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Football And The European Commission

June 24, 2003

Football And The European Commission

I welcome the Minister to her new role. I am sure that she had a slightly heavy heart when she realised that she would have to discuss football in Westminster Hall today.

I thank the hon. Member for Northampton, South (Mr. Clarke) for raising an important issue that vexes many of us who have a passion for the national game. He and I are members of the all-party group on football, which is currently conducting a full investigation into financing and other aspects of the national game.

I am an unashamed soccer supporter. It infuriates and baffles many of my friends that, religiously, at quarter to five every Saturday afternoon during the season, I have to be glued to a television screen to find out the results. If I am out and about, I have to be as near as possible to a radio to find out how my team gets on. I should point out that I think that the season lasts slightly longer than 30 weeks of the year; that is what Mrs. Field would say.

Those who are not members of the soccer-supporting cult find it difficult to understand the passion. Like the hon. Gentleman, I support a club in the third division. I am sad to say that it was also in the third division last season, unlike Northampton Town. The clubs will be fighting each other next time out. Soccer is a passion close to my heart. My club, which I have supported since I was five, was one of the clubs in administration only last year, and is making a slow and gradual recovery.

The model of ownership in football is bizarre and I have some sympathy with the Minister and, to that extent, with the European Commission in trying to develop a set of rules that are sensible, within an economic framework, for the footballing industry. In one sense, we are talking about the economics of the madhouse. Who would really want to invest in a football company? As the hon. Gentleman said, a long-standing Northampton Town fan, and no doubt a successful business man in every other business he operates, is effectively bankrolling the local club. That is the case in many of the 92 professional clubs in the English game.

Local communities also find themselves as stakeholders in the game. It has been rightly pointed out by a number of those who have contributed to the debate that football goes beyond simply the large clubs that are able to get all the television coverage. Indeed, it goes beyond the 92 league clubs. As the hon. Member for Twickenham (Dr. Cable) rightly pointed out, it goes right down to community level, with a couple of hundred people regularly – or irregularly – turning up on cold, wet winter afternoons to watch a local, semi-professional club.

The hon. Member for Stoke-on-Trent, North (Ms Walley) made a good point when she said that she wanted the Minister to see what the Government could do to ensure that there would be action in Europe. If there is not, there will be long-term destabilising effects on the smaller clubs. There is also a real worry that there might be short-term destabilising effects, with perhaps dozens of clubs going into administration very quickly.

The hon. Member for Northampton, South analysed the European aspect. He is quite right to say that, generally, clubs in Europe are left to make their own deals. One reason why there are far fewer professional clubs – even in countries such as Germany, which has got two professional leagues in the Bundesliga and regional leagues beyond that – is the nature of the sale of rights. It would be regrettable if we were to go down that route.
I hope that the Government will do all that they can to ensure that the Commission is made aware of the way in which community values are at the core of the footballing industry in this country.

The hon. Member for Leigh (Andy Burnham), in his quick-fire, 100 mph contribution, made, as ever, sensible and informed comments. As has been pointed out, he had an important role to play prior to being elected to the House.

The financing of soccer is bizarre, to put it mildly. The quaint days of the maximum wage ended about the time of my birth, which coincided with the time when Northampton Town was going onwards and upwards. I was born in 1964 when Northampton was on the way up to the first division. It later came down almost as quickly, but I shall draw a veil over that. At that time, in 1964, when "Match of the Day" was introduced, television rights were worth tens of thousands of pounds per season. The hon. Member for Northampton, South was right to identify that a major turning point was 1992. Money had increased during the 1970s and 1980s and in 1992 the premier league was created, led by the big five clubs at the time – Arsenal, Everton, Liverpool, Manchester United and Tottenham Hotspur – who wanted a much larger slice of the cake. In part and in the short term, they were able to increase the size of that cake, but we are now at a crossroads.

The hon. Member for Selby (Mr. Grogan) was right, if a little complacent, when he said that there is no crisis. Surely, one of the problems now is that some of the largest, cash-hungry, professional clubs may be tempted to unbundle, especially as the overall pot of TV money likely to diminish substantially when contract rights are renegotiated, whether with BSkyB or other operators, in the next year or two.

Spiralling amounts of cash have gone into the game during the past decade and the worry is that so much of it has ended up in the hands or pockets of the talent – the players – but also agents and peripheral figures. Now that the cash juggernaut looks as though it will slow down sharply, there is a question about the future viability of TV rights arrangements.

It has been pointed out that the premier league now has TV rights deals worth £1.1 billion over the three years 2001-04. That was negotiated in 2000 and it is worth repeating the comments of Mario Monti, the EU commissioner for competition, who said that the deal was illegal, anti-competitive, consumer-unfriendly and tantamount to price fixing. That displays some of the grave concerns in the minds of many people involved in football. I suspect that it would be difficult for the Commission to row back entirely from those comments when it comes to doing what it believes is right for football in the United Kingdom.

The collectivity and exclusivity of the deal that is now on the table offends many, but it is in the nature of organising a league that there will be some collective TV and other rights; that will lead to some collusion. A number of speakers have rightly pointed out that, in the past, the OFT and, more recently, the Commission have failed to understand the grass roots of the game and the way in which the economics of football operate. On this point, I agree with the hon. Member for Leigh and the Liberal Democrat spokesman that the Commission’s attack is focused on broadcasters rather than the game, but I am afraid that there will be collateral damage for many of our football clubs if an arrangement is made that penalises broadcasters and results in much less money coming into the national game. We must keep an eye on how that pans out.
Looking to the future, I hope that the Minister will give at least some details of her thoughts, not just on the football industry – which is close to many hon. Members’ hearts – but on one or two of the direct competition points. Clearly, the Government’s competition policy has been open to question. I sat on the Standing Committee that considered the Enterprise Act 2002 and it became clear that there was a division between competition policy in many European countries and that adopted for many decades in the United States. There was an implication that the Government were beginning to look towards the US model. I would not necessarily find that objectionable, but there is grave concern that if there is no certainty about where the Government’s competition policy is going, it might be difficult for them to represent the interests of football in the way we would hope.

Part of the premiership deal has been to give 5 per cent. of the TV money to the grass roots of the game. There is concern that the European Commission could find itself similarly bought out with, in effect, some sort of tariff, with BSkyB and all the other operators paying to avoid a further investigation. However, football’s role as a social, sporting and cultural part of our way of life is still firmly in place, and one hopes that TV money will continue to support that in whatever framework is put in place with a new deal.

I can understand why Governments of all colours have steered clear of getting too actively involved in the professional game. Immediately after the May 1997 election, the instinct of the Labour Administration was to be more actively involved, but they quickly realised the potential pitfalls. I understand from reading Tom Bower’s excellent book on the game that that was not least because one or two special advisers, such as the hon. Member for Leigh in his erstwhile life, quickly realised the potential pitfalls that would face any Government who interfered.

Andy Burnham : The hon. Gentleman talks about interference. Does he accept that the Government’s intervention led to three important developments that improved the regulation of professional football? I am referring to the Football Foundation – a result of direct intervention – Supporters Direct, which has led to 93 not-for-profit supporters trusts owning all or part of their clubs, and the Independent Football Commission, which puts pressure on the regulators to try to improve regulation and governance of the national game.

Mr. Field : I accept that, but it was certainly felt in the afterglow of May 1997 that the Government might try to interfere not only in the administrative side, but in a more fundamental way. It is fair to say that after the Bradford fire in 1985 and the Hillsborough disaster in 1989, enormous amounts of public money went into the football industry; it would be wrong to assume that all that money could somehow be spent without a quid pro quo. It is understandable that the Government will feel that if the national game has had hundreds of millions of pounds of public money spent on it, it needs to get its house in order as far as possible. The Nice declaration recognised the uniqueness of sport as a whole and, although the European Union has little direct competency in this regard, it reflects, at the highest professional level, a not insignificant part of economic activity.

I know that the Minister will want to sum up all the contributions that have been made, but I should like to ask her two questions. First, in pure competition terms, how do the Government intend to defend the UK football industry, if at all, against the threat to its autonomy posed by the competition commissioners today and, potentially, at some future point?

Secondly, in view of the divergence away from the European model of substantial dominance being the test and towards a more US-type competitiveness test, as espoused in the Enterprise Act 2002, what is the Government’s general strategy on interference in football and, indeed, other industries? Is it enough to leave it to the free market or, given the deep-rooted community concerns in football, will the Government seek an accommodation with the premier league and smaller professional clubs beforehand?