In Detail, In Brief: Ensuring the future and financial sustainability of English football

Last week in Parliament the next step was taken to introduce formal regulation of English football, as I joined other MPs in supporting the Football Governance Bill.

Football is the beating heart of our communities and one of our country's greatest exports. English football leads the world through the Premier League, and local clubs are crucial pillars of their local economies with hundreds of thousands of people attending every week and enjoying our national game.  

In many cases, clubs do more than just entertain fans. We are fortunate in south Bristol to have the Robins Foundation, a fantastic show of how football in Bristol supports good causes across our communities: for example, their recent investment to secure the future of Filwood Playing Fields.

Despite this critical role in their local communities, since 1992 more than 60 clubs have fallen into administration. In recent times, fans of Bury, Macclesfield Town, Wigan Athletic, Bolton Wanderers, Derby County, and now Reading have seen their clubs in crisis.

Fans of Bristol City remember the sacrifice of the Ashton Gate 8. More than forty years on, the underlying problems remain.

That is why Labour, opposed by Reform and the Tories, is acting to safeguard the future of football and keep it a game rooted in the local community with the interests of fans at its core. 

 The key thing that has changed is the overwhelming financial mismatch between the Premier League and the 72 clubs in the English Football League. Despite their massive revenue, in 2021 twenty European clubs including Arsenal, Manchester City, Manchester United, Tottenham, Chelsea and Liverpool sought to create a breakaway league.

Thanks to overwhelming opposition from fans, the FA and others this plan soon fell apart. However, it forced the then government into action, leading them to establish the Fan Led Review.

This recommended that an independent regulator for football finances should be established, and that is what the Football Governance Bill will deliver.

The new independent regulator [IFR] will be tasked with key objectives, ensuring the sustainability of both individual clubs and the overall football pyramid as well as protecting the heritage of local clubs.

It will be able to block the sale or relocation of any stadium, stop English clubs joining breakaway unsanctioned leagues and creating a new owners’ and directors’ test to make sure club custodians are suitable, and their finances are sustainable. It will require clubs to consult with fans on ticket prices, any changes to club colours or emblem though representative groups of fans. Many clubs already have such structure in place, or are in the process of setting them up.

Crucially, it will now be able to consider parachute payments by the Premier League when it looks at the overall finances of the game.

These payments are intended to offset the financial impact of a club being relegated from the top flight.

But instead of being a parachute, these payments are acting more like a trampoline, bouncing clubs who receive them straight back into the Premier League.

Two of the three clubs promoted from the Championship to the Premier League in each of the past 7 years have been in receipt of a parachute payment, and non-parachute clubs are increasingly competing for just one promotion place, often gambling their financial viability in the hope of success.

If the Premier League and the English Football League fail to come to an agreement on future financial distributions, then the regulator will have powers to intervene.

The new regulation won’t stop Bristol Rovers getting relegated or guarantee Bristol City’s promotion to the Premier League.

However, it will protect against poor ownership, help make the whole football pyramid competitive and ensure that fans are at the centre of our national game.