Michael Adam: An open goal? The Government’s football review – and why it matters.

19 May

Michael Adam is a former Conservative Councillor in Hammersmith & Fulham (2002-2018). He represented the council in its discussions with Chelsea FC over stadium expansion and has also arranged the funding of new stadiums.

Football supposedly encompasses different opinions, but the news that twelve of Europe’s leading clubs intended to establish their own elite competition united the UK Government, Parliament, media, players, fans’ groups and even the Football Assocation’s royal patron in opposition to the move.

The outcry became a global news story. Within 48 hours, the plan was dead in the water as, first, the six Premier League clubs and then three of the European clubs backtracked and withdrew from the venture.

The Super League closed shop was unacceptable for three main reasons.

It broke the key principle of the footballing pyramid that teams go up and down based on performance.  It would have destabilized domestic leagues by exacerbating income disparities. And it overrode the wishes of fans, who demonstrated in their thousands to keep their “cold Tuesdays in Stoke”.

The firestorm set off by the Super League demonstrated again that “out of all the unimportant things, football is the most important”. As such, the Government’s announcement of a root and branch review of football in England, led by Tracey Crouch, the former Sports Minister, is full of political implications, and offers opportunities and challenges to the Conservative Party, especially in former Red Wall areas.

Here is a test of how well the Government can strike a balance between retaining the market-friendly environment which has created a global leader in the Premier League, protecting historic clubs as the focal point of local communities and listening to the concerns of supporters, many of whom feel disrespected as “legacy fans” from the age of terracing and stale pies.

So: what should be on the policy agenda?  The review has three strands: financial sustainability, ownership and governance, and the fan experience.

Discussions about football sustainability will explore how more income can be shared with the lower leagues and the grassroots game. Many clubs existed at the margins of viability even before Covid. For them, the loss of matchday income during the pandemic has been devastating.

Last week’s three year extension of the Premier League’s £4.8 billion UK TV rights deal included an extra £100 million of trickle-down funding, but there is a systemic issue here which won’t go away. Another source of funds could be a levy on fees paid to players’ agents, which now total over £250 million a year.

Also up for review will be the so-called parachute system, whereby Premier League clubs relegated into the Championship receive payments for several years to cushion the financial blow. This is seen to distort competition and induces reckless spending by rival clubs. Reducing parachute payments and spreading income more evenly across the Championship may form part of the solution.

In return for increasing solidarity contributions, Premier League clubs are bound to insist on more stringent financial monitoring to prevent mismanagement in the lower leagues, where to be fair, there have been plenty of past examples.

Any attempt to introduce a formal salary cap would be highly contentious and possibly illegal. Limiting total player wages to a maximum percentage of a club’s turnover is more realistic and builds on current best practice. The argument against such a restriction is that it stifles competition, preventing a club going up to the next level. In this case, the rules could allow a limited amount of extra spending, provided it is funded by the owner’s equity rather than bank debt, or shareholder loans. After a transitional period, the increased outgoing in player wages would need to become self-sustaining, or scale back.

Another idea worth considering might be a hardship pool, available to save a club faced with extinction. Such a facility would need to come with strings attached, but the loss of Bury’s 125-year-old Football League club must have left many supporters thinking: “what if this happens to us”?

In terms of ownership and governance, capital injected by an influx of foreign owners, together with a relatively equal sharing of TV income, has been crucial to the Premier League’s global success. Most clubs also operate foundations doing excellent work in local schools and communities. However, alongside these positive aspects are too many examples of poor stewardship, disastrous mismanagement, and a contempt for fan opinion, especially in the lower leagues.

There has been much talk of introducing the German style “50+1” ownership model, whereby fans own the majority of a club’s shares, but this may be impractical, given the market value of the largest clubs. However, insisting on board representation for a democratically elected supporters’ representative is viable and should promote better transparency and two way communication.

Another possibility would be to grant a golden share to an official supporters’ trust, which would need to approve existential proposals such as a change of ownership, relocation of the stadium, changes to the club badge or team colours etc. It is no accident that the leading German clubs rejected invitations to join the Super League, as the proposal would never have been approved by their fans.

A sensible measure to improve governance would be to strengthen the “fit and proper” person test for new owners and to make it an ongoing obligation, allowing the League to withdraw its licence if there are fundamental breaches of the rule book.

Whether The FA and the football leagues are the best parties to implement and supervise these reforms, or whether a new independent football regulator is required (as recently advocated by Gary Lineker and Gary Neville) is an open question which will form a key part of the enquiry.

Issues around the fan experience are likely to include discussion on ticket prices, particularly for away supporters and how to encourage a younger and more diverse supporter base.

The timing of matches around TV schedules is another point of friction, coupled with a lack of coordination around public transport services.

Whilst 1980s style hooliganism is thankfully a thing of the past, discriminatory abuse in and around grounds still exists, despite clubs’ best efforts to stamp it out.

The impact of modern, all seater stadiums cannot be overestimated in making football a family friendly space, but “safe standing” areas have been implemented in many countries, such as Germany, and would make a real contribution to improving stadium atmosphere.

It will also be interesting to see whether the review is brave enough to touch the live rail which is the future of Wembley Stadium, and the question of whether some England fixtures and FA Cup Semi Finals should revert to being played outside London.

In conclusion, the forthcoming review is a response to the most controversial episode in football for decades. Boris Johnson’s threat to drop a “legislative bombshell” to prevent the breakaway, together with opposition from English fans, were the decisive factors in the Super League’s implosion. No-one would have predicted the events of the last month, but a generational opportunity now exists to improve the financial sustainability and governance of English football and to address the disillusion of supporters. This is a great political agenda for a Conservative government to do the right thing for the game, the right thing for fans and the right thing for local communities.