In 1997, Brighton & Hove Albion were one goal away from being relegated from the very bottom of the English football league. In the same year, financial circumstances forced them to share a ground – a former zoo – with Gillingham FC, 110km from home.
Today, Brighton are seventh in England's Premier League, on the cusp of playing in European competitions and have beaten Manchester United twice this season. Gillingham are 19th in the bottom league.
Those quirks of fortune, pundits suggest, are what makes English football, and the Premier League in particular, so enticing. If it ain't broke, don't fix it, is a popular axiom. But inside the top tier of the English game fears are running high that their golden goose could be cooked by new legislation.
Regulator remit
The Football Governance Bill, which last week passed through the House of Lords, will establish a new Independent Football Regulator (IFR) for English men’s elite football. It is intended to have operational independence and accountability. The government hopes it will put fans back at the heart of the game, protect against rogue owners and put clubs on a sound financial footing.
It will have three primary objectives:
- Club financial soundness – To protect and promote financial sustainability of regulated clubs, ensuring they take sensible financial decisions and consider the long term when taking risks
- Financial resilience – To ensure that systemic risks and structural issues like the distribution of revenue through the league pyramid are managed appropriately
- Heritage – To safeguard the traditional features of English football that matter most to clubs' fans and local communities
Those in the lower leagues argue that the riches need to be more evenly distributed, to help feeder and community clubs thrive and survive. Without them, they argue, there will be no next generation of players.
But those in the Premier League are deeply concerned that their income and ambition could be strangled by the new regulator. What is at stake is a global phenomenon, the most-watched sports league in the world, broadcast in 212 territories with a potential audience of 4.7 billion people. It also attracts a lot of money: £4 billion a year in television rights alone. The league's wealth is such that it contributes more than £8 billion a year to the UK economy. The elite do not want that situation to change.
Small clubs
Despite the promise of independence, there has also been a warning from European football's governing body Uefa that England could face a ban from major tournaments such as the World Cup or Champions League if the government oversteps its boundaries. Preventing matches taking place abroad or vetoing overseas investors would be two such stumbling blocks.
The bill will now pass through the House of Commons but Premier League clubs will seek amendments rather than try to stop it. But the tinkering, suggested a football insider, could fatally unravel the finely tuned workings of the league. “It’s like the biting point on a car, if you get the balance wrong on this you are either going to stall or crash.”
The biggest argument for a football regulator is to stop smaller, community-driven clubs going out of existence. Bury FC, established in 1885, went bust and were expelled from the football league in 2019 after a failed takeover. Wigan Athletic suffered a similar fate in 2020 when they went into administration after struggling with unpaid tax and wage bills, and were relegated by a division as punishment.
The bill, the Secretary of State for Culture, Media and Sport (and Wigan supporter) Lisa Nandy told The National after the Lords vote, was a “huge day for football fans” because “for too long we've seen too many clubs disappear” due to poor stewardship or finances not being fairly distributed.
“These are clubs that stand at the heart of our communities and this bill will put fans back at the heart of the game,” she added. “Action is long overdue and this is the moment we can really put rocket boosters under this agenda.”
Fan focus
Ms Nandy, who has been praised for almost single-handedly saving her constituency's team, Wigan, from closure, argued that it would be a “light-touch regulator” that would enable the Premier League “to thrive and for the benefits to be felt at every level in football”.
It is in the league's interest, she argued, to have good clubs at Championship level and below as “an ecosystem” ultimately supported by those above. “We're confident, as are most Premier League clubs, that the measures we're taking will strike exactly the right balance to ensure that the game can continue to thrive at every level,” she added.
Henry Winter, a veteran football writer, supports her view, calling the bill “absolutely vital” due to the proliferation of "rogue owners". The game “obviously needs a regulator”, he believes. “The regulator can protect football, including the Premier League clubs, because if not they could easily implode,” he told The National.
The league came close to being changed forever in 2021 when a breakaway "super league" of top European clubs was proposed, before being shelved after an outcry. In theory, a regulator would be able to prevent that from happening. The furore prompted Boris Johnson, who was prime minister at the time, to introduce the legislation, which was then inherited by Labour, who decided to push it forward, though Prime Minister and Arsenal supporter Keir Starmer is said to have lukewarm feelings about it.
Mr Winter suggested that the regulator would carry “a big stick in the background” to wield against wayward Premier League owners “killing the golden goose”. There are concerns that US-owned Premier League clubs (10 of 20) could stage matches in the US – Liverpool v Everton in Boston, perhaps – or even form a breakaway group, as has been tried previously. Other than fans picketing Liverpool’s John Lennon Airport, “only a regulator would be able to stop that", he argued.
Overregulation fears
Clubs are deeply worried that the changes could affect lucrative broadcast deals, with a well-placed source suggesting the bill's focus on an extra layer of regulation is “a major concern”.
“The fear is that over-regulation could dilute what makes it so successful, leading to decreased revenue and less money distributed in the wider game,” he said.
This, Mr Winter agrees, is a fair point, as all 92 clubs in England need to work together because the less wealthy teams “desperately need the money to keep the pyramid of English football together”. He also empathised with top clubs having to give cash to teams in lower divisions with owners sometimes wealthier than themselves, or to proprietors with questionable financial motives.
Stifled competition
There is also a fear that the reforms will mean a loss of competitiveness, diminishing the chances of a smaller club such as Bournemouth, Brentford or Brighton succeeding in the top flight and making the “big six” – Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur – even more dominant.
“If you've got clubs like Bournemouth who suddenly hit upon a strategy, go on a brilliant run of recruitment, get a great manager that no one else was looking at and suddenly they've got a team that's challenging for Europe, that's what gives the big six jeopardy and the league its unique attraction,” an established football pundit said. If the big clubs were winning “6-0 every week” it would be “incredibly boring”, he added.
A total of 51 clubs have played in the Premier League since its inception in 1992. Lose its competitiveness and you “lose everything”, the pundit said, including four billion or so television viewers, from the Gulf to India, and China to the US.
“Why on Earth would you regulate one of our most successful industries, which people are falling over themselves to invest in?” he said. “There’s a real worry that if they get the formula wrong we could ruin the league.”
Punctured parachutes
As the legislation stands, the new regulator will be given powers to determine the Premier League’s almost unique “parachute payments”, a huge sum of money given to the three relegated clubs that is worth approximately £108 million to each club over three years. Knowing that cash is available if it all goes wrong means newly promoted clubs can invest in players and wages with confidence, to try to compete with the best.
Sometimes it works: Brighton invested astutely in players and are in their eighth Premier League season. Sometimes it does not: newly promoted Ipswich spent £100 million on players but will almost certainly be relegated this season.
“The parachute insurance policy enables you to compete on the pitch and in the transfer market,” said the Premier League club source. “If it goes overnight, you go back to the bad old days where the top six dominate the Premier League because of their financial powers.”
Backstop woes
Under what are called “backstop powers”, the new regulator could intervene between the Premier League and the English Football League if they cannot agree a deal to redistribute money to the lower-division clubs. The pot is currently £1.6 billion paid over three years, which is 16 per cent of Premier League revenue.
“The Premier League gives more to grassroots football than any top division anywhere else in the world, and by some stretch,” said the club source. This makes the Championship the richest second-tier division in football, and the sixth-richest league overall.
He also made the point that other leagues such as the Bundesliga in Germany or Ligue 1 in France are not ordered to pay significant sums to lower clubs. “There’s a constant clamour for money to be given down through the leagues, which doesn't happen anywhere else in the world,” the source said.
On the backstop, the football pundit called it “overly complex and unrealistic” noting that it might require clubs to give more money than they currently do, which could deter investment. “The backstop mechanism and its impact on the league's financial stability are significant concerns."
Ultimately, Premier League owners are unlikely to like Mr Winter’s interpretation of the regulator’s role in arbitrating any impasse in backstop negotiations.
The source said: “The regulator can basically hold a constitutional gun to the heads of the Premier League and say, ‘you are going to have to hand over whatever money it takes and get it done now’. I don't know what it is about the British mentality but profit always seems to be a dirty word. The Premier League is one of the most successful exports this country has and we're in real danger of damaging that by putting all this unnecessary red tape interference in place.”
