2 February 2023

After a crazy January transfer window, the case for a new football regulator has never been clearer


With a White Paper on the horizon, the case for a robust Independent Regulator for English Football (IREF) has rarely felt stronger.

While northern provincial towns such as Bury and Macclesfield have seen their clubs disappear as a result of gross financial mismanagement, the Premier League is an ever-growing embarrassment of riches. The latest Deloitte Football Money League shows that more than half of the top 20 revenue-generating clubs in the world are English. Sixteen clubs – 80% of the Premier League – featured in the top 30.

This January’s transfer window was a stark reminder, if it were needed, of just how England’s top clubs have pulled away, not just from the lower league, but from the rest of Europe. To give you some idea, Chelsea alone spent £295m on new players – more than all the clubs in Germany, Italy, France and Spain combined.

A new ‘supporters-first’ campaign powered by think-tank ResPublica, For Fans Too, believes that the IREF should have the powers to impose a new financial settlement for English football, tackling the Premier League’s current decision-making dominance. If we don’t see reform soon, the continued survival of many clubs lower down the financial pyramid is at stake.

While the term ‘redistribution’ may be a dirty word for some Conservatives, it is essential that the Government does not tinker at the edges here. If the leaked White Paper is anything to go by, we may expect a regulator to have powers to intervene and raise revenue from English football’s high-rollers. The financial sustainability of local football clubs, especially in ‘left-behind’ towns, matters – and redistributing the Premier League’s vast wealth throughout the EFL and the grassroots game needs to be part of the solution.

The EFL’s wish to have a greater share of the Premier League’s wealth is not unreasonable – the current structure of ‘parachute payments’ helps some clubs, but does little for the financial sustainability of the Football League as a whole. In some cases, the Premier League has saved considerable amounts of money as a result of relegated clubs being immediately promoted back into the top tier of English football from the Championship. 

One possible alternative to the status quo is the introduction of a 10% solidarity transfer levy, which is proposed in the fan-led review. That would have raised £160m per year in the five seasons leading up to its publication. Another option is for the new IREF to have the power to implement a levy on the Premier League’s broadcasting income, with the proceeds shared out among Football League clubs. Again, the headline numbers here are pretty mindboggling. According to The Times the Premier League’s broadcasting-related income for the 2022-25 cycle – a combination of domestic deals, international agreements and commercial partnerships – will reach a total of £10.5bn.

Of course, redistribution alone isn’t enough. The IREF needs to have the teeth to introduce robust owners’ and directors’ assessments – considering one’s financial position, past business practices and future sustainability plans for clubs. Recent English football history is littered with instances of negligent – and indeed unscrupulous – ownership and directorship. This includes the Blackpool FC’s torrid experience with the Oyston family. An obscenely nepotistic enterprise, the High Court ruled in November 2017 that the Oystons operated an ‘illegitimate stripping’ of the club following its lucrative debut season in the Premier League in 2010-11 – paying out £26.77m to companies they owned. 

At Championship club West Bromwich Albion, controlling shareholder and chairman Guochuan Lai has yet to repay a £5m loan he took out of during the Covid-19 pandemic to prop up another of his businesses. However, this did not stop the club agreeing a £20m loan from American investment group MSD Holdings in December 2022 – which will be secured against the club’s assets including The Hawthorns stadium and the training ground, as it pushes for a lucrative return to the Premier League.

Meanwhile, non-league Scunthorpe United FC – a club which gave two-time Ballon d’Or winner Kevin Keegan his first professional contract – witnessed a period of hefty spending under the ownership of businessman Peter Swann. Under Swann’s tenure, wages exceeded income in every season. With annual operational losses climbing as high as £4.5m in 2017-18, the club was presented with a HMRC winding-up petition. After a decade at the helm, Swann has now been replaced by former chairman of Ilkeston Town David Hilton.

These examples show that the existing system of self-governance is simply not fit-for-purpose – and working-class fans in many of our provincial communities continue to pay the price. If the Government is still committed to levelling up (or whatever they’re now calling it), creating a new independent regulator which recognises the importance of smaller clubs would be a big step forwards. With their rich heritage and traditions, they should not be reduced to becoming the playthings of reckless and irresponsible owners – they must have responsible custodians regulated by an independent body, along with the kind of financial redistribution that would give smaller clubs some hope of competing against the Premier League Goliaths.

It’s no exaggeration to say that without these changes, we risk more clubs going under, and with them the source of tradition and civic pride that mean so much to so many people in this country.

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Dr Rakib Ehsan is an expert in social cohesion and institutional trust.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.