Football on the brink?

The shock announcement that Wigan Athletic FC have gone into administration once again highlights the lack of leadership and governance in English football. In the last year, three other clubs from the game’s North West heartland, Bury, Bolton Wanderers and Macclesfield Town have faced financial troubles, with Bury forced to drop out of the Football League, yet at the same time Manchester and Liverpool each boast teams amongst the richest in Europe.

Why are the finances of so many clubs so precarious? There is not a lack of money in English football - total turnover of the ninety-two professional clubs is over five billion pounds. The problem is that only twenty per cent of the total is accounted for by the seventy-two clubs outside of the twenty members of the Premier League. As an example of the irrational nature of football finance, according to Deloitte, English clubs spend £318 million on agents in 2018/19, £36 million more than the total turnover of the 48 clubs in Leagues 1 and 2. Even the Football Association, the guardian of the game is not immune, having to make eighty-two people redundant this week in anticipation of a £300 million loss.

This is not just an issue of the survival of Football businesses. Football clubs, especially those anchored in our towns, sit at the heart of their communities, providing a boost to economic activity and being the focal point for socially important activities. Many clubs use their profile to work effectively in the communities they represent. Finance is not the only issue that football needs to reform - as Kick It Out’s report demonstrated this week, more needs to be done to improve the diversity and inclusiveness of the sport. Equally, the grassroots of the game continues to cope with the effects of COVID-19 after many years of under-investment.

Now is the time to reform the governance and restructure the finances of English football. If the Football Association is unwilling to step up and lead the whole game then the Government should appoint an independent regulator with the power to work across all levels of the game to manage the pyramid in an integrated fashion. Anew financial settlement should be a priority with the elite clubs contributing to the wider structure at a level commensurate with the benefit that they derive from being part of the national game. This may mean that player wages become more equal but this is part of the solution – today the inflation in wages at the top end puts pressure on clubs to pay more at each level of the game. It is time to heed the lessons and rebalance the game towards fans, running the game in the interest of all stakeholders and creating a more sustainable financial structure.

At the Centre For Towns, we have long advocated for greater powers and resources to be handed back to people and towns. In football, we want our clubs to have roots in their communities and supporters of our clubs to play a much bigger role in how the sport is governed. This will ensure the long-term strength and vitality of the sport. Otherwise, we should expect to see more Bury’s, Bolton’s, Macclesfield’s and Wigan Athletic’s and the sport can’t afford for that to happen.

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