England Football Regulator Aims to Stop New Super League Rebels

(Bloomberg) — England’s men’s professional football clubs will be overseen by an independent regulator in a bid to ensure financial security, with tougher ownership criteria and rules to stop teams joining breakaway competitions.

The UK government will unveil a policy paper Wednesday laying out major reforms to governance in the country’s top five football leagues. The Department for Culture, Media and Sport said it wants to hand more power back to fans and play a part in distributing television money widely down the football pyramid.

A government statement avoided any mention of rules that could hinder what critics have termed “sportswashing” — an attempt by investors to deflect attention from poor human rights records.

Last year, Saudi Arabia’s sovereign wealth fund bought Newcastle United FC, while a Qatari investor is currently bidding for Manchester United in what could end up being the biggest ever deal for a sporting franchise. 

The new regulator will implement a licensing system for clubs ranging from global powerhouses in the 20-strong Premier League, to 72 sides playing in the Football League and 23 in the National League, England’s fifth division. 

Licenses will require clubs to demonstrate sound financial business models and good corporate governance, the government said. Fans will be handed a greater say in the strategic running of their clubs, with regulator approval needed for any sale or stadium relocation. 

The plan — broadly backed in advance by smaller clubs and fans — received a cautious welcome from the Premier League. 

“It is vital that regulation does not damage the game fans love to watch in the deepest professional pyramid in the world, or its ability to attract investment and grow interest in our game,” the league said in a statement.

“We will now work constructively with stakeholders to ensure that the proposed government regulator does not lead to any unintended consequences.”

On the Brink

In the wake of an abortive attempt by six Premier League teams to join a breakaway European super league, the regulator will also have powers to stop teams from joining new competitions that do not meet a predetermined criteria, in consultation with the English Football Association and fans.

The collapse of historic clubs such as Bury FC and Macclesfield Town in recent years prompted a government-backed review of English football led by lawmaker Tracey Crouch, a former sports minister.

The opposition Labour Party criticized the “wasted” years between Crouch’s report and Wednesday’s announcement. “Fans are desperate for a say on the future of their clubs and the game. We can afford no further delay,” said shadow cabinet member Lucy Powell.

Despite huge wealth at the top of the game, many English clubs continue to live beyond their means. The combined net debt of clubs in the Premier League and Championship reached £5.9 billion ($7.1 billion) by the end of the 2020-21 season, the government said. Further down the divisions, Southend United FC of the National League faces a winding-up petition at the start of March over unpaid tax bills. 

Christina Philippou, principal lecturer in accounting, economics and finance at the University of Portsmouth, said a number of clubs in England’s five professional leagues continue to operate on the brink. “The hope is that this focus on financial sustainability throughout the professional pyramid will help recalibrate the competition for spending beyond clubs’ means to more sustainable levels,” she said.

The Premier League is currently discussing a redistribution of TV monies with the leagues below it. If football authorities cannot reach this agreement on their own, the regulator would have targeted powers of last resort to intervene, the government said.

Support for a regulator from outside the Premier League reveals the system is broken, Philippou said. “Because nobody ever really wants to be monitored, do they?”

–With assistance from Ellen Milligan.

©2023 Bloomberg L.P.

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