The Over-Regulated Game
Ben Young, Intern
20/11/2024
England’s footballing pyramid is the envy of the world, and the upcoming Football Governance Bill, which will establish an independent football regulator (IFR), is necessary. With its deep history and structure, English football will benefit from financial safeguards, and measures to prevent collapses, like those of Bury or Macclesfield, are essential.
However, there’s a delicate balance between preventing failures and imposing financial restrictions that could harm the game’s competitiveness. Like it or loathe it, money impacts football, and the Bill risks causing a capital flight that could hurt clubs across the pyramid aspiring to reach the Premier League.
The Bill, introduced after the European Super League’s failure and the Fan Led Review, aims to enhance financial sustainability, resilience across leagues, and protect football heritage. Labour recently amended the legislation, adding an Equality, Diversity, and Inclusion (EDI) requirement and removing the mandate for takeover decisions to align with government foreign policy. However, concerns remain over two financial restrictions on clubs advancing through the ranks or aiming for the top.
The first is the mandate for “effective engagement with fans on ticket prices.” The flaw here is that fans already influence pricing through their attendance. Rising dissatisfaction among Premier League and EFL fans over high ticket prices, inconvenient kick-off times, and revenue-driven tactics has led to boycotts, such as Aston Villa’s fans’ protest over £85 Champions League tickets. Premier League popularity could suffer if clubs disregard these issues, but a government-mandated consultation won’t necessarily bring clubs closer to fans. Less dedicated fans will simply not go or give their money to a cheaper, friendlier, lower league club.
More concerning are the IFR’s “backstop powers” to enforce a financial settlement if the Premier League and EFL cannot agree on revenue redistribution. Labour’s amendments expand these powers to include control over parachute payments, which support relegated Premier League clubs but are highly contentious. The EFL advocates scrapping these payments to level the playing field and let more Premier League profits flow to lower leagues.
The separation between the Premier League and EFL will restrict the IFR’s effectiveness, but its backstop powers could overly limit clubs’ freedom to operate in what is ultimately a free market. Significant funds are already shared across the pyramid; for example, £103 million was distributed to 155 clubs below the Premier League in 2020/21 through solidarity payments. The EFL, a crucial incubator of talent, has every right to negotiate for more.
However, the Premier League attracts global audiences because of its star quality, which generates higher revenue that’s reinvested into the league and subsequently the pyramid. Numerous clubs have reached the Premier League through smart investments and talent development, without parachute payments.
While the IFR should promote financial stability, granting it powers to radically re-distribute finances risks overstepping the necessary. It could also put off possible investors, deeming English football no longer worth the effort or cash. The knock-on effect will hit communities who benefit from significant regeneration investment from club owners, and risk decay of English football’s quality. The current state of play is not perfect, but credit needs to be given to the Premier League and many club owners across all divisions for constructing the architecture behind a world-leading sports and entertainment product.
Labour must tread carefully in reforming England’s football governance and financial structure. The Premier League’s phenomenal growth story—built on entrepreneurial freedom—has transformed British sports, achieving success without heavy regulation. The IFR must perform flawlessly to avoid frustrating large fan bases, who also should not be overlooked as voters, often overwhelmingly from working-class communities. Despite its independence, the IFR will be labelled as “government intervention” in the press, so caution is needed in granting it powers that could reshape football’s financial model. Most football fans aren’t interested in the complex backstage workings of the beautiful game and making them aware of it via forceful intervention won’t win the Government any favours.
There are clear benefits to the Bill and the IFR. However, unwarranted government intervention could be troubling for clubs at the pyramid’s upper levels. Football holds a special place for many fans, but that doesn’t mean it requires unique legislation. With Labour’s majority and rare cross-party support, the Bill’s passage is certain, meaning the regulator will soon become a reality.
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