Football encourages too many clubs to ‘get rich quick’. This must stop
The new regulator needs to address rules that encourage short-term thinking and makes poor clubs poorer
For years, fans have felt increasingly shut out from what is happening to their football clubs. From the extraordinary Super League debacle to the litany of football clubs that have gone out of business in the past two decades, pressure has been mounting for a root-and-branch overhaul of the way English football functions. In recent years we have seen countless protests by fans against owners who only care about the bottom line, against unethical takeovers by dubious foreign oligarchs and regimes, and most importantly against the detrimental impact this kind of arrangement, which is primarily focused on the interests of shareholders, has on local communities. We have long needed an injection of democracy into our national game, and some serious, systemic changes.
In light of this, the government established a fan-led review, which has been running since April this year, talking to representatives from more than 130 football clubs. Fans from up and down the country have had their chance to speak up. It is a welcome attempt to redress the balance, and put the interests of ordinary football fans back at the heart of decision-making. Last week it published its long-awaited findings, which the review’s commissioner, Tracey Crouch MP, promised would establish “a long-term sustainable position for English football”. While there is clearly work to do, overall the review sets a clear path towards a better-governed game for generations to come.
The review recommends increasing fan representation on matters relating to club governance, which I welcome – but the measures could have gone further. I would like to see “full board representation”, requiring a fan on the full board of every club. This would allow a fan representative to have access to all discussions about the future of each club, giving a voice to the community in all decisions.
One of the most interesting and important of the report’s 47 recommendations is an overhaul of the so-called solidarity and parachute payments system. Clubs receive parachute payments if they drop out of the Premier League into the English Football League (EFL). Solidarity payments, meanwhile, are paid to all of the other EFL clubs, but they are significantly lower than parachute payments. As it stands, parachute payments effectively offer extra financial compensation to owners who are willing to gamble their club’s future to get into the top tier of English football – even if they are then quickly relegated – and do nothing for the majority of poor clubs that prop up the professional game. It’s almost like a form of insurance for “get rich quick” clubs, and works against sustainable investment and growth. Taken together, these payments are really nothing to do with solidarity, as they set up a perverse incentive whereby many clubs gamble to get promoted but are left in a ruinous state.
The review has confirmed that the game will finally get an independent regulator, which will oversee a new “integrity test” for owners, one that will hopefully probe both the sustainability of any ownership project and the integrity and intentions of those wanting to own clubs. I hope the regulator will also compel the Premier League and EFL to change the rules on solidarity payments, and intervene if they don’t go far enough. The FLR’s proposal is that a 10% levy will be paid by all Premier League clubs on transfers and redistributed to the lower leagues: a neat sleight of hand that would see a vital transfer of wealth to the grassroots game. The review calculated that this would have raised about £160m a year, based on transfers in the last five years.
It is worth emphasising how deep the inequality in English football runs. I was struck earlier this month by the poor timing of separate announcements from the Premier League: one about “improved solidarity payments”, and just a few hours later, news about a new deal it had signed for an additional US$2bn in revenue for US TV rights. These stories both landed as I attended Grimsby Town’s Friday night game against Southend United, which had been moved to that time slot to be on BT Sport: a move for which we received a few thousand pounds. While we appreciate these payments, you can see why they feel like tiny crumbs from the top table – over the course of a season, we probably receive something in the region of £40k in TV money. Quite a contrast with the billions floating around the top tier.
In her book Political Solidarity, the philosopher Sally Scholz argues that it is critical to support and find mutual respect across our economic, political and historical differences if society is to function for all, as well as to give people the ability to take up roles of leadership in our communities at every level. Solidarity is not just concerned with the distribution of material goods and wealth – it only really makes sense when paired with the idea of wider social justice. As Scholz puts it, this means “a willingness to share the risks that comes with social relations … to help carry each other’s burdens”.
It feels like we need more of this at the moment. While on the whole, global standards of living have increased massively in the past 100 years, relative inequality matters not just on a moral level but also because it can create political instability. We need to recalibrate the narrative and purpose of the economic system we are operating in order to make it fairer for all involved. Which is why we I believe we need both greater solidarity payments from the Premier League and a wealth tax specifically related to the government’s levelling up agenda. In the same way that some clubs benefit from the stratospheric TV revenues associated with the Premier League while others struggle, we know that many asset-rich people have increased their net wealth during the period of Covid while others have lost their livelihoods.
I have spent the past 25 years working in the technology sector as an entrepreneur, and most people I know involved in technology businesses have seen their assets increase during the pandemic. Maybe not to the degree of Elon Musk and Jeff Bezos, whose wealth has doubled since the start of the pandemic, but still – those sitting on property assets or active in the public markets have failed to show real solidarity with those out there in the streets and in homes across the UK for many of whom real wages and income have declined over recent years. How many in the top income and asset brackets are prepared to contribute to a time-bound wealth tax to support the vital “levelling up” work that should be announced by Neil O’Brien MP and his team before the end of this year?
As a society we are all in it together, whether we like it or not, and we need to stand together to ensure prosperity and progress is attainable for everyone, not just elites. True solidarity is not just about a financial gesture but about what is fair – both in football and in society at large.
Jason Stockwood is a technology entrepreneur, visiting fellow at the University of Oxford’s Blavatnik School of Government and chairman of Grimsby Town FC
