Reforming British Football: An Independent Regulator to Protect the National Game
Introduction
In April 2022, the British Government approved a major reform initiative for football. The reform outlines proposals for radical changes to the system of the national game. The government’s endorsement of the initiative is a positive step towards implementing meaningful change to improve the football system and its financial competency.
The reform is part of a fan led review into the financial issues that British football faces. This was instigated following the downfall of the European Super League which called for a review of the governance of the sport in the country. The Football Supporters Association (FSA) are fully supportive of the proposed changes and hope that they will help protect the national game.
What does the reform involve?
Whilst the exact details of the plans are still being finalised and are set to be outlined by the end of summer, the general principles, motivation, direction and policies behind the reformation have already been established. The changes have several main aims:
- Protecting the heritage and history of British football clubs
- Addressing the distribution of wealth throughout British football
- Increased fan engagement policies for club owners and directors
- Enhancing financial competency and sustainability One of the most significant changes is the introduction of an independent
regulator to monitor the financial situations of clubs. The independent regulator will now oversee English football, rather than the Football Association, Premier League or English Football League conducting their own tests and having responsibility for ensuring appropriate financial conduct of clubs.
As well as an overhaul in the financial protection measures for English Football League clubs; integrity tests and due diligence policies for club directors and owners will be used. The hope of increased scrutiny on club board members is that it will prevent situations where clubs have been financially damaged by irresponsible ownership and directorship. Part of the change in approach towards club owners is to also include measures that require board members of clubs to engage and interact adequately with fans. The policy will create greater transparency of clubs and improve relationships between fans and boards.
The overall effect of the reform will improve the general health of British football through greater financial suitability of owners and more sustainable sources of funding and expenditure. The fans will become a more significant factor for clubs and can hopefully be seen as working alongside the board to improve their club.
Why is this needed?
The Premier League maintains that it is conducting its own adequate reviews of its owners and directors tests and improving the input that fans can have on their own club. However, the introduction of an independent regulator will ensure that a non-biased and efficient system becomes the norm.
The regulator will also assess the financial side of the game. The current state of British football rests upon a flawed financial system. The new changes will help overcome the shortcomings of the current financial management. Part of this will involve the Premier League supporting the English football pyramid and redistributing its wealth by contributing to the lower divisions.
The current situation involves 16% of the Premier League’s TV and Broadcasting rights income being distributed amongst the lower leagues. The Premier League claims that they have paid approximately £1.3billion since 2019. The new reform is calling for this to be raised to 25% although it is more likely that an agreement will be made at a compromised figure between the two. Those in charge of the reform are currently in discussions with the FA over the exact details of redistributing finances within the leagues.
One suggestion for redistributing finances includes the proposal to impose a 10% transfer levy on Premier League clubs suggested as a result of the fan led review. In other words, Premier League clubs would be subjected to a ‘transfer tax’ to be paid to lower leagues. This would make it compulsory for Premier League clubs to redistribute a percentage of transfer fees to less financially thriving clubs. The consequence of this would be increased financial support for clubs below the Premier League in the football pyramid.
The European Super League debacle marked an additional worry for British football. The new reforms will act as a defensive mechanism against future ventures similar to the ESL. It is hoped that the system overhaul will prevent similar ventures from negatively impacting the finances of British football.
All of these changes could be necessary to try and avoid unfortunate footballing tragedies such as clubs entering administration, being irresponsibly run into the ground or, in the worst case scenario, ceasing to exist.
The Problems
One of the primary obstacles that the new reforms face is expected to be the Premier League’s reluctance to adhere to external instruction. The board of the PL favour the duties of regulation and financial management lying with the FA rather than a source independent from football. There remains hope in the possibility of open discussions and reviews of the proposed reforms gaining the trust of the league and leading to an agreement that the Premier League are happy with and will abide by the new reforms.
The most significant challenge is avoiding delays in the implementation of the new reforms. The Football Supporters Association have urged the government to ensure a fast and smooth implementation of the new policies. There is now a burden lying with the government that as long as the system is not implemented, any clubs that experience financial deterioration are their responsibility. To minimise this, any delays to the reforms should be minimised. Moreover, delays should be prevented in order to avoid the extent of the reformation being diluted and not having the meaningful impact that is desired. However, it is not as simple as just bringing the changes into force immediately. The stakeholders in British football and the government have cited this as a critical opportunity to change the sport for the better. Hence, they are cautious of finding the right balance and system. There is only one chance to get this right and transform the national game, it is not something that should be rushed and result in implementing another faulty system.
Summary
There is no doubt that a reform, to a significant extent, is necessary for British football. The implementation of an independent regulator and changes in the regulation of financial management and distribution will enhance the integrity of the game and protect clubs from drastic financial difficulties. The demand for greater transparency and fan engagement of club owners and directors is vital and long overdue. This will help repair the divisions and broken relationships between fans and boards that are currently rife within British football.
It is clear that introducing such radical change is not simple. Whilst there most definitely is a sense of urgency to implement these reforms before another iconic club succumbs to financial catastrophe, it is absolutely imperative that these new reforms are carefully refined to ensure they have the desired effect. All interested parties should help iron out the intricacies and details of the new reforms in a timely manner. The sooner the new and appropriate changes are brought into force, the sooner British football can be transformed for the better. It is an opportunity that no one wants to get wrong.
Insofar as the application of “integrity tests for club directors and owners”, what will be the criteria used? Will state ownership of clubs be prohibited when the state has a dubious human rights record for example (affecting clubs such as Manchester City and Newcastle)? And if so, would these measures be enforced retroactively, forcing these state-owners to divest themselves of these clubs (similar to what was done to Abramovich/Chelsea)? In addition to being disqualified from ownership on moral grounds, I would be in favor of prohibiting state ownership of clubs as they would have an inherently unfair financial advantage due to having seemingly unlimited funds at their disposal — contrary to the situation of non-state owned clubs.
And with regard to the “greater financial suitability of owners”, will how prospective owners come up with the funds to buy clubs be scrutinized as well? Not only as to how they have amassed their wealth, but also how they plan on financing the purchase (the way the Glazer’s bought Manchester United coming to mind: taking loans out on the club’s assets to finance the purchase and putting Man U heavily in debt in the process — when prior to the Glazer’s purchase the club had no debt). I believe that regulations should also be put in place to prevent a “Glazer-type” purchase in the future as it places a great financial burden on the bought club from the onset.