Football Governance Bill - Committee Debates Day 4
Lord Blunkett delivers strong message to Conservative Peers trying to Filibuster the Bill. Alleged UEFA concerns and Premier League club interests continue to hinder progress.
Day 4 (Thursday 9th December) of the Committee debates in the House of Lords on the incoming Football Governance Bill , started with a statement from The Lord Chief Whip, Lord Kennedy of Southwark:
“My Lords, as we begin day 4 of Committee on the Football Governance Bill, we have an ambitious target today and I urge all noble Lords to work together to achieve it. I particularly draw the Committee’s attention to the front page of today’s lists from the Government Whips’ Office and all the reminders about speaking times, which were agreed by the House last year. I remind the Committee of that and we expect noble Lords to work together to make progress to that ambitious target; we need to get to it today.”
and
'“We do not want repetition; we want proper scrutiny, with progress made today on the Bill.”
Day 4, like the first three days of debates, once again saw Peers (predominantly Conservative) soak the most airtime across the two sessions lasting over 7 hours. Session 1 lasting four hours and session 2 lasting over 3 hours, ending just after midnight. Compared to the previous 3 days of debates , the pace of the debates improved, with 70 of the 342 amendments referenced, discussed or debated. However the committee will need to shift a few gears in the last 2 days of debates, pencilled in for 16th & 18th December, if all 342 amendments are to be put to the committee.
The focus of the days debates being:
Parachute Payments (backstop mechanism) and the potential impacts on the relationship with UEFA and the future involvement of English teams in UEFA competitions.
Inclusion of the Women’s game in the regulation.
Inclusion and Diversity related amendments.
Reporting from the IFR to its stakeholders.
The debates in the first session focused around two letters. which we will discuss throughout this article.
Letter one being a UEFA letter to the Government raising concerns UEFA have on the backstop mechanism. Letter two being a letter sent from the Brentford FC Chair to Lord Markham and Local MP’s on their concerns on the same subject.
Both letters are yet to be made public and as per previous committee days were used to delay proceedings.
Letter 1 - UEFA and the Backstop Mechanism
Amendment 71 (provided in the figures below) created the first debate of the day and saw Lord Markham and Baroness Brady working like a wrestling tag team, whose rhetoric once again focused on the negative impacts the backstop mechanism and the inclusion of parachute payments will have on Premier League clubs competetiveness as well as potential knock on impacts with UEFA.
Brady quoting the inclusion of parachute payments as “major and radical change in the Bill”.
Lord Markham, with his amendment 71, is proposing to rubber-stamp an amendment clearly preventing the IFR redistributing revenue from one club to another.
In support of Amendment 71, Baroness Brady said:
“I believe there are nine billionaire owners in the Championship, along with many other extremely well-funded ownership groups—but I will dwell on the fact that, despite its very healthy income, the EFL does not give any money to the National League. It gives no funding to the leagues directly below it. It is the Premier League that supports the National League. Far from some sort of neutral arbitration to allow all parties to share with each other, the backstop is in fact a mechanism for the forcible redirection of billions of pounds of Premier League revenue only. In other words, this is one set of private businesses handing over money to another competing set, even if they do not want to give more than the £1.6 billion they already do and it damages their ability to compete.
The critical point, therefore, is that this backstop mechanism represents a completely unprecedented and untested intervention in what are the private commercial rights of Premier League clubs only. It impacts uniquely on Premier League clubs. The gravity and novelty of such an intervention demands the most careful consideration. Crucially, the backstop introduces a major and radical change in the Bill: the inclusion of parachute payments. This decision was taken without adequate consultation with Premier League clubs.”
Brady once again referenced a letter sent by UEFA and their concerns on these clauses.
“UEFA has urged the Government to carefully reconsider their approach, emphasising that mandating redistribution in this way risks deterring amicable solutions and the very investments that underpin the success of English football.”
Without the letter being made public by the current government or Baroness Brady it is hard to see if this is just a storm in a teacup, mere delay tactics by Peers who seem solely focused on keeping Premier League club owners financially whole.
Other opposition peers using the UEFA letter as a springboard once again mounted a string of delay speeches, this time using other industries as benchmarks, irrelevant examples below from Lord Markham:
“Can you imagine Ofwat saying to Severn Trent, “Thames Water is having a bit of a hard time, can you help it out”? … That is unheard of among regulators.”
A choice example by Lord Markham, considering on the same day, he made the sarcastic example, Severn Trent have been accused of artificially inflating its balance sheet by more than a billion pounds. and Thames Water have been reported a steep increase in executive bonus payouts whilst simultaneously proposing to increase household bills by 59%….maybe firmer financial regulation is required Lord Markham.
It seemed like the Lord Chief Whip’s opening statement was completely brushed off until Lord Blunkett who after about an hour of mostly repetitive arguments from the opposition benches, stood and delivered a very stern message:
“I hope we will not spend an hour on this group. Having sat through parts of the first two days in Committee, I have heard exactly the same arguments this afternoon as I heard on the previous groups, including on the definition of football, what we mean by competition and even what fairness is..”
and
“What is this all about? It is quite right that we in this House should scrutinise, raise legitimate argument and challenge a Bill of this sort, but I say to the Premier League, and to those who are, by the very nature of the debate over the last three Committee days, involved in taking the briefings: overdo this and you will do so at your peril, because at some point millions of fans out there might learn what is going on with the filibuster taking place in this Committee and, when they do, they will be very angry.
The Premier League, with its money and its brilliant legal and lobbying support, needs to just reflect on whether this filibuster and what is being done in this Committee is benefiting it. I think not—sometimes overdoing it can be really detrimental.
This was followed up by a reminder on how the Bill came about:
“Bear in mind, this whole issue came out of the report of a former Conservative Sport Minister. It was subject to a White Paper by the previous Conservative Government in February 2023, and legislation was then drawn up by the Conservative Government. After all that further scrutiny and debate outside, we are now debating it under a Labour Government”
Letter 2 - Brentford to Local MP’s
As reported in our Day 3 summary, the Premier League has issued letter templates for Premier League clubs to send to local MP’s raising concerns on the introduction of a IFR.
Step up Brentford. The first club it seems to have buckled and responded with a letter to local MP’s.
During day 4 debates and to support certain amendments, Lord Markham quoting the following on the letter he received from the Brentford F.C. Chair:
“The letter that Brentford wrote to me and to local MPs says: “a regulatory framework that prioritises stability above all else would be disproportionate. It could mean the regulator financially constraining some Premier League clubs more than others. For Brentford, a club that has risen against the odds to the Premier League, such restrictions risk stifling our ability to grow and compete with larger, established clubs”. That is why I tabled this amendment, to expand the regulator objectives. Otherwise, there is the danger exactly as written in the letter, which I am happy to share with all Members here and which has also been sent to local MPs.
The exact concern of Brentford’s chairman is that, if the regulatory framework is just based on financial sustainability, it risks entrenching the closed-shop nature of the top clubs and will restrict the ability of the Brentford’s of the world to compete.”
The Pitch Inspection has requested a copy of the letter from the Brentford F.C. media team. They are yet to respond.
The video above providing another example of a Conservative Party Peers acting as the mouthpiece of select Premier League clubs during the Committee stage of this Bill, the wrap sheet so far:
Baroness Brady & West Ham United.
Lord Markham & Brentford F.C.
Lord Finkelstein & Chelsea F.C.
Lord Moynihan & Newcastle United.
Another example of Conservative peers marching to the drums of the Premier League came from Lord Ranger of Northwood, who in support of amendment 328 (below) took nearly the full time available about his “…love for Tottenham Hotspur Football Club remains undiminished”.
The Lord going on to make reference to Spurs successful stadium and the increased revenue it is making for the club with its multipurpose use (Concerts, NFL and Boxing etc.). It is hard to disagree with the Lord on certain points as it is a magnificent stadium to watch football and configured to maximise revenue.
Lord Ranger of Northwood finally gets to the purpose of his speech by saying:“I am calling for a six-month report to the Secretary of State from the independent regulator, but I am really politely asking the Minister what the regulator will be reporting on. Will it have to forensically detach the revenue streams relating to non-footballing activities which are on the clubs’ balance sheets to give us a pure footballing revenue view so that it can be compared and contrasted on a footballing-pure basis? How will the criteria for reporting on the impact on the clubs’ finances be established? Will the regulator be expected to take a full 360-degree view of club finances both now and in the near future, or will it relate to revenues only generated by football-related activities?”
A valid question, one you can imagine coming straight out of the mouth of Daniel Levy. However it is another example of probing amendments with the sole purpose of protecting the revenue stream of a Big-Six club.
Another potential area of conflict is that Lord Ranger of Norwood registered interest list shows he received ticket and hospitality for Tottenham Hotspur v Wolverhampton Wanderers Premier League match at Tottenham Hotspur Stadium from Getir (a former club partner).
Is Football really thriving?
One comment that caught my attention during the days debate came during a discussion on Clause 10 State of the game report (below), a report the IFR will be required to issue.
There has been a number of amendments proposed extending the scope boundaries of the report including Amendment 101 by Baroness Brady (below). proposing the below, reason for the amendment:
Rising in support of this amendment was Lord Moynihan of Chelsea, who went on to say:
”he repeated himself earlier this evening in claiming that there was this catastrophic situation in the lower orders of football. I do not see it. Football is thriving. “
If we take the championship as an example, there has been numerous Lords during the committee debates stating the league is the 6th biggest in Europe. Yet if you look at the research conducted by The Swiss Ramble on the finances of the Championship over the last 10 years it would indicate that it is certainly not thriving.
The well articulated and thorough report goes onto to say:
The Championship loss before tax has actually widened since fans returned to the stadium, rising from £217m in 2020/21 to £300m in 2022/23.
Looking at the last decade, it is clear that this division bleeds money with total losses of £2.6 bln, including £1.5 bln in last five years alone.
Although operating losses have also reduced since 2019/20, the Championship still lost a hefty £456m in 2022/23, i.e. an average of £20m per club.
To highlight the overall deterioration, operating losses were £2.8 bln in the last five years, compared to “only” £1.9 bln in the preceding 5-year period. Put another way, this was equivalent to £4.7 bln in the last decade, which is not exactly small change.
Thriving being the polar opposite for a significant amount of clubs. This week alone there are continued events at Reading and Everton for example that if not addressed will have long last impacts on those clubs.
You will find similar reports for League 1 and League 2 from various reputable journalists and football finance experts.
That is all for today. More to come next week.
Thank you for taking the time to read. Please share amongst the football community.
Kevin and Russell (The Pitch Inspection)