A sustainable future - reforming club football governance
Oral statement by the Minister for Sport on the White Paper setting out government's plans to reforming club football governance.
Mr Speaker, can I start by offering my deepest condolences to John Motson’s family. John had an incredible impact over his 50 years working at the BBC, and his legacy as a legendary commentator will not be forgotten.
Now, Mr Deputy Speaker, with your permission I would like to make a statement on the government’s reform of football governance.
As I am sure many people across this House will agree, in this country, football is more than just a sport.
It is part of our history, our heritage, and our national way of life - bringing communities across the country together week in, week out.
We invented the beautiful game, and the Premier League and EFL are true global success stories, exported and watched in 188 countries across the world, streaming into 880 million homes.
But Mr Deputy Speaker, despite this global success, in recent years, it has become clear that there are systemic issues at the heart of our national game.
Since the Premier League was created in 1992, there have been 64 instances of clubs collapsing into administration. Some of these are historic clubs that we have lost forever, taking with them chunks of our history and heritage, and leaving huge holes in their communities.
Just look at Bury FC. Over its proud 134-year history, Bury managed to survive world wars, countless economic cycles and 26 different Prime Ministers. But it was driven to the wall by financial mismanagement, damaging the local economy, and leaving behind a devastated fan base, who are still coming to terms with the loss of their beloved club.
It is not just Bury. The same is true of Macclesfield Town, another century-old club, and Rushden & Diamonds. Countless others, like Derby County, have been driven to the brink, after stretching far beyond their means.
And despite the global success of English football, the game’s finances are in a perilous state.
The combined net debt of clubs in the Premier League and Championship is now around six billion pounds.
Championship clubs spend an unsustainable 125 percent of their revenue on player wages alone and some clubs face annual losses greater than their turnover.
Many, if not most, club owners are good custodians of their clubs, but all too often we hear of flagrant financial misconduct, unsustainable risk-taking and poor governance driving clubs to the brink.
And owners aren’t just gambling with fans’ beloved clubs.
They are threatening the stability of the entire football pyramid.
Mr Deputy Speaker, aside from the financial roulette being risked on clubs futures, this is also about the way fans have been treated.
Over the last two decades, too many lifelong supporters have been let down, ignored, or shut out by their own clubs.
Whether it’s in the decision to move their stadium to a different part of the country, as happened with Wimbledon F.C.
Or to change kit or badges without fan approval - like when Cardiff’s owners tried to change the traditional kit of the Bluebirds, from blue to red.
Or, as we saw with the European Super League, when a small group of club owners planned to create a closed-shop breakaway league that goes against the very spirit of the game, without any engagement with their fans.
Mr Deputy Speaker, football would be absolutely nothing without those fans.
And yet too often, their voices have not been heard. But we have heard them.
That is exactly why I made sure that one of my first meetings as Minister for Sport was with the fan groups.
I heard first hand how poor ownership and governance can leave clubs at the mercy of careless owners.
In our manifesto, we committed to a root-and-branch review of football, with fans at the very heart of that review.
That review, excellently chaired by my Honourable Friend the Member for Chatham and Aylesford, highlighted a number of key issues that urgently needed resolving in football.
And today, we are acting on its recommendations, with the most radical overhaul of football governance since the rules were first invented in a London pub back in 1863.
With this White Paper, we will do 5 key things:
- First, we will bring in a new independent regulator to make sure clubs are financially resilient. The regulator will operate a licensing system for all clubs in the top five tiers of English football. Those clubs will have to show they have sound financial business models and good corporate governance before being allowed to compete. And the regulator will also be tasked with ensuring the stability of the wider football pyramid.
- Secondly, we will strengthen the owners’ and directors’ test, to protect clubs and their fans from careless owners. There will be greater tests on suitability and on the source of funds.
- Thirdly, we will give fans a greater say in the running of their clubs. This will include stopping owners from changing vital club heritage - like names, badges and home shirt colours, without consulting the fans first. Likewise, clubs will have to seek regulator approval for any sale or relocation of the stadium - and fan engagement will be a crucial part of that process.
- Fourthly, we will give the regulator the power to block clubs from joining widely condemned closed shop breakaway leagues, like the European Super League.
- Finally, we will give the Regulator backstop powers over financial redistribution. Supporting the pyramid is crucial and this Government has already committed £300 million of funding to support grassroots multisport facilities in England by 2025.
When the financial health of the football pyramid is at risk, and football cannot sort this issue out, the Regulator will have the power to intervene and protect the game
In short, Mr Deputy Speaker, we are protecting the long-term success of our national game, and restoring fans’ position at the heart of how football is run.
I want to reassure members that this is not about changing the fundamentals of the game, Or imposing unnecessary and burdensome restrictions on clubs.
In fact, we would not naturally find ourselves in this space - having to regulate an industry that has enjoyed huge success without government intervention over many years.
However, despite the scale of the problems, and the huge harm they could cause,
The industry has failed to act, despite repeated calls for reform,
So we have been forced to step in to protect our national game.
This is about taking limited, proportionate action to maintain the Premier League’s position as the strongest league in the world.
It is also about safeguarding clubs across the country: from the biggest, to those in single-club towns where football sits at the very heart of the community.
Mr Deputy Speaker, this government has proven time and time again that we are on the side of fans.
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We committed to this review in our manifesto.
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We stepped in during COVID to make sure English football was one of the first leagues back across Europe,
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We got fans back into stadiums quicker than almost any other country,
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And we took action under competition law to support broadcasting revenues during one of the most difficult periods sport has ever faced. This secured £100 million of funding to the game.
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We stepped in once again to block the European Super League - a competition that no fans wanted.
When fans have needed us, we have been in their corner.
And now we are putting them right back at the heart of football.
And I commend this statement to the House.
Read the White Paper: