revenue within football as it stands?
Stephanie Peacock
Yes, the regulator has the ability to address distribution in the sector if the current scenario reaches the threshold. We will come on to discuss that in part 6. I was going to say that, in general, we have not taken the approach of being too prescriptive and listing every issue in the Bill that the regulator could and should look at, as that would be contrary to the light-touch regulator that we have discussed throughout the Committee’s proceedings. I can be very clear in answering my hon. Friend’s question: it has the ability as it stands, and we will discuss that point further in part 6. I hope that he will withdraw the amendment for those reasons.
Mr Betts
I think I am reassured by what the Minister is saying. It is obviously quite a complicated area, and it links in to what comes later in the Bill. Maybe we can pursue this later. I want to be certain that the regulator has these powers, because I believe that much of the concern among football fans is around the current distribution of revenue, and we must ensure that when we have finished with the Bill, it sorts that problem out. At this stage I will not pursue this to a vote, but we will have discussions about distribution in due course. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Football Governance Bill (Sixth sitting)
Debate between Clive Betts and Stephanie PeacockTuesday 21st May 2024
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Football Governance Bill 2023-24 View all Football Governance Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 May 2024 - (21 May 2024)
Mr Betts
Amendment 21 is quite simple, and I am sure that the Minister can accept it without much consideration. It simply applies where a team is prevented from going into a prohibited competition, which I think is absolutely right. The outrage of the European Super League in some ways triggered recognition of the issue and the need to regulate football more appropriately. There are consequences for people who make their living from football, whether they are players or staff members of clubs.
Ben Wright from the PFA very appropriately spelt out the fact that the Bill quite rightly, in many cases, highlights the need to consult and involve fans, but players are not mentioned anywhere. As Ben Wright said, there are only two groups of people who really matter in football:
“those who play it and those who watch it.”––[Official Report, Football Governance Public Bill Committee, 16 May 2024; c. 88, Q145.]
Without those two groups, football would not exist. I hope the Minister thinks about the amendment and comes to the conclusion that he could accept it without undermining the Bill in any way. I hope he might give careful consideration to that.
I am also happy to support amendment 13, which was tabled by my hon. Friend the Member for Barnsley East. It is very much along the same lines as my amendment, and the Minister might rather choose her wording if he cannot support the wording that I have put forward. I hope the Minister will reflect carefully on the amendments.
On amendment 22, having
“the full impacts of such a decision”
taken into account seems a fairly obvious thing. The Minister will no doubt tell us that that is the intention of the Bill and that there is no need to add in the extra words, but I am sure he will agree that the extra words are not in any way in conflict with what the Bill is trying to achieve.
Stephanie Peacock
I am pleased that we are making good progress in moving on to discuss part 5 of the Bill and the free-standing duties on clubs, which apply to clubs separately to the licence conditions. They are set out by the Bill directly and, in many cases, apply to a club regardless of whether it is licensed.
Clause 45 sets out the duty not to operate within a prohibited competition. I will briefly set out some context before discussing amendments 21, 22 and 13. The clause is clearly designed to prevent a repeat of the European Super League, which rightly prompted immense backlash from fans, clubs and governance structures throughout the English football pyramid when it was first announced over three years ago.
There were many reasons why the project sparked such outrage, and it is important to name a few directly. First, the European Super League was designed, at least to some extent, to be a closed competition. For many of the richest clubs, qualification would have been an automatic right, rather than being meritocratic. It would have taken an axe to one of the most important features of football’s success: the idea that any one team can dream big and become a winner. With qualification based on merit taken out of the equation, the entire structure, purpose and sustainability of football’s existing competitions would have been undermined.
Secondly, the European Super League was launched—
Stephanie Peacock
Football stadiums have immense value. First, they have value to fans, who have precious memories going back generations of standing in the same spot watching their club through the lowest lows and highest highs. In many ways, a stadium is one of the strongest ties a club has to the local community. A club’s staff, players and owners might change, but the pitch remains.
Secondly, grounds also have a financial and fundamental value. They are often among the club’s most valuable assets. In well-run clubs, that is positive, but where a club is already financially unstable, home grounds can become vulnerable to sale in a way that seriously undermines the club in the long term. In some cases, they are sold in a desperate attempt to make a return on losses, and in others they are sold by those purposefully wishing to strip a club of its assets before leaving it behind to collapse. Indeed, there are numerous examples of clubs in financial trouble selling their stadiums to give owners some collateral on their investments or to circumvent profit and sustainability rules. Troubled Sheffield Wednesday sold Hillsborough to its owner for a profit of more than £38 million, covering its pre-tax losses of £35 million. Both Reading and Derby sold their grounds in a similar fashion. But a stadium can be sold only once, and without a stadium in their possession, clubs risk not being able to play at all.
We are familiar with the story of Wimbledon FC, whose home was forcibly moved to Milton Keynes in 2003, resulting in the club being renamed. Finances aside, that decision was devastating for local fans, who felt their club had been stolen from them and their community, as we heard in the evidence session. Given that the regulator is a body specifically established to both ensure the financial sustainability and protect the heritage of English football, it is right that it should have a responsibility to ensure that stadium sales do not undermine a club’s future.
There are of course many circumstances in which a club’s selling its stadium and relocating is a sign of progress and positive investment. Tottenham fans, for example, are now enjoying the benefits of a brand-new state-of-the-art ground, while the club is widely considered one of the best in the country. That kind of investment should in no way be discouraged, let alone blocked. The regulator must therefore be equipped to tell the difference between two very different kinds of proposed transactions—those that propel a club forward and those that seriously undermine a club’s long-term financial sustainability or heritage.
With the expertise the regulator will have, I understand why the Government have decided that it is best placed to grant approval on stadium sales and moves. However, I also acknowledge the concern that the FSA and many fans have about their lack of voice in the decision-making processes in both clause 46 and clause 48.
Amendments 3 and 29, tabled by my hon. Friends the Members for Liverpool, West Derby and for Sheffield South East, give us the opportunity to discuss the role that fans might play in understanding what a stadium change might mean in terms of the fans, heritage and local community. It is of course the fans who will suffer if their team no longer has anywhere to play, and it is fans who best understand the precious heritage and memory that grounds carry for them and their community.
Clause 48 seems to be based on an understanding of that point to some extent, given that the regulator is explicitly tasked with paying attention to whether a relocation of home games would cause “significant harm” to the heritage. However, as Fair Game points out, it would be curious if the regulator were able to understand the implications for heritage without consulting fans. Will the Minister explain how that might work? On what basis will the regulator make a judgment if it is not through understanding the impact on fans?
Combined with the lack of consultation rights in clause 46, the result is that fans are currently given absolutely no voice on matters to do with stadiums, even though they are the ones who will travel there, buy tickets and offer their support. I understand that the regulator is best placed to make a final decision, but it is unclear to me why fans cannot form one of the inputs that the regulator might consider.
The Government’s White Paper said that the regulator should
“have a remit to consider the implications for club heritage of any proposal, the views of fans and the club’s historical connection to its locality.”
Will the Minister share with us what has happened between the publication of the White Paper and the Bill to cause the Government to divorce the idea of heritage from fans? It must be clear why fans have not been given any say in this process. I hope the Minister will elaborate on that point today.
Finally, I want to examine whether the Bill will be able to prevent some home matches being played abroad if that damages heritage. This is not a purely theoretical proposition. Just a few weeks ago, Tim Howard wrote for a national newspaper about why Premier League games being played in the USA was “inevitable”. FIFA has also reportedly begun the process of allowing league matches to be played overseas. When Tim Payton of the Arsenal Supporters’ Trust gave evidence to the Committee, he warned that the movement of games abroad could be the next catastrophe the size of the Super League.
Clause 48 has the potential to provide assurances that this kind of action could only be taken by clubs with the approval of the regulator, should it be seen to damage heritage. However, the wording does seem to be geared more towards permanent relocation rather than the issue of clubs wishing to play single games, or a small subset, away from home.
Will the Minister confirm whether approval only needs to be sought by clubs wishing to play all of their home games elsewhere or whether it also applies to clubs wanting to play a handful of games elsewhere? In particular, will the regulator be able to have a say on league games being played abroad, and if so, would fans be given a say in the process? Given the salience of this issue with fans, it is important that we are clear on how the clause would apply.
Mr Betts
I rise to speak to amendment 29, which I tabled. We will move on to a debate on clause 49 shortly, to which it relates. It is interesting that fans will get a specific consultation, involvement and approval about changing the crests, shirt colours and names, as those are decisions that can be reversed quite easily. We know about the problems at Cardiff with shirt colours and at Hull with the name, but even if those mistakes are made by the owners, they can be changed the following year. A club cannot go back to playing on its old ground if it has been sold and is no longer an asset of the club. In some ways, the issue of where a club plays and its ground is more important for the heritage of the club, and it needs to take account of the interests and wishes of fans.
In clause 48, we have a regulator that will have to look at the significant harm done to the heritage of the club by moving ground. How does the regulator decide what is significant harm to the heritage of the club in isolation? The fans are the ones who understand that. They are the custodians of the club; they are the ones who go every week, whose families have gone to the club for years and whose children will go in the future for years. They are the ones who have a real stake in the heritage of the club, yet there is nothing in the wording that says they must be consulted.
All amendment 29 states is that in looking at the issue of significant harm to the heritage of the club, we should actually ask the fans what they think about it, so that they do not consider that the arrangements will constitute significant harm. I do not know how on earth the regulator will come to a view that is not a view derived from consulting the fans, so I hope that the Minister will give way on this amendment. At the heart of what we are doing here is ensuring that fans are listened to about the issues that are so important to them, and there is nothing more important for fans of a club than where their club plays, so I hope the Minister thinks that this amendment is in the spirit of the Bill and could be accepted.
Stephanie Peacock
During our discussion of clause 16, I spoke about the importance of clubs publishing personnel statements. By identifying exactly who holds key positions, including owners and officers, the regulator will be absolutely clear who must be held accountable for the proper fulfilment of licence conditions at each football club. With that in mind, I am pleased to support clause 51.
Question put and agreed to.
Clause 51 accordingly ordered to stand part of the Bill.
Clause 52
Duty to pay a levy
Mr Betts
This is a fairly simple clarifying amendment. As we have heard, smaller clubs feel that regulation must be proportionate and that there should be more requirements on very wealthy clubs, because they have the staff and resources to deal with that. Smaller clubs may find the whole issue of regulation very challenging, so amendment 30 simply says that the levy they will have to pay should be a percentage of annual revenue; in other words, a proportionate basis for the levy should be written into the Bill. The Minister may say that that will happen anyway—that that it is what the regulator will do—but the issue is a concern for smaller clubs, and the amendment 30 is an attempt to highlight and deal with it.
Stephanie Peacock
When the fan-led review first proposed the creation of an independent regulator for football, it suggested that the most logical way to pay for it would be through a levy on those who would benefit from it: the clubs. I agree with that conclusion, and I am pleased that the Bill confirms that the regulator will be able to require licensed clubs to pay an annual levy.
However, even though clause 52 is relatively detailed, there is surprisingly little on how the levy will be split between the clubs themselves. That is something that amendment 30, tabled by my hon. Friend the Member for Sheffield South East, has sought to rectify. If the regulator is given wide discretion to determine the extent of the levy, clubs further down the pyramid might be concerned that their payments will not be proportionate to their wealth and size. Of course, clause 52 states that the regulator should have regard to the financial resources of each club and the competition it operates in. That is promising, but it is worth clarifying today what that is expected to mean in practice. Will decisions be based on broadcast incomes, as per the fan-led review, or just on average total revenue, as per the White Paper?
There is broad agreement that the richest clubs should subsidise regulation for others. The majority of costs should, in this case, fall on Premier League clubs. The Government identified that these clubs could pay about 80% of the cost, with the six richest clubs taking on 50% of the total cost. The regulator will ultimately dictate the shape of the levy, but it should be under a clear direction to ensure that the levy is progressive and proportionate. It hardly makes sense for a regulator focused on financial sustainability to shackle struggling clubs to paying large fees. It is important that clubs do not fear the introduction of the new regime and view it as an opportunity, rather than being scared into thinking it will be a hindrance.
Clause 53 requires the regulator to consult before making the levy rules. That will include taking input on a draft version of the rules from the Secretary of State, the Treasury, regulated clubs and other appropriate persons. That welcome measure will hopefully shape the levy rules in a progressive way. It is also right that the regulator must publish information about the costs involved in calculating the levy charge before it starts charging in any given year. That transparency will be important, particularly for the clubs, which will want to understand exactly what they are paying for and why.
Overall, I welcome the levy and the method of payment, and I look forward to clarification on how the Minister expects the levy will be set.
Mr Betts
Absolutely. I just made the point about the enormous difference in budgets that Championship clubs now experience because of that. Of course, when we look at this season of the Championship, three out of the top four clubs have received parachute payments. Yes, other clubs, such as Ipswich, have done remarkably well without them, but clubs are always trying to compete with those clubs receiving the payments. Last year, two of the three clubs that came up had parachute payments, and it is now almost becoming a cycle of clubs getting parachute payments, going back up, then sometimes being relegated, and then getting another lot of parachute payments. That really is not a sustainable position for the clubs receiving those, for the clubs that are trying to compete with them, for the competitiveness of the game, or for the sustainability of the pyramid as a whole. I hope that the Minister will reconsider this because it is an issue that really needs addressing.
Stephanie Peacock
I am pleased to be able to discuss part 6 of the Bill, which provides a backstop power in the event that certain thresholds are met and football is unable to resolve the issue of financial distribution. Before I begin to explore this clause, it is important to set out that, in an ideal situation, these powers would never be used. As the hon. Member for Chatham and Aylesford set out during the evidence sessions, based on her experience with the fan-led review, a football-led solution to the issue of distribution has always been and remains the preference. I hope that can be kept in mind when discussing this part. Indeed, I welcome the powers but my hope is that their enforcement will not actually be necessary.
Clause 55 broadly sets out the process under this part but most importantly defines what might count as “relevant revenue”, which is money to which the backstop will apply. Relevant revenue is broadly defined as revenue received as a result of broadcasting rights, with the Minister given the flexibility to change that if broadcasting is no longer the predominant source of income. There are a couple of things to clarify. First, it would be good if the Minister could confirm whether such broadcast revenue is meant to cover domestic competitions only. Secondly, it would be appreciated if the Minister could clarify whether broadcasting revenue will still be considered relevant if the funding model changes so that it is paid directly to clubs, rather than through competition organisers. Broadly, though, I think this scope is generally accepted as being the right one.
Issues have, however, been identified with clause 55(2)(b), which is the part of the Bill that excludes parachute payments from the definition of relevant revenue. My hon. Friend the Member for Sheffield South East tabled amendment 27, and I will speak primarily to amendment 31 in my name. First, I would like to set some background to the issue, as it stems from the fact that there is an ever-growing gap between the Premier League and the EFL. Indeed, 30 years ago, EFL revenues were 75% of those of the Premier League; today they are just 6%. In real figures, that means that 30 years ago the gap was £11 million, and today it is £3 billion.
The Premier League’s approach to mitigating that gap is the so-called parachute payments to clubs relegated from the Premier League for up to three seasons. Those payments help to ensure competitiveness in the Premier League by providing clubs with the confidence to invest on promotion in the knowledge that they will be supported if they are relegated. For example, parachute payments might give the club the confidence to sign players on multi-year contracts, and that is incredibly important to consider. The Premier League’s competitiveness and the fact that any team, no matter their size or experience, can compete on any given day is what makes it the most beloved and exciting league in the world.
However, while they help to boost competitiveness in the Premier League, parachute payments—by the White Paper’s own admission—can distort competition in the Championship. In each of the last six seasons, two of the three clubs promoted from the Championship to the Premier League have been in receipt of parachute payments. The knock-on effect of that is that owners of clubs not in receipt of parachute payments are compelled to put ever greater levels of funding into their clubs to try to remain competitive. That overreliance on increasing owner funding has deeply exposed clubs when the funding does not materialise, as we have seen for Wigan, Bolton and Bury.
Further, the size of parachute payments has increased in recent years. Between 2010 and 2020, they have risen from £30 million to £233 million. That is an eightfold increase in a period in which player wages have only doubled. That means that, of the total distributable revenue of the English and Welsh professional game, the top 25 clubs—those in the Premier League—and the five in receipt of parachute payments in the EFL received 92% last season. That is £3 billion for 25 clubs, and £245 million for the other 67 professional clubs. Given the scale of parachute payments, therefore, it is notable that the Bill has definitively excluded them from the definition of relevant revenue. That is why I have tabled amendment 31.
4.30 pm
I want to be absolutely clear that the amendment is not about abolishing parachute payments; I believe that they provide clubs with the confidence that they need to invest, and they are a crucial tool in ensuring the competitiveness of the best league in the world. The amendment would simply give the regulator discretion to decide that, if certain criteria are met, parachute payments need not be excluded from the revenue to be distributed under the backstop provision.
Certainly, there is no reason to single out parachute payments. Whether people are in favour of significant parachute payments or not, they agree that they have an impact on club finances. As such, they will have a significant impact on the regulator’s objectives of protecting and promoting the financial soundness of clubs and the resilience of English football. Given that that relates to the regulator’s core role, the regulator should have the ultimate say on whether parachute payments are considered as part of the backstop provision.
Further, solidarity payments are explicitly linked to parachute payments. Solidarity payments are worked out as a percentage of the value of a year-three parachute payment. Championship clubs receive 30%, League One clubs receive 4.5%, and League Two clubs receive 3% of the value. The regulator, therefore, might find it difficult to look at one without looking at the other.
I emphasise again that the amendment does not predetermine whether the regulator includes or excludes parachute payments. If the regulator has a case, based on its objective evidence base, that excluding parachute payments from relevant revenue is more likely to make clubs financially sound and promote the financial resilience of English football, they will remain excluded. The amendment simply recognises that it should be the regulator that makes the decision, independent from any vested interests.
When making that decision, the regulator will have to pay explicit regard to the fulfilment of its core objectives and its secondary purposes: financial sustainability, financial resilience, competitiveness and investment. Taken together, those are the principles that should decide whether parachute payments are included—not the leagues and not politicians. Only then will we ensure that the regulator can fulfil the purpose of the Bill.
Damian Collins
I will make a few points on parachute payments. It is fair to say that they are not part of the redistribution mechanism between the Premier League and the Football League. They can be set as an amount alongside the redistribution that takes place, but, of course, they are not fixed. They are a contractual arrangement that the Premier League enters into with clubs that are in the league or when they get promoted.
For reasons that hon. Members have rightly set out, if the income of a Premier League club drops by at least half after being relegated, even with parachute payments, that will be a severe challenge to its sustainability. It is anyway and it certainly would be if those payments did not exist. Of course, if a club is promoted straight back up, as Leicester City has been this year, the year-two and year-three parachute payments are not kept by the Football League—the money never goes to the Football League—but goes back to the Premier League. Therefore, in many ways, the payments have nothing to do with the Football League; they are made by the Premier League to its member clubs in the event that they go down.
The question is then whether the existence of parachute payments has such a market-distorting effect that the regulator would have to intervene. It is difficult to see why the regulator would need to intervene on the basis of the impact on the clubs that have been relegated; they clearly need that support. From all the evidence that we heard as a Committee—I have not heard anyone this afternoon say anything to the contrary—there needs to be some compensating mechanism for clubs that go down, otherwise the risks are too great.
It is not always about clubs that have gone up and come straight back down again; it is often about quite large clubs—it was Leicester and Southampton last year. Everton could easily have gone down last season and the impact of such a relegation would have been catastrophic. The regulator would therefore have to take a view as to whether the existence of those payments has a distorting effect on the Championship.
Given the remit of the regulator, I urge hon. Members tabling amendments to be careful what they wish for. The regulator may well take the view that its job is not to have an impact on the nature of competition in the Championship, or to make it easier for more clubs to get promoted. Its interest is to promote financial sustainability, so it could easily take the view that parachute payments should stay because they are necessary for the clubs that are relegated.
Alongside that, there must be effective financial controls on Championship clubs. The question of whether a Championship club feels the need to compete against parachute payments is not necessarily one for the regulator. The regulator’s role is to ensure the financial sustainability of the league, so it might say that it can do that through the checks that it can put in place now, and therefore ensure that the situation created before does not happen again.
One could ask whether it is fair for the Championship to be run such that Championship clubs must compete against Premier League clubs, and cannot cook the books or rely on director’s loans because the regulator will stop them. Of course, in some ways the Championship is not competing with the Premier League. It is a league of clubs seeking to get promoted to the Premier League, but it is also looking to develop its own talent. It can buy talent from the lower leagues and from Europe, as it effectively does already. The TV revenue for the Championship, as it stands today, is already greater than for the top division in the Netherlands, Portugal, Belgium or Denmark, all of which are highly-competitive football nations whose pedigree in major international tournaments has been somewhat better than the home nations over the last few decades.
Football Governance Bill (Fifth sitting)
Debate between Clive Betts and Stephanie PeacockTuesday 21st May 2024
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Football Governance Bill 2023-24 View all Football Governance Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 May 2024 - (21 May 2024)
Stephanie Peacock (Barnsley East) (Lab)
It is a pleasure to serve under your chairmanship this morning, Mr Sharma. I am pleased to have reached the part of the Bill where we can discuss the content of the operating licences that will make up the regulator’s regime. As the Minister has said, clauses 15 to 19 set out the process for applying and granting both provisional and full operating licences. I would like to welcome a few things about these clauses.
First, I welcome the ability for clubs to gain a provisional licence first, with the conditions in this licence providing the building blocks for the full-time licence. This process recognises the importance of the transition period, allowing clubs to take the necessary time to understand the new requirements and get themselves in order to meet them if needed.
I also welcome that clause 16 clarifies that any club can apply for a provisional licence, allowing those expecting promotion to the National League to be proactive. Further, I am pleased that the process will require a personnel statement to be provided. That will be crucial in ensuring that the regulator is able to hold the right people accountable for the proper fulfilment of the licence at any given club.
The clauses allow for an advocacy first approach, where the regulator will provide an encouraging and flexible pathway for clubs to gain their licences. Coupled with the enforcement power in clause 19 to ensure that the regulator has the teeth it needs in the event of non-compliance, the process in this part of the Bill seems to offer a fair and supportive approach to getting clubs up to speed with the full requirements.
My hon. Friend the Member for Sheffield South East is right to highlight in new clause 8 that clubs should be supported in their transition to becoming fully regulated. That is especially important for those clubs in the National League and the lower tiers of the English Football League. In his evidence to this Committee, Steve Thompson, the managing director of Dagenham & Redbridge told us he was
“really worried that the extra reporting…will be more than a lot of them can manage without taking on extra staff.”––[Official Report, Football Governance Public Bill Committee, 14 May 2024; c. 39, Q61.]
He also highlighted that most clubs at National League level operate on one or two full-time staff, with some working on volunteers alone.
I think the Bill has done a good job of ensuring regulation will be proportionate. Further, I believe reporting requirements have been minimised wherever possible and should in any case be balanced out by the benefits of good financial planning and governance. However, given the concerns of clubs, I understand why some may feel it is better to make it explicit that the regulator will support clubs that are or will be licensed.
I hope the Minister can use this as an opportunity to highlight some of the ways in which the Bill as it stands will adopt an advocacy first approach and offer clubs the assistance they need to keep up with the regime. I do not believe it is anyone’s intention for the regulator to have to use its enforcement powers on well-intentioned clubs that are genuinely struggling to comply.
Mr Clive Betts (Sheffield South East) (Lab)
It is a pleasure to serve under your chairmanship this morning, Mr Sharma. I thank the Minister for his positive comments on new clause 8, which are very much in line with what it is trying to achieve. I think the Minister said that the new clause is unnecessary because the essence and intention of it is already contained in other clauses, and the regulator would be expected to operate in providing assistance to clubs in line with the way described in new clause 8. I think I have got that right.
Stephanie Peacock
I thank my hon. Friend for those comments; I am sure that the Minister was listening. I will come to the issue of playing games abroad in future Committee sittings, but I hope that the deterrent of the regulator’s enforcement, as well as the fact that the prohibition will apply whether or not a club is licensed, will be enough to dissuade clubs from making such plans anyway. A club that is willing to participate in a prohibited competition is a club that is willing to risk losing its licence, which would release it from the fan consultation requirements anyway.
The amendment is right to highlight that fans are not currently given a say in the Bill on changes to where their home matches are played. We will come to that point later, when we look at further amendments that give fans a say on stadiums.
Mr Betts
On the point about playing games abroad, which we will come back to later, it is interesting that although clubs will have to consult their fans, if the competition organiser decides to move games abroad and requires the clubs to do so as part of the competition requirements, there is no requirement for the competition organiser to consult fans. That seems to be a hole in the provisions that we will have to address at some point.
Stephanie Peacock
I thank my hon. Friend for that comment, which I will talk about later. I am sure that the Minister also heard it and will respond if he feels able to. For now, I ask the Minister to set out his thinking on why fans are not consulted on the heritage implications of moving a home ground. Overall, I welcome schedule 4 but would welcome a strengthening of the fan engagement provisions.
Football Governance Bill (Fourth sitting)
Debate between Clive Betts and Stephanie PeacockThursday 16th May 2024
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Football Governance Bill 2023-24 View all Football Governance Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 16 May 2024 - (16 May 2024)
Stuart Andrew
The hon. Gentleman tempts me to get drawn into an area of further expansion. I understand his point. I have never in my entire life been stopped by so many people to talk to me about football as on the weekend that announcement was made. I of course recognise the importance of the FA cup, but for the regulator to get into areas of match timings, replays and so on may be a bit too far. We will probably look more into that later.
The third objective looks to safeguard the elements I mentioned in the interests of the community and future fans, but not to stand in the way of the natural growth and renewal of a club. I commend the clause to the Committee.
Stephanie Peacock
Given the purpose of the Bill, as set out in clause 1, it is important that the regulator’s objectives are shaped carefully and clearly, as they will underpin many of the other measures. Although the fan-led review initially recommended a dual focus on sustainability and competitiveness, when it came to the regulator’s objectives the White Paper streamlined things so that the primary duties were regarding sustainability, with competitiveness becoming a secondary focus. I understand the Government’s reasons for that and have welcomed the subsequent primary duties being in three areas: the financial sustainability of individual clubs, the systematic stability of the football pyramid, and protecting cultural heritage.
I am pleased that the proposal from the White Paper is largely reflected in the Bill. However, I am curious about a few small changes, to which my hon. Friend the Member for Sheffield South East alluded in his intervention. For example, the exact wording in the Bill has “financial soundness” rather than “sustainability”, as was in the White Paper. Will the Minister explain why? It seems strange that the word “sustainability” is not included at all in the objectives. Further to that, the White Paper framed the systemic financial resilience objective in terms of the football pyramid, but the Bill goes only so far as to say “English football”. Will the Minister tell us whether the word “pyramid” has been purposedly omitted? Or does he believe that the definition of “English football” adequately covers things? I have no further issues with the intent of the objectives, but the wording is important if the Bill is to achieve its stated aims.
Mr Betts
The Minister’s answer with regard to the FA cup will disappoint many football fans. Football fans look to us to address things that matter to them, and the Minister is right that many fans were outraged at the decision taken with no consultation—not even proper consultation with the EFL and other leagues—to simply abandon FA cup replays.
We could all wax lyrical about the FA cup replay matches we have been to. Those are the ones I remember, and I refer again back to the 1970s, when Sheffield Wednesday, a third-tier club, had four FA cup replays with Arsenal, which was then in the top tier. I remember every one of those games—I went to four of them at least—because they were a unique experience, and that is what many fans feel. They want us to recognise that and to give some assurance that such decisions will not be taken with their interests cast to one side, as though they simply do not matter.
Oral Answers to Questions
Debate between Clive Betts and Stephanie Peacock(1 year, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Stephanie Peacock (Barnsley East) (Lab)
Mr Clive Betts (Sheffield South East) (Lab)
Financial Distress in Local Authorities
Debate between Clive Betts and Stephanie Peacock(1 year, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Betts
I recognise the particular problems in Birmingham. Some councils that have issued section 114 notices have specific problems; we know about the equal pay issues in Birmingham, for example. Some councils—I am referring generally—have perhaps brought those problems on themselves. However, as we say in the report, the challenge is no longer just individual councils with particular problems, but the generality of local government being under pressure, as set out by all our witnesses from the sector. In that situation, any challenging problem that comes to a council on top of a general problem can tip it over the edge.
Stephanie Peacock (Barnsley East) (Lab)
I thank my hon. Friend for his report. Barnsley Council’s budget has seen some of the biggest cuts in the country, which makes it even more impressive that it has been given two awards for being council of the year. To date, my constituency of Barnsley East has received no levelling-up funding, although such funding is a drop in the ocean compared with the figures my hon. Friend was discussing. We are awaiting the decision on our final bid, which was made to the cultural fund. Does the Chair of the Select Committee know when that might be announced? I note the Minister is in his place and I hope he will look on the Elsecar Heritage Centre bid favourably.
Mr Betts
If it was in my gift, of course I would give Barnsley the money it is asking for today, but unfortunately it is not. In another report, the Committee was fairly critical of the individual pots for levelling up, which are not joined up together. It is unsatisfactory that some councils can get bits of money from all these pots, while others get nothing at all. To address those problems, we have suggested a move towards single pots for local authorities, reflecting their needs and giving greater discretion and freedom to decide on spending at a local level. We are quite a long way off that at this stage. In principle, the Government recognise that is the way to travel, but they have not got a road map about how we are going to get there.
Mr Betts
While I might not completely agree with the Minister’s prayers, I agree that if we are to sort this out for the long term, particularly social care funding, we need a system that has general support. The Committee has called for that in the past. What we did on pensions reform a few years ago, cross party, has stuck, so there is merit in that suggestion. Whether we can achieve it, I do not know, but we ought to try.
Stephanie Peacock (Barnsley East) (Lab)
On a point of order, Mr Deputy Speaker. This morning, my hon. Friend the Member for Wansbeck (Ian Lavery) asked the Secretary of State for Environment, Food and Rural Affairs what owners of XL bully dogs who have missed the registration deadline for genuine reasons can do to ensure that they keep in line with guidance. A constituent who missed the deadline contacted my office today. They were unable to get their dog neutered in time for genuine reasons. The advice of the Secretary of State was to register as soon as possible; however, the Government’s website says that the service is now closed. I seek your advice on how things can be corrected, and the website can be reopened, if that was the intention of the Secretary of State, so that dog owners who want to do the right thing and register their pet can do so.