Reform in Football, Part I – Background

Setting the background for possible responses to the Super League debacle

Paul The Esk 04/05/2021 15comments  |  Jump to last

The public announcements of the formation of a European Super League, the fact that six of the miscreants were the largest of the English clubs, merrily plotting whilst pretending business as normal within the usual day to day structure and administration of the Premier League, has awoken professional football from its money fuelled, abusive relationship-based, inadequate governance and management coma.

Perhaps, the argument in mitigation for this to happen is that attention was focused elsewhere with the impact of the pandemic, the up-coming round of media rights negotiations and tenders, but actually I think that is being too kind to all of them.

The writing was on the wall, we even had a dress-rehearsal with Project Big Picture. We’ve had what has been described as a toxic culture of the six bullying the fourteen for many years. The chipping away of sporting integrity and commercial equality, all with the threat of leaving if not satisfied hanging over every discussion. An abusive relationship with the strong preying on the weak whilst selling a unified image around the world to commercial partners and broadcasters.

Now the cat is out of the bag and, subsequent to Sunday’s partially associated activities at Old Trafford, there’s political, power and financial capital to be won in rescuing the country’s most popular sport and cultural entity (indeed identity). It is, however, those that are the primary enablers (Government, the governing bodies and the clubs), that are being asked to, or who are taking it upon themselves, to find solutions. It’s seldom the case that the problem creators provide the best solutions.

The Government Response

On 22 April 2021 the Government announced the terms of reference for “the fan-led review of football governance”.

The independent review’s aim will be to explore ways of improving the governance, ownership and financial sustainability of clubs in English football, building on the strengths of the football pyramid.

As such, the review will:

  • Consider the multiple Owners’ and Directors’ Tests and whether they are fit for purpose, including the addition of further criteria;
  • Assess calls for the creation of a single, independent football regulator to oversee the sport’s regulations and compliance, and its relationship with the regulatory powers of The FA and other football bodies;
  • Examine the effectiveness of measures to improve club engagement with supporters, such as structured dialogue, that were introduced on the back of the Expert Working Group;
  • Investigate ways league administrators could better scrutinise clubs’ finances on a regular basis;
  • Examine the flow of money through the football pyramid, including solidarity and parachute payments, and broadcasting revenue;
  • Explore governance structures in other countries, including ownership models, and whether any aspects could be beneficially translated to the English league system;
  • Look at interventions to protect club identity, including geographical location and historical features (eg, club badges);
  • Examine the relationship between club interests, league systems and their place within the overall football pyramid.

The Football Association and Premier League response

One would have thought that the above combined with the media and fan reaction to the actions of the six and the proposed Super League a few days earlier would have produced a considerable leadership response from both organisations. However, it was not until the postponement of the Manchester United game due to fan protests that both organisations produced what appear to be hastily compiled responses – on a Bank Holiday and in the middle of a self-imposed social media embargo.

Belatedly, the Premier League conceded that the previous two weeks had “challenged the foundations and resolve of English football.”

“The actions of a few clubs cannot be allowed to create such division and disruption. We are determined to establish the truth of what happened and hold those clubs accountable for their decisions and actions. We and The FA are pursuing these objectives quickly and appropriately, consulting with fans and government.

The Premier League, supported by The FA, is taking the following actions to protect our game, our clubs and their fans from further disruption and uncertainty.

Additional rules and regulation to ensure the principles of the Premier League and open competition are protected, a new Owners’ Charter that all club owners will be required to sign up to, committing them to the core principles of the Premier League, (while) breaches of these rules and the Charter will be subject to significant sanctions.

And we are enlisting the support of government to bring in appropriate legislation to protect football’s open pyramid, principles of sporting merit and the integrity of the football community.”

The Football Association stated: “Since we became aware of the European Super League, our priority and focus has been on preventing it from happening, both now and in the future. Throughout this period, we have been in ongoing discussions with the Government, the Premier League and Uefa.

In particular, we have been discussing legislation with Government that would allow us to prevent any similar threat in the future so that we can protect the English football pyramid. Last week, we started an official inquiry into the formation of the European Super League and the involvement of the six English clubs.

We wrote to all of the clubs to formally request all relevant information and evidence regarding their participation. Once we have the required information, we will consider what appropriate steps to take.”

The task of the Football Association and the Premier League is twofold – the enquiry, investigation, findings and suitable punishments relating to the six and the Super League and what should be entirely separate (although influenced by the recent events) – a full and complete review and re-shaping of the Premier League ownership and management model with an entirely new governance structure at League and individual club levels.

The two cannot be confused with each other. The question is do both organisations have the structures, the authority and the people to execute these two very separate but vital strands of work?

If not, how is it handled?

Power struggle?

On the one hand, the Government is alerted to an opportunity to “save” the beautiful game from itself. The review and the probable imposition of independent regulators, in itself, demonstrates that from the outside the game is seen as incapable of self-management. On the other hand, those in charge of the beautiful game scramble to make it appear that not only were they in charge all along, running a good ship, they are now capable of (i) resolving multiple issues which the actions of the six have laid bare for all to see, and (ii) creating a suitable governance structure (albeit never having done so before in all the time they have had available to them).

It is the classic power struggle, sadly and potentially dangerously, played out between those who think they know better than the current incumbents and the incumbents who have proved incapable of managing a collective enterprise under the most benign of macro -conditions – notwithstanding the naked greed and self interest of their largest members.

The Fans

Then we have the fans, the people who paradoxically and tragically are the most invested of the participants and until Sunday at least (albeit based on the grievances of fans and the owners of one club), almost totally without power or influence. However, that power, the power to disrupt and protest, can play little part in investigating the actions of the six and doesn’t resolve the governance issues of the game. If sustained or expanded to other clubs it would most likely leave future fan participation in the governance of the game less likely or effective. Potentially it provides a common enemy for the Government led reviewers and the incumbents to rally against.

It is critical that fans, organised groups and individuals, plus representative bodies, form part of the governance (and structural) reviews and solutions for the future. Individual grievances between fans and their owners, whilst adding to the body of debate cannot come in the way of the collective need.

This is a huge topic, there are many ideas on reforming the Premier League, the Football Association, the ownership, management and governance of the Premier League, the ownership of football clubs, their governance, fan ownership and participation in decision making. Just as with the Football Shorts series a year ago, I will examine and give my own thoughts as to what should be done.

I wanted to set the scene as I see it; thanks for reading.

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Reader Comments (15)

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Derek Thomas
1 Posted 05/05/2021 at 02:24:41
Good luck in your endeavours Esk, but I doubt that much of any consequence...and I include 50+1 in that...will be done.
David Ellis
2 Posted 05/05/2021 at 04:15:07
Thanks for explaining the current landscape Esk.

I have 3 suggestions
1. I would like to see some kind of "Community Business Act" to acknowledge the existence of businesses (not just Football Clubs, I would include Rugby League and Rugby Union club as well) that "belong" to their communities and not just the shareholders, with appropriate restrictions on what the shareholders can do to the business without some sort of consent from the relevant community (e.g. season ticket holders in the case of football clubs). Perhaps also provision for community groups to have a right of first refusal (or right of first offer) over the sale of any shares in the club.

2. Revenue sharing through the football pyramid. The gaps between CL clubs, EL clubs, PL clubs and Championship Clubs need to be narrowed to give greater chances of clubs to move between these layers, and less financial hardship for those falling downwards. Basically I would take some of the CL revenue and use it to help those lower down the pyramid.

3. I would also outlaw shareholder loans - i.e. these should be capitalised into equity to avoid a Portsmouth situation where the owners suddenly asks for the loans to be repaid and bankrupts the club.

Chris Williams
3 Posted 05/05/2021 at 12:05:15
David

Re 3. This is what Moshiri has been doing consistently. He converted loans into equity again in February and also put in new capital. He has also created further shares, as yet unallocated, which allows further investment of £100M, at the most recent share price of £3000.

I think he now owns 93% of the club.

Alan J Thompson
4 Posted 05/05/2021 at 16:14:10
There is no hope of any "Fans" organizations coming up with the cash to buy out any owners so that the vast majority of shares will be in the hands of any body or diverse group wanting to do "the right thing" by fans or a community.

It will need Governments and/or UEFA and FIFA to set in place regulations that make it difficult for any breakaway League to be established or, for that matter, sanctioned and even then it may also have to take into account how any government legislation might affect business in general, not just football unless it is through defining what qualifies as work permits for employees of British organizations not participating in British institutions.

Given the present Premier League, FA, Football League or international ruling bodies have been incapable of foreseeing the possibility of such as this ESL, and indeed may have encouraged it with coefficient qualifications for major money spinning competitions, then it is highly likely that ESL will eventually become reality with most National Leagues being not much more than nurseries.

Jerome Shields
5 Posted 05/05/2021 at 19:10:52
Very complicated. Seems well intentioned enough. But where is the authority base to actually do something, when they appear to be admitting that things have not been hunky doray anyway?

It also seems that, out of the blue, the Super League was formed with no prior indications or cop on by the authorities involved in football. Suddenly, they appear to be latching on to Government intervention and now have a course of action.

Good analysis of the power struggle down the years and the ineptness of the Authorities Managing the agenda, pushed by the Six.

It appears to be in the Champions League and Uefa the real power arises to do something, since that is where the elite clubs actually derive their power from.

Stephen Vincent
6 Posted 07/05/2021 at 17:32:22
Good summary Paul, I'm a little surprised you did not include UEFA, as Jerome rightly says it undoubtedly has the power to effect change, whether or not it has the will or ability to enforce any meaningful sanctions is open for debate.

50+1 is not going to happen, if for no other reason than it would probably be illegal to enforce a sale of the owners' interests when the purchases were made between willing sellers and willing buyers, no matter how contrived the manner in which the purchases were financed. The best we can hope for is an enforced dilution over a long period of time.

The FA is now a toothless and ineffectual body and little credence can be given to anything it says or promises.

The EPL must put its house in order. But with the fans being the instigators of the downfall of the ESL it is difficult to see a punishment that could be enforced that does not jeopardise fans rights. So the EPL must look to dilute the power of the 6 both in financial and administrative terms. The current CEOs of the 6 cannot be allowed to continue in post, as all trust between them and the remaining 14 has surely gone. A voting system capable rigorously enforcing the EPL's own rule book must be established in order to put a halt the financial inequity that has developed between those sitting at the top table and those scrambling for the scraps.

UEFA must be the organisation to take the lead, as they have jurisdiction over all the participants in the ESL. A reduction in the 6's European co-efficients to zero would seem, in view of the new CL structure, to be the most appropriate punishment.

In any event, we all know that there will be no punishments as the 12 will already have lawyered up and none of the spineless, self seeking organisations that run our game will have the stomach for a prolonged fight.

Barry Hesketh
7 Posted 07/05/2021 at 17:58:07
The Telegraph seems to think that fines by Uefa are the order of the day for our six clubs - unfortunately, it's a paywall site so unable to give more details.
Barry Hesketh
8 Posted 07/05/2021 at 18:11:14
If Madrid, Juve and Barca are banned for a season or more from European competition then the other 9 will have gained a massive advantage, I don't think 5% of their UEFA revenue will hit the 9 clubs too hard?

It's over to our own FA and Premier League to decide what should be done now - more fines no doubt!

LONDON (AP) — Nine of the 12 Super League clubs have formally renounced the breakaway and committed to the existing European competitions but they will have to give up 5% of UEFA revenue for one season.

But Barcelona, Real Madrid and Juventus have refused to approve what UEFA called “reintegration measures” and they will be referred to UEFA disciplinary bodies for sanctions after backing the new largely closed competition, meaning they could be banned from the Champions League.

The Super League project imploded three weeks ago after the English clubs — Arsenal, Chelsea, Liverpool, Manchester United, Manchester City and Tottenham — backed out inside 48 hours after a backlash from the fans and British government.

Atletico Madrid, AC Milan and Inter Milan have also officially signed up to a settlement with UEFA to only participate in the existing open European competitions.

The nine clubs will make a combined payment of 15 million euros for what UEFA called a “gesture of goodwill” to benefit children, youth and grassroots football. They have also accepted UEFA withholding 5% of revenue for the next season they play in their club competitions.

The clubs have also agreed to be fined 100 million euros if they seek again to play in an unauthorized competition or 50 million euros if they breach any other commitments to UEFA as part of the settlement.

“The measures announced are significant, but none of the financial penalties will be retained by UEFA” said Aleksander ÄŒeferin, the UEFA president. “They will all be reinvested into youth and grassroots football in local communities across Europe, including the UK. These clubs recognised their mistakes quickly and have taken action to demonstrate their contrition and future commitment to European football.

“The same cannot be said for the clubs that remain involved in the so-called ‘Super League,' and UEFA will deal with those clubs subsequently.”

Ceferin previously told The Associated Press that the clubs refusing to renege on the Super League could be banned from UEFA's competitions.

Dave Lynch
9 Posted 07/05/2021 at 18:40:01
Politics and money to one side for a moment.

Personally I think the one thing that has come out of this is that fans are waking up to the actual power they hold over their clubs.

If they had simply sat back and accepted the SL it would IMO have gone ahead. It's an age old adage that football is nothing without the fans and it's also a very true statement.

If the fans come together great things can be achieved, it remains to be seen whether they will or can...come together as a united front.

Dale Self
10 Posted 07/05/2021 at 18:51:09
The separation of the incident from a proper structural review of ownership, management and governance in total is crucial. Otherwise the shitey six will just use that review as a forum to table the cabal's views and whine about having to service wee clubs.
Danny O’Neill
11 Posted 08/05/2021 at 07:47:10
Heard that this morning Barry. Without looking into the detail, 5% of UEFA money for one season is a token effort and rap on the knuckles at best. It smells of being seen to do something rather than do something meaningful. I'd even wager it was negotiated and agreed to by the all parties concerned!

I've been vocal previously. The 50 + 1 rule works in Germany because they built their system on it. We would be reverse engineering an entire system to try and make that fit so I don't see how it can work here. And even if I was proven wrong, you are talking a long-term transition, not an overnight fix.

To the title; reform in football. Once more in England, we're missing the point. If we want reform we don't start by fixing it at the top, which yet again is where the focus is. We fix the foundations; the grass roots. The "open" pyramid is a good concept, but our game is saturated with too many clubs at grass roots run by unqualified coaches screaming at kids kicking balls around on mud fields (I won't call them pitches). I mean no disrespect to those who give up their time by the way. I've stood there for many years but got very frustrated with some of those so called coaches and their approach.

We have an equally saturated professional system; effectively 5 leagues worth of clubs trying to get a slice of the pie. In perspective, Germany has only 3 full time professional leagues and the 3rd was only established in 2008.

Fix the grass roots, build from the bottom up and streamline the game. Another idea I liked on the continent is the Sports Club concept. So if a kid comes along and isn't too good a football, there is Tennis, Handball, Water Polo, Swimming and other sports within the same club to channel them towards rather than putting them on for 5 minutes or telling them "no thanks son". Hamburg SV; the SV standing for Sport Verein (Sports Club). Not Hamburg FC.

Sorry for my repetitive rant! Good article as always Paul.

Dave Lynch
12 Posted 08/05/2021 at 10:32:15
So how do we streamline the game Danny?
Set up a German style 3 league system of professional clubs?
What do you say to the clubs who arnt invited into this 3 league system?
They would go to the wall very quickly as you can bet your life the "Big 6" would kick off mercilessly if they where to receive payments from the professional league structure.
Football is broken world wide in a professional sense, if the FA had any balls they would have waved goodbye to the 6 and restructured from then.
They are the problem with the game, let them go and the game will flourish at a domestic level.
European football is an advertising exercise, structured wrongly and set up to provide uefa with pots of money, no more no less.
Thats why its set up to keep the mega rich clubs in the competition.
Alan J Thompson
13 Posted 08/05/2021 at 11:29:41
Can anyone point to an example of where and when this German 50+1 system has managed to change or block anything meaningful in German football or is it just believed that as nothing has happened (or been promoted) that it is working by default? I've heard all about how good it is but not what, if anything concrete, it has managed to actually achieve and who actually bought and sold what shares and at what price or how big any individual holdings are. The only time I've heard anything about it, not that I'm particularly interested in German football, is that one club is considered out of step as it seems to be owned entirely by one person.
Danny O’Neill
14 Posted 08/05/2021 at 11:35:02
The "how" we reform is the massive challenge Dave. A question I can't answer and one I'd probably need a separate thread on having given it some thought. And even then, it would be an opinion. Feels like one for a discussion over a drink or seven!

I don't think we can make the German model fit our game even though I an admirer, hence my view about it being difficult to implement the 50 + 1 rule in the English game just because it has worked for Germany.

Inevitably clubs would go or merge, but I just feel our game is saturated and they're all after the same pot of money, meaning there is less to go around hence clubs struggling. We have 92 professional league clubs in a country with a population of about 56 million compared to Germany's 54 clubs in a country with a population of 80 + million. And that's without the National league, which is more and more populated with full time clubs.

I'm not saying I have the answers. I'm not saying it would be pretty, but, in line with the title of the thread, in my opinion, football does need reforming. But from the bottom up not top down and part of that reform would need some sort of streamlining of the professional game. Also, none of it a quick overnight fix.

Danny O’Neill
15 Posted 08/05/2021 at 11:46:18
Its a valid point Alan. I said on another thread a few weeks ago that it's not necessarily the silver bullet its made out to be that gives power to the fans.

The "fans" are members, who pay for the right to be a member. Yes, it avoids a single dominant bad owner, but it is still open to exploitation.

And if you own 49%, you don't need a massive swing of opinion to get your way and vote. German politics is much more accustomed to working within coalitions with a minority Government, so I'm sure they're comfortable governing their football in a similar way. We don't work like that.

I'd have to research it more, but my view is that yes, it applies a better level of regulation and control, but it isn't the perfect solution to English football governance that people seem to have latched onto.


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