- The regulator will be given the power to assess the suitability of club owners
- It will ensure owners conform to the ‘UK Government trading and policy objectives’
- There is a risk that overzealous regulation will go against the wishes of fans
At a recent charity lunch I sat next to the shrewd owner of a Premier League club punching above his weight with limited resources. He was not a happy man.
Financial ownership such as private equity was inevitable. RedBird has a stake in Liverpool, Clearlake Capital in Chelsea and on the continent CVC works with La Liga in Spain.
The management of sports companies is plagued by amateurism. In an era of franchising, sports broadcasting rights, streaming and analytics (including AI), new professional ownership structures made sense. In his view, sovereign states, with unlimited financial resources, constituted unfair competition.
Abu Dhabi-owned Manchester City have surrounded the football authorities with impunity. The ownership of Newcastle United by the Saudi wealth fund should never have been allowed.
Culture Secretary Lucy Frazer’s unveiling of an independent football regulator (IFR) has its merits. The Premier League may be one of Britain’s proudest exports – its production is in high demand worldwide – but its governance is weak. Britain doesn’t need more quangos. But if the private sector fails to regulate itself, outside supervision is necessary.
Lucrative: The Premier League – which has to protect £5.5 billion in annual revenue – has shown some dexterity with its financial fair play rules
The Premier League – which has to protect £5.5 billion in annual revenues – has shown some sharpness with its financial fair play rules. Yet club owners might wonder why things have become so tough for underperforming clubs such as Everton, Nottingham Forest and Leicester. Manchester City, on the other hand, remains unscathed with 115 alleged breaches of financial regulations so far. The state club from the Gulf States has been allowed to bring in players and trophies with impunity.
The question is whether the IFR will ever have sufficient powers, authority and bloodlust to deal with this.
Britain has endless enforcers such as Ofwat, Ofgem and Ofcom. But their effectiveness in controlling ownership, managing governance and putting consumers at the heart of what they do is limited. The country’s rivers and beaches have been polluted by sewage spills, financial cowboys have become energy suppliers and the BBC is the black voice of Hamas.
Football needs to be restored. The regulator will be given the power to assess the suitability of club owners. It will access HMRC data and National Crime Agency data and ensure owners comply with ‘the HM Government’s trade and policy objectives’.
That sounds sensible and undoubtedly any direct Russian or Chinese ownership would be prohibited. Given this country’s significant economic interests in the Gulf, it is difficult to think that the IFR would be robust enough to unravel City of Newcastle’s ownership.
Another area of conflict between the IFR and the Premier League will likely be trickle-down economics. Ideally, the super-rich Premier League, with valuable broadcast rights and untapped streaming potential, would share some of its wealth with the Football League.
There is a stalemate and ideally the IFR would act as economic referee. It could also have the power to intervene at lower division clubs, such as Reading, if ownership goes off the rails. The risk, however, is that overzealous regulation goes against the wishes of fans. The pressure to create a closed system, based on the American model of the NFL or baseball, and escape from the regulator could become a necessity.
If you thought the discredited JP Morgan-funded European Super League is dead and buried, you might want to think again.