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Football Governance Bill - Sitting 1

14 May 2024

Proposing MP
Mark Hendrick Lab Co-op
Preston
Type
Public Bill Committee

At a Glance

Issue Summary

The statement addresses the proceedings for the Football Governance Bill Committee meeting. The statement discusses the financial sustainability and governance challenges in English football, particularly focusing on wage increases outpacing revenue growth and the need for a regulatory body to monitor finances. The statement discusses the Football Governance Bill and its implications, including the need for a regulator with statutory powers to investigate clubs and enforce cost controls. Mark Hendrick is discussing the Football Governance Bill and its implications for financial sustainability, investment, and fan accessibility in football. The statement discusses issues related to football club governance and ownership behavior, including financial reporting, regulatory oversight, and the potential impact of problematic behaviors by owners. Mark Hendrick, MP for Preston, is presiding over a session examining witnesses regarding the Football Governance Bill, focusing on the need for stronger regulation in football due to issues with financial sustainability and self-regulation. Mark Hendrick discusses the Football Governance Bill, focusing on the owners and directors test (ODT) and its impact on clubs in different leagues. Mark Hendrick discusses the Football Governance Bill and its potential unintended consequences for National League clubs. The discussion revolves around the Football Governance Bill and the role of the regulator in overseeing club ownership and investments. The debate focuses on the governance of football clubs in the UK, particularly regarding financial sustainability, transparency, and the role of the Independent Football Regulator. The discussion focuses on the Football Governance Bill's clause 55(2)(b) and its implications for regulatory powers regarding parachute payments and financial sustainability in football clubs. MP Mark Hendrick addresses concerns about football governance and funding distribution. Mark Hendrick discusses the importance of the Football Governance Bill and acknowledges the involvement in the fan-led review process. Kevin Miles discusses the importance of including ticket pricing in fan engagement regulations to ensure better communication between clubs and their fans. Mark Hendrick discusses the Football Governance Bill, focusing on the importance of strengthening provisions for fan engagement and clarifying certain aspects of the bill. Mark Hendrick announces the end of morning Committee session and thanks witnesses for their evidence.

Action Requested

There is no specific action requested; the statement provides procedural information and announces the start of oral evidence sessions from academic experts on football finance.

Key Facts

  • The Committee will meet at specified times on May 14, 16, 21, and 23.
  • Oral evidence sessions are scheduled with various organisations including Mr Kieran Maguire, Dr Christina Philippou, the English Football League, Premier League, etc., up to June 6.
  • Written evidence will be reported for publication.
  • The Committee shall deliberate in private before oral evidence sessions.
  • Since the Premier League was formed in 1992-93, its revenues have increased by 2,857%, while wages have risen by over 4,000%.
  • In 2022-23, Premier League clubs lost a collective £836 million and Championship clubs averaged losses of £20 million.
  • About two in five clubs in the top four leagues have gone into administration over the last 30 years.
  • The Football Governance Bill aims to address corporate governance issues in football clubs.
  • An independent regulator would have statutory powers to investigate clubs and enforce cost controls.
  • Checks on new owners’ backgrounds and their proof of finance should be robust.
  • National League clubs average losses are £970,000 a year.
  • In 1992-93, 43% of Premier League revenues came from matchday tickets; in 2022-23, this is down to £1 in every £7.
  • Full stadiums are critical for the emotional and financial success of football matches.
  • The Football Governance Bill aims to tackle problematic behaviors by club owners.
  • Clubs rely on timely financial reports published at Companies House for meaningful analysis.
  • Portsmouth FC had two former owners jailed for fraud, highlighting issues with due diligence in ownership.
  • The session welcomes Richard Masters, Chief Executive of the Premier League; Rick Parry, Chair of the English Football League; and Mark Ives, General Manager of the National League.
  • The discussion centres on the effectiveness of current owners and directors tests in football clubs.
  • The panel will address whether the Bill's new regulatory layer improves financial sustainability and governance.
  • Mark Hendrick is discussing the Football Governance Bill in a Public Bill Committee.
  • The National League is governed by FA regulation for the owners and directors test (ODT).
  • Hendrick welcomes the ODT but urges the Government to ensure speed of operation.
  • The Bill sets out aims without specifying methods for achieving them.
  • National League has not had a club go into administration since 2013 due to financial regulations.
  • Concerns about duplication of licensing schemes and costs being passed down to regulated clubs.
  • The Premier League aims to maintain its position as the most popular league in the world through collective effort and investment.
  • Football governance needs to be football-led, with regulatory bodies stepping in when necessary.
  • The National League has a licensing programme to prepare clubs for EFL, ensuring they are suitably prepared upon promotion.
  • Richard Masters acknowledges that the Premier League has enforced financial rules this season.
  • Rick Parry agrees with Richard Masters' opinion on the scope of the regulator's role.
  • Mark Ives highlights the importance of league-specific financial regulation and intervention for club survival.
  • The current solidarity payment from the Premier League to the EFL is around £130 million annually.
  • In 2021, five parachute clubs received £233 million between them and 19 Championship clubs received £79 million in solidarity payments.
  • Parachute payments have risen from £30 million (7% of aggregate turnover) in 2010-11 to £233 million (39% of aggregate turnover) in 2020-21.
  • The Premier League agreement was renewed in 2019.
  • Part 6 of the Bill acts as a backstop for resolving disputes when negotiations fail.
  • EFL and Premier League funding distribution is under scrutiny.
  • The Football Supporters' Association has been lobbying for significant reform to football governance.
  • Kevin Miles is Chief Executive of the Football Supporters’ Association.
  • The Bill supports the establishment of an independent regulator with three primary objectives: sustainability, resilience, and heritage.
  • Kevin Miles addresses issues related to club engagement with fans.
  • Fan advisory boards in Premier League clubs do not always provide adequate consultation on ticket price increases.
  • Amendment proposed by Ian Byrne aims to add supporters and supporter organisations to clause 8(b) of the Bill.
  • Kevin Miles advocates for clearer guidance on club responsibilities in fan engagement.
  • Independent directors could be required to consider fans' views as part of their corporate governance duties.
  • There is a need for better mechanisms to resolve disputes over ground ownership and relocation issues.
  • Mark Hendrick is the MP representing Preston (Labour/Co-operative).
  • The Committee will reconvene at 2 pm this afternoon.
  • The next meeting location is the Boothroyd Room.
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