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10 Feb 2010 : Column 294WH—continued
We have got to give some reality to the question, "Who is a fit and proper person in the game of football?" With Portsmouth, for example, nobody even knew who the owners of the club were, never mind whether they were fit and proper people to be in football. Clearly, the concept of a fit and proper person is way beyond not only the ordinary supporter but the wider stakeholders in football. Within that concept, we have to include the idea that financial stability and credibility is part of that matrix of fitness and properness. That financial stability and credibility must include the capacity to absorb debt, or rather not absorb debt, into the club. There is nothing anti-capitalist in this argument-I say that for the benefit of my hon. Friend the Member for Hayes and Harlington.
John McDonnell (Hayes and Harlington) (Lab): You were taking me with you. [Laughter.]
Tony Lloyd: Only because I want to appeal to the global audience.
The NFL-the National Football League in America-regulates American football and has very strict limits on the amount of debt that clubs can take on board. Frankly, if that is good enough for the Americans in this sporting context, we ought to learn at least some of the lessons from the United States and impose them over here.
Mr. Pelling: The hon. Gentleman mentioned American sports. Would it not be better perhaps for the premier league to copy what is done in America, by sharing revenue among clubs to ensure a healthier and more competitive league system?
Tony Lloyd: Many of these ideas obviously ought to be on the table. I can think of arguments for and against such revenue sharing; as a Manchester United supporter, my instinct is to say no to it. However, the reality is that football needs to see itself as a totality. No one club can compete against itself. I am sure that I will not be popular in my own constituency for saying this, but if Liverpool FC was to go out of business, it would actually not be in the interests of Manchester United or Manchester City, because we need quality teams to play against, however frustrating it is on those occasions when the wrong result emerges from those contests with Liverpool FC-they emerge less now than they did previously.
Another issue is almost bizarre, and I ask my hon. Friend the Minister to look at it. Tax relief is available for those who buy football clubs with leveraged bids. It is preposterous that we are allowing rapacious corporate raiders to come in and use tax relief as a way of gearing their acquisition of otherwise financially sound clubs. Quite frankly, we ought to get rid of that tax relief in this industry.
Across the board, let us go back to the football taskforce and its majority report and to the all-party group on football's recommendations. Let us consider those recommendations and that report quite seriously, and let us begin to say that we will implement them.
I want to conclude with a couple of specific propositions. We have got to look at the models for protecting supporters'
interests that exist elsewhere. In Germany, for example, a club's supporters have the golden share, which prevents abuse by the German football clubs against the interests of their natural support base. That makes a real difference. Germany has bigger crowds and lower ticket prices than this country does. Ticket prices come up, time after time, among ordinary fans here, because they feel that they are being ripped off.
We also need to look at the Barcelona model or, if people prefer, the John Lewis model of share ownership, which establishes ownership among the ordinary supporters. [Interruption.] I will not venture further down that path. However, it is important that we look at the different models that exist.
Whatever happens, we must ensure that the supporter can be included. I was once a shareholder of Manchester United; that shareholding was liquidated, under company law, when the present owners took over the club. I had a nominal shareholding as a matter of tribal loyalty or tribal support, not because I wished to take over the club or run it.
Mr. Hancock: You had shares? Why did you not vote?
Tony Lloyd: I once had shares. Of course, they have now gone, because they have been liquidated and that has applied across the board. So we must find a way of involving the fans in the governance and running of the clubs and the leagues.
I want to finish on a very personal level. I mentioned the Munich air crash before. I can remember the impact on the city of Manchester when those young men died-at the time, when I was a boy, they were men to me. It had a profound effect on a city such as mine. That memory is still strong and vivid, and it is not a memory just for one generation; it is carried down culturally from one generation to the next. The same would apply to people in the cities of Liverpool, York or Portsmouth, or wherever.
Actually, I am one of those people in Manchester who has always watched both football clubs; I watched Manchester City as well as Manchester United. I can talk about City players from the past such as Johnny Crossan and not just the famous City players such as Lee, Bell, Young and Summerbee.
In the end, football does matter. It is about our tribal identities. That can be bad, in the worst excesses. But football is the beautiful game; it is the game that ennobles people if it is played in the right way, and it is the game that is about giving entertainment but also values if it is played in the right way. Most of us grew up thinking that those role models-the captain of England, when it was Bobby Moore or Billy Wright-were sterling people who had values that carried us through in life.
I look back to that older generation who gave me those values, and I am grateful for that. We should not put that at peril by saying that football is only a commodity to be bought and sold; if we do so, I am afraid that we betray this beautiful game of ours, and we betray the heritage that we ought to hold precious.
I have spoken at length; I hope that other Members might have the chance to speak.
Sir Nicholas Winterton (in the Chair): Order. Clearly, a number hon. Members would like to catch my eye and I would like to fit them all in. I intend to call the Front-Bench spokesmen shortly after 3.30. We therefore have just over half an hour for all Back-Benchers who wish to get in. If anyone can guarantee that they will talk about Macclesfield Town football club, I assure you that they will be called.
3 pm
Mr. Mark Field (Cities of London and Westminster) (Con): I am a lifelong supporter of Bury football club, which beat Macclesfield Town only last night to record a sixth consecutive victory. I was not going to bring up that sore subject.
I congratulate the hon. Member for Manchester, Central (Tony Lloyd) on securing this extremely timely debate. This very day, the futures of Portsmouth, Cardiff City and Southend United are being debated in the courts. I welcome the opportunity to discuss the state of our national game and its governance and regulation. I have a keen interest as a lifelong fan and follower of football, and as a member of the all-party football group, to which the hon. Gentleman referred. I represented the Conservatives on our reports on the game's governance in 2003 and on the finances in 2008-09.
I have long argued that the sport is too loosely regulated, perhaps in the self-interest of the top premiership clubs that have a global reach. One difficulty with trying to empower the Football Association is that the premier league will not have it.
As the hon. Gentleman rightly said, many people claim that politicians should not interfere in the running of our national game. However, in my view, it is perfectly legitimate for us to debate the issue. Tens of millions of pounds of public money have been spent over the past 25 years on repairing football stadiums since the Taylor report. Football plays an important and significant role in the local economies of numerous towns up and down the country. Furthermore, it is an integral part of British culture and remains a highly successful export.
Live coverage of English football, predominantly of premiership games, goes out literally worldwide, attracting a regular audience of nearly 600 million people. When I was in Dhaka in Bangladesh recently, I turned on the television at 11 o'clock the night before I came back and on ESPN were live Arsenal and Manchester United games.
Bob Spink: On a positive note, will the hon. Gentleman join me in congratulating the Football League on its partnership with Help for Heroes? It has fundraised for returning heroes and provided free and discounted football tickets for our armed forces.
Mr. Field: I agree with the hon. Gentleman. I saw that work when I watched my local club at Aldershot, where perhaps it is understandable to see Help for Heroes, and Dagenham and Redbridge in recent months. I vouch for that being a tremendous initiative.
Those who do not subscribe to the obsession that we football fans share will perhaps fail to understand the passion and growing concern that many of us have about the game and its future. There are serious questions to be asked about the morality and values underpinning the game, particularly in the premier league. The people's
game has undergone a dramatic transformation over the past 18 years since the formation of the premier league and there is an unprecedented and probably unbridgeable gulf between the top clubs and the run-of-the-mill premiership teams, let alone clubs playing outside the top flight. I fear that is partly due to the lack of competition that has been referred to. It is the direct result of lax governance and an absence of effective regulation. There are no wage, squad size or registration restrictions-a state of affairs unknown in other sports around the world, from Aussie rules football to US baseball, as the hon. Gentleman for Manchester Central said.
Before discussing the potential reforms that could improve the situation, we must take a step back and consider how we got to this point. A key contributor to the radical change in English football is the huge revenue incomes of premier league clubs, in comparison with their Football League counterparts. To indicate the scale of that revenue, premiership clubs receive £2.8 billion, split between 20 teams over a three-year contract. In stark contrast, the Football League's latest contract is worth £88 million annually, divided between 72 clubs.
Crystal Palace, here in London, are the latest club to enter administration. They join a host of clubs that have experienced that traumatic fate in recent years, including Leeds, Southampton, Rotherham United, AFC Bournemouth and Luton, which is no longer in the league. Premier league clubs have hitherto only flirted with that prospect and we all await the fate of Portsmouth today. The sole difference is that the premiership clubs, by virtue of the vast sums of TV money, tend to have a greater ability to attract some form of bail-out.
One of the few pieces of regulation that premier league clubs adopted from the Football League is the fit and proper persons test. However, that is more honoured in the breach and is in urgent need of attention. Half of premiership clubs are foreign owned, often involving dubious investment made by cagey consortiums. It seems that the need for immediate cash-flow relief renders the test optional rather than compulsory.
Even at home, it is noticeable how much money talks. Last month, David Gold and David Sullivan completed their takeover of West Ham United. Twenty years ago, a similar approach by the same duo was rejected out of hand because they were regarded as below the salt, their money having been made in soft porn publishing. Today, they are rightly perceived as transparent and legitimate investors in football and as preferable to the many foreign and shady owners.
Mr. Field: Indeed, they are fans. Even Manchester United and Liverpool are saddled with the burden of foreign leveraged buy-outs.
How can we improve the state of the game? Football agents have been under intense scrutiny in recent years. Sadly, it has become fashionable for the media, clubs and football authorities to heap all the blame on agents. Although they are easy scapegoats and, as we are told frequently, leeches on the great game, the facts are less simple. Clubs, managers and owners have often colluded in the worst practices, furtively using agents to tap up players who are not on the move, with the agents feeding soccer journalists self-fulfilling stories about player unhappiness or club desire.
The core of the problem is the eternal conflict of interests in all agency relationships, which is made worse by the grubby antics of all too many football clubs. Essentially, agents are not instructed on many of the transactions in which they involve themselves. They claim, and are given, fees by players and by clubs, both at the buying and selling ends of the deal. Some have wider consultancy arrangements whereby clubs pay for their services, which can involve sabotaging transactions and tipping off journalists with misinformation.
It is time for a proper code for agents in the game. There must be clear, punitive sanctions, especially against clubs and their employees. Any fee for agency services should be paid by only one party to a transfer deal. It is all too easy to blame agents for what has happened in the game. There are also a number of underlying problems. Financial irregularities have become all too frequent in recent times and have gained high-profile exposure. Football is languishing in the lurid world of celebrity, increasingly appearing on tabloid front, rather than back pages.
I have painted a somewhat grim picture thus far, but there is some positive news. It relates to the Football League, which continues to lead the way in good governance of the national game. Over the past few years, the Football League has rolled out a number of measures to try to stabilise the financial health and future existence of its 72 clubs. We should highlight those measures and promote them to our top flight clubs.
In April 2003, the Football League clubs introduced a sporting sanction of 10 points for any club entering administration so that financial irresponsibility and unsustainable growth off the field is met with a real punishment on the pitch. The risk of losing points or a place in a certain league promotes responsible management and is surely factored into risk taking in the Football League, if not in the premiership.
Mr. John Leech (Manchester, Withington) (LD): I agree that losing 10 points is a bad sanction that encourages club owners not to go down that financial route. Unfortunately, it is the fans who lose out as a result of their club losing 10, 20 or 30 points.
Mr. Field: It is the fans who lose out. To be brutally honest, when the Glazers first appeared on the scene in 2005, most Manchester United fans were entirely happy because they saw the huge amount of money coming into the club as a counterbalance to the influence of Roman Abramovich at Chelsea.
Mr. Field: If the hon. Gentleman will excuse me, other hon. Members want to speak and I want to say just a couple more things.
Another positive step forward is the divisional pay clause in players' contracts, which states what each player will earn regardless of relegation or promotion. As the hon. Member for Croydon, Central (Mr. Pelling) said, league two clubs have the obligation that only 60 per cent. of football revenue can be paid in wages. That is a sensible way forward.
My worry is that the game cannot remain split into the haves and have-nots. The community game mentioned by the hon. Member for Manchester, Central-it is very much a passion for him-has existed for the past 100 years, but is in great danger of drifting irreversibly towards a franchise structure that is more akin to that in American football, where only a small number of franchise clubs in just 10 or 12 of the biggest cities can play a part. We have already seen the first step in that direction, with the birth of the Milton Keynes Dons in 2004, which saw a south London club, Wimbledon, bought, relocated-notionally, at least-from south-west London to Buckinghamshire and given a new identity.
This is a timely and important debate. I hope that Members will gather that I have a lot of passion for football, as many other Members do, and I look forward to hearing their contributions.
3.10 pm
John McDonnell (Hayes and Harlington) (Lab): I declare an interest as the honorary vice-president of Hayes and Yeading football club, which was created in a recent merger. We won 4-0 last night, although I was in the House debating alternative votes, but there you are.
We all share the passion for football. I come from Liverpool and I am a Liverpool supporter; indeed, my family is obsessive about the club. When my mum and dad got married after the second world war, their honeymoon was a home match and an away match, with a reserve match thrown in, my dad being the romantic that he is.
I share the analysis of my hon. Friend the Member for Manchester, Central (Tony Lloyd). What is happening in football mirrors what is happening in the wider economy, with the boom and bust, the speculation, the leveraged buy-outs and the unsustainable debt ratios. None the less, the Government had an excellent record before the credit crunch hit football and the wider economy, and I pay tribute to my right hon. Friend the Member for Sheffield, Central (Mr. Caborn) for the Football Trust report, the first stages of its implementation and the 5 per cent. that we got from TV levies to support football at the grass roots-all that was excellent. I also support UEFA's plans for financial controls, because we need a Europe-wide approach, despite the criticism from some premier league clubs.
In the face of the crisis that has hit the football economy and the wider economy, however, we need to go much further, and I want to make a few brief points. First, on leveraged buy-outs, due diligence needs to be extended from directors to the sustainability of any bid proposal. Controls should be placed on debt ratios, and debt should be limited to reflect the realistic record of income levels, so that the debt and the club can be sustained in the future. Such issues should be assessed independently by a football financing commission, which could go in and prepare an independent and fully open and transparent report so that supporters and the wider public can see whether a buy-out or an investment is sustainable.
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