§ '.—(1) Any agreement to which this section applies shall be an excepted agreement for the purposes of Schedule 3 to the Restrictive Trade Practices Act 1976.
§ (2) This section shall apply to any agreement by or among persons engaging in or conducting the professional team sport of association football, or any other professional sport which the Secretary of State may separately by regulations prescribe, by which any constituent league or other body in that sport sells or otherwise transfers all or any part of the rights of that league's participants in respect of the broadcasting of games engaged in or conducted by those clubs in events organised by such a league or other body.
§ (3) The power to make regulations under this section shall be exercised by statutory instrument and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament'.— [Mr. Mellor.]
§ Brought up, and read the First time.
§ Mr. David Mellor (Putney)I beg to move, That the clause be read a Second time.
§ Madam Deputy SpeakerWith this, it will be convenient to discuss amendment No. 146, in schedule 7, page 155, line 3, at end insert—'Restrictive Trade Practices Act 1976—
24A. In Schedule 3 of the Restrictive Trade Practices Act 1976 there shall at the end be inserted—"Agreements for broadcasting of association football or other prescribed sports10. This Act does not apply to an agreement falling within section (Application of Restrictive Trade Practices Act 1976 to sale or transfer of broadcasting rights for sports events)of the Broadcasting Act 1996".'.
§ Mr. MellorI, too, do not wish to detain the House too long, so I shall be brief. I do want to say, however—I hope without any self-aggrandisement—that brief though my contribution and the debate may be, it raises an issue of fundamental importance to the coverage of televised sport in Britain. I am strengthened in that belief by the fact that one of the attractive features of our debates on broadcasting is that it is possible for us to set to one side the narrow partisanship that has figured in so many debates in this place and to talk together as sensible, reasonable adults, sharing our interests and experience of the world.
Many hon. Members present today are deeply committed to sport. I am proud, therefore, that my co-sponsor of the new clause should be the hon. Member for Kirkcaldy (Dr. Moonie), and to see others in their place, such as the hon. Member for Bassetlaw (Mr. Ashton), a director of Sheffield Wednesday, who understands from his own practical experience of football in just what a curious situation we find ourselves, with the threat of what I regard—I speak without any exaggeration from 11 years' experience as a Minister and nearly 20 years in the House—as the most foolish intervention by a regulator that I have ever encountered.
That intervention is the decision of the Director General of Fair Trading to refer the right of Britain's Premier league collectively to sell its television rights to a 756 television station. That has nothing to do with the merils of Sky against the BBC or ITV; it is to do with the fundamental right of sports organisations to band together in a league to sell their product collectively as the only way of making sense of the ability to televise, for the enjoyment of a wider public, the games that they play.
We have a situation that Alice in Wonderland would have difficulty embracing. Lewis Carroll at his most fanciful could not have imagined the situation that rosea in last night's debate on sports rights, in which my hon. Friend the Minister of State properly said that the basic principle must be that sporting bodies have a right to sell their broadcasting rights to whomsoever they choose.
We have chosen—I approve of this—to trench on that right by having the crown jewels of sport. I warmly endorse, and was one of those who worked for, the further changes that are now part of the Bill. But how can the sincere and proper words of my hon. Friend the Minister of State sit with the ludicrous situation of a regulator, who is part of the Government machine, condemning the Premier league for doing precisely that?
Again, this is a moment that Lewis Carroll would appreciate. At the same time as politicians are condemning the Rugby Union for doing exactly what the Director General of Fair Trading wants, the director general is trying to translate the chaos that currently exists in international rugby union into the world of football.
What is the nub of the point that lay behind all the condemnatory words that were said yesterday about the Rugby Football Union? It is that the English Rugby Football Union has chosen to break away from the other four and to sell its television rights. It has said, "To hell with the rest of you; we are having our own deal." The response to that will be, "In that case, you don't play in our league." There is then chaos, confusion and anarchy.
In order to prevent that in Britain, for years now, long before the formation of the Premier league, the Football League had the right, and the Premier league asserts the right, to say, "Here is our fixture list. These are available for television transmission and we have the right to sell fixtures collectively." It is not as though it is a cartel. Teams remain at the top not because they choose to do so but because their results entitle them to do so. Over several years, the membership of the league changes, so it is not a cartel.
Here we have a curious situation. In the United States, under anti-trust laws, American regulatory authorities are restricted from taking nominated sporting leagues to task for selling their product as an entire package. Everyone knows that unless that happens, chaos and confusion will be the inevitable result.
If Manchester United has its own television contract and Chelsea has another, how on earth will fixtures between Chelsea and Manchester be managed if one says that its television contract gives its company the right to transmit a service and the other says to the contrary? That would be ludicrous. I cannot imagine how even some pointy-headed quasi-intellectual in the Office of Fair Trading could seriously believe that that lies within the world of practical reality.
The tragedy is that that threatens football's future just: at a time when a situation for which we have all prayed has begun to happen: football has at long last managed to win through, to get resources flowing into the game and. to bring in on the back of those resources international 757 players so that, for the first time in the experience of football spectators, great players from the continent are playing in our league rather than avoiding it like the plague. We are net importers of players, not net exporters. Every club benefits.
Last season, the distribution of the spoils from television coverage showed that although Newcastle walked off with just over £3 million and Manchester United with just under £3 million, the relegated clubs did well too—Queen's Park Rangers received £1.3 million and Bolton Wanderers received £1.2 million.
In selling the product as an entire package, the Premier league insists, first, that a highlights package is available on BBC—it is one of the most popular weekend programmes—and, secondly, that those who win the right to show live matches must show a minimum of three games featuring each team in the league. Otherwise, only the most fashionable clubs would have a television contract and the rest would have nothing, making it impossible to spread resources sensibly through the game.
I shall not detain the House long as the facts speak for themselves, but I should like to make a couple of points in conclusion. First, I hope that the restrictive trade practices court will reject the proposal with contumely. Every time lawyers are dragged into the matter, there are expenses. I know that I am a devil denouncing sin, but from practical experience of sin I should say that the Premier league confidently anticipates that it will have to spend some £2 million to £3 million on legal advice even if the proposal is rejected.
5.30 pm
I am glad that hon. Friend the Minister for Science and Technology, for whom I have the highest regard, has returned to his place. Events of the past few weeks have shown that the world of football is not to be trifled with; it commands a good deal more support than many Government Departments, whoever manages them. The suspicion remains that if the Department of Trade and Industry had taken a firmer line with the Office of Fair Trading this nonsense may have been avoided.
When the Department of Trade and Industry presented a public face in the world of football, the special adviser charged with meeting representatives of the Premier league sounded like a crazed ideologue even beyond my understanding of the furthest, most exotic fringes of the right wing of the Conservative party. Such people should be suppressed. They simply reduce confidence in the Government at a time when confidence should not be further diminished, at least in the interests of Conservative Members.
The Department of Trade and Industry should have stamped on all this nonsense. It is absolutely clear that if that nonsense had the force of law it would totally destroy our great national game and the pleasure that millions of people derive from it. I wish to give my hon. Friend the Minister of State, Department of National Heritage—a Department whose understanding of broadcasting may be more profound than that which prevails in the Department of Trade and Industry—the opportunity to say what the Government really think about it. That is why I took the liberty of proposing the new clause today.
§ Mr. AshtonThe right hon. and learned Member for Putney (Mr. Mellor) made an excellent speech. I should 758 like to support him in slightly more detail, although I shall not detain the House long. I should declare an interest as a director of Sheffield Wednesday, although that job is unremunerated. Nevertheless, the club has an interest in these matters.
The Sky package deal that ends next season is fairly clear. Sky shows 60 games a year, which guarantees that at least three and probably four games of each club are televised. Under the old system operated by the BBC and the ITV companies, many first division clubs such as Sheffield United or Oldham never appeared on television. Now, each club is guaranteed a fixed number of games, even if they are shown on a Sunday or a Monday. Cash is paid for each place in the league, so that the bottom club gets £50,000, the next one gets £100,000 and so on. Obviously, clubs at the top of the league such as Manchester United and Newcastle make a great deal more money than others, but that is acceptable to every member of the league.
Some of the cash that has been negotiated under the new deal will be spent on coaching. Local Football Association bodies have been told that someone who cannot afford Sky can at least see the BBC highlights on Saturday night. Clubs receive a relatively small fee for that. My right hon. Friend the Member for Copeland (Dr. Cunningham) and I watched Sheffield Wednesday play Newcastle. The game was shown on "Match of the Day" for 25 minutes, yet each club received only £7,000. The BBC paid £1 million a hour for "Pride and Prejudice", which had a far smaller television audience, so the value for money that football provides for sports fans and for the BBC is absolutely clear. It is an excellent scheme that has worked well for three or four years.
Now, however, the cable operators have had a different idea. Instead of negotiating a package deal with Sky, they want to negotiate separate deals with individual clubs. Obviously, the deal that they will negotiate with Manchester United or Newcastle will be far more valuable than the deal with Sheffield Wednesday or Wimbledon, but what will happen when two differently ranked teams play each other? The cable operators will not explain the position, but there will obviously be chaos. It will not work out.
To the astonishment of everybody, the then Director General of Fair Trading, Sir Bryan Carsberg, who was about to retire, objected to the Sky deal. Everyone thought that it was one of his enthusiasms, but his concerns were echoed by his successor, Mr. John Bridgeman, who referred the matter to the restrictive trade practices court and asked it to examine whether the Premier league—not just the deal with Sky, but the rule book as well—was operating as a cartel. If the restrictive trade practices court rules that the Premier league and other leagues are operating as a cartel, football on television will be plunged into chaos.
That will affect not only the clubs, but the players. The players' union has agreed with the clubs that, unlike politicians, who sometimes get paid for appearing on television, players will not receive individual payments for television appearances. The players have agreed to accept a percentage of the Sky money that goes to the clubs, and that money goes to the players' union. It is used to train players, to pay for their university education when they finish their football careers or to help players who suffer a serious injury and have to retire from the game at 23 or 24. It is used for beneficial purposes.
759 If the copyright belonged to the player or the player's agent, an agent could say, "You cannot show the goal of the month without paying Cantona £1,000 and a repeat fee of £250 every time it is shown". The goals in the UEFA tournament could not be shown at any other time without constant repeat fees having to be paid, just as Andrew Lloyd Webber receives royalties every time anyone plays his music. It would be an absolute shambles. Unless the Government examine the clause carefully, the entire system will be thrown into Hollywood-type negotiations.
As the right hon. and learned Member for Putney said, football is now a great worldwide business. I accompanied Mr. Rick Parry, chief executive of the Premier league, to the Department of Trade and Industry—with respect to the Minister of State, Department of National Heritage, it is also a matter for the Department of Trade and Industry.
The Minister for Competition and Consumer Affairs was most sympathetic. We pointed out that the President of the Board of Trade went to China with the England team because of the trade possibilities. If England want to play Chile, Chile will play at Wembley for nothing, but will require a fee of £250,000 to play at Manchester. The reason is simple. When Chile play at Wembley, there will be exhibitions and embassies will host trade delegations. We flew a planeload of business men to China when the England team played there.
There are massive trade advantages to be gained. Sky makes deals not for fun but because they sell the game around the world. Last Thursday, a delegation from Thailand visited the Select Committee. My hon. Friend the Member for Wigan (Mr. Stott) was there. The delegation was most enthusiastic about British football.
British football is fast and exciting and everybody loves watching it on television. Other countries tend to play it like chess. They make 25 sideways passes and 15 backwards passes and bore everybody stiff. Our teams do not do that; they entertain. That is why British football sells around the world. It is a great money earner and helps our export trade. The current proposal puts all that business in jeopardy, so we are asking the Minister to accept our reasonable amendment.
The European Competition Commissioner, Mr. Karel van Miert, is strongly in favour of the existing system—the governing bodies' right to sell centrally. He is not a particular friend of British football as he opposed the Bosman regulations on player transfer deals and supported something that was not so good for football. On this issue, however, he supports the present set-up as being fair competition and in the best interests of the industry.
From the point of view of his own Department, the DTI, the Minister for Science and Technology would be well advised to discuss the new clause with some of his colleagues. He should accept, as the American sporting bodies have accepted, that a group of teams is not a cartel. Those teams compete with each other, and can be relegated. That is true of all leagues. Three teams may go down every year, and three may come up. It is not a case of a finite number of teams co-operating to extract the maximum profit; it is competition at the highest level, and as such it should be allowed to continue.
§ Mr. Brian Wilson (Cunninghame, North)I declare a modest interest, as unpaid parliamentary adviser to the Scottish Professional Footballers Association. I support 760 the new clause. I want to pick up a point made by my hon. Friend the Member for Bassetlaw (Mr. Ashton), but, before doing so, to disagree with what he said about the Bosman case. I think that its outcome was good for football.
The right hon. and learned Member for Putney (Mr. Mellor) rightly said that all teams benefit from television rights, but my hon. Friend the Member for Bassetlaw was also correct in pointing out that the Professional Footballers Association in England also benefits significantly from such rights and from the principle, established some 30 years ago, of enabling it to secure a percentage of what is paid by television companies. As a result, the association has been able to do a fantastic job for players.
We are not talking just about the big earners; we are talking about jobbing professionals at all levels of the game, most of whom do not go on to stardom, fame and fortune. After a few years, many find that their football careers are behind them. That is why the role of the players' associations is so important. They must be given the money to enable them to do their job properly, as they have been in England for the past 30 years.
I take account of the arguments advanced by the clubs, but I hope that in future the rights of players' associations to benefit from all the money that is flowing into the game will be statutorily underpinned. It would be a supreme irony if more and more money went into the game from the television companies, while the hard-earned rights that the players' associations have built up over the years were eroded by the clubs that were gaining increased funds from television rights. That is a simple point. Unfortunately, it cannot be debated in the context of a new clause that has not been selected, but I hope that hon. Members on both sides of the House will accept that, while football could arguably continue without directors or even commentators, the one group of people without whom it could not continue is the players. If all this money is flowing into the game, it is right that players at all levels should benefit through their associations.
§ Mr. Tom Pendry (Stalybridge and Hyde)Opposition Members are pleased to be able to support the new clause tabled by the right hon. and learned Member for Putney (Mr. Mellor). Along with the accompanying amendment, it exempts football—and any other sport that the Secretary of State may add—from the provisions of the Restrictive Practices Act 1976.
As the right hon. and learned Gentleman pointed out, this new clause and others result directly from the Office of Fair Trading's decision to refer the Premier league to the restrictive practices court. According to the OFT, the league is acting as a cartel in the sale of broadcasting rights. Many hon. Members on both sides of the House feel that it ignores the fact that, as my hon. Friend the Member for Bassetlaw (Mr. Ashton) pointed out, the composition of the league is constantly changing through promotion and relegation: over a five-year period, some 75 per cent. of its membership may have changed. As the Minister knows, I raised the matter with him in a letter on 15 February, in which I urged the Government to consider a measure such as new clause 24. Unfortunately the Minister was not able to respond to my request, but the House now has an opportunity to vote on the issue. I hope that it will support the new clause.
761 The OFT's decision is bizarre, and it is odd that it took it so long to make up its mind. The Premier league rules are the same as those of the Football League, which has been in business since 1888. They are also very similar to the rules of most other team sports in which a collective negotiation of television rights is at stake. God alone knows why the Premier league was picked out.
As the right hon. and learned Member for Putney pointed out, the decision will have severe consequences, not just for football but for all sports in which a governing body acts in the collective name of clubs to sell rights. I believe that the OFT is considering a further 18 such deals involving major sports. We may not always agree with the deals that are struck by those sports, but I am sure that hon. Members will agree that any change to the current system of selling rights would bring chaos to sport as a whole. The logic of the OFT's referral decision would enable individual football clubs to sell their own rights, favouring the big clubs with financial muscle to the detriment of smaller Premier league sides. The big clubs would want to sell the rights of their games, perhaps on a pay-for-view basis, making millions in the process. Smaller clubs such as my own beloved Derby County—I am pleased that my hon. Friend the Member for Ashfield (Mr. Hoon) is here, as it is his beloved club as well; it will be playing for the first time in the premiership next season—will have difficulty in reaching any reasonable deal if the legislation is passed.
5.45 pm
As I have said, the legislation will lead to chaos, not just in football but in other sports. We have all seen what has happened in the case of the Rugby Union Five Nations—or should we say Four Nations?—championship when one broadcaster has tried to strike different deals with different parties. That is clearly not a model that we would wish other sports to follow. I hope that the Minister agrees.
I shall say no more. I think that we should all speak briefly in debates such as this, given the consensus between the two sides of the House. I hope that the Minister will respond to the pleas of those who have spoken so far, and will give us some idea of the Government's thinking.
§ Mr. SproatThe whole House will be grateful to my right hon. and learned Friend the Member for Putney (Mr. Mellor) for bringing this important and topical matter to our attention. I have great sympathy with what he has said and with his intentions, and I have taken careful note of the points that he has made. I understand, and to a great extent share, the concerns that he and other hon. Members have expressed, and, in particular, his view that the current agreements operate in the public interest and are necessary in the light of the character of the services and the game involved. As he will know, however, the referral of the Premier league does not necessarily mean that all such sports agreements risk ending up before the courts. At the time of the referral, the Director General of Fair Trading made it clear that he considered that the Premier league had a major, if not unique, position in the market for television programmes, and that other agreements for the broadcasting of sport being considered by the OFT 762 were unlikely to be so significant as to warrant investigation by the court, although each was being considered on its merits.
It may offer some comfort to my right hon. and learned Friend, and to others who have spoken, if I explain that the existing competition regime includes protections against the negative effects that my right hon. and learned Friend has mentioned. When the Director General of Fair Trading identifies restrictions in a registrable agreement, he has a duty to refer the matter to the restrictive practices court. An example is the case of the Premier league's collective selling arrangements for broadcasting rights. The court will then consider whether such restrictions are in the public interest. When the parties to an agreement can satisfy the court that the arrangements are beneficial, the court may decide that the agreements operate in the public interest, and not strike them down. One way in which that may be done is by convincing the court that the restriction in question would bring specific and substantial benefits to the public. That is my personal view.
The debate has given hon. Members on both sides of the House an opportunity to make clear their belief that such an arrangement would not operate in the interests of sport. My hon. Friend the Minister for Science and Technology, who is sitting next to me, has heard what has been said, and I can tell my right hon. and learned Friend the Member for Putney that I shall ensure that the report of the debate and a covering letter are sent to the restrictive practices court, making the views of the House clear. I hope that, having been given that assurance, he will seek leave to withdraw his valuable new clause.
§ Mr. MellorI beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.