Yesterday radical plans to introduce a new independent football regulator were unveiled. The football regulator will have the power to block football clubs from joining breakaway leagues. It will also try and prevent teams from going out of business. Before all football clubs can compete, they will have to show that they have ‘financially sound’ business models and practice ‘good’ corporate governance.

This announcement follows a series of scandals that have highlighted financial mismanagement within the industry. Which has led to calls for stricter regulation of the sport. For example, the collapse of historic clubs Bury FC in 2019 and Macclesfield Town in 2020. These two clubs are among 64 instances of a club being put into administration since 1992 when the Premier League was launched. Other examples include Coventry City, Ipswich Town and Portsmouth all falling into the third or even fourth tiers of English football.

In 2021, these calls were amplified when several of the top football teams attempted to set up the European Super League. The backlash was immense. With fans protesting outside stadiums and ex-players calling out their former clubs. We even politicians getting involved. At the time, we wrote an article on the topic, and interestingly enough the main takeaways still stand. 

Broadcasting revenue is immense

Football revenue has grown rapidly over the past two decades. Mostly fuelled by increased broadcaster contracts. For instance, broadcasting rights on average cost per Premier League game between 2010-2013 was £4.3 million. Likewise, in 2017-2019 this increased to £10.2 million. Whilst domestic rights may have contracted throughout the pandemic they are set to rise again. This is due largely to a new $2.7bn six-year deal with Comcast’s NBC, demonstrating the value of international TV rights. 

There are likely benefits from this. English football has never been as viewed as it is now. With multiple channels broadcasting matches to billions of people around the world. Equally, football clubs benefit from greater sums of money.  They can spend on performance improvements such as new players, coaches and facilities. The financial dominance of English football clubs has resulted in some of the world’s most talented players joining the Premier League. Unquestionably, English fans get to witness a greater standard of football.

Yet, not all Enlgish football clubs are winners. Today broadcasting revenues are mediated by third parties and largely based on team reach / performance. This means high-performing clubs with global popularity will inevitably gain a much greater share of the pie. This can often result in the many smaller football clubs gaining very little TV revenue share. What many clubs have  discovered is that as performance can fluctuate. The size of revenue can never be guaranteed and long term it becomes far less reliable as a source of income.

Football is for the fans

The European Super League may have been deeply flawed idea and poorly executed. However, it highlighted that a small number of teams — invariably the richest clubs with the most money to buy the best players —are winning an ever-larger share of matches in their domestic leagues. Resulting in less interesting competitions and fewer opportunities for thrilling upsets. Fans don’t just suffer from meaningless matches but more expensive match day tickets, TV subscriptions, memberships, and merchandise. All in the pursuit to secure the best players and remain competitive.

This announcement of a new independent regulator in English football should be welcomed. As it is ultimately attempting to bring football back to its authentic roots. Whilst the commercial success of the Premier League has had its advantages. The enormous wealth inequality is putting many clubs at risk as owners feel they have to gamble in order to compete. English football may be a business but for many, it’s also a vital community asset and a beloved sport. By introducing an independent regulator with the ability to make meaningful reforms, the government can build a better future for clubs and the wider game.

I recommend taking a read of the piece my colleague Will wrote on the topic, as he goes one step further to explore how pivoting to fan-led strategies can offer a brighter commercial future for clubs. Check it out here.