Introducing an independent football regulator risks doing more harm than good
Lord Triesman’s time at the Football Association was an unhappy one, and his frustrations with the existing system of governance are understandable.
I share many of them. But we differ about the role the state should play. I have been a football supporter for more years than I care to remember, and football occupies a larger chunk of my life than sanity – and the demands of my family – should dictate. But football supporters are a minority of the population, and we must recognise that there are wider issues at stake than making marginal improvements to what is, by all non-football standards, a successful industry.
Tracey Crouch’s Fan Led Review, which Triesman praises, was a bizarre way to approach possible legislation. It represented a particular partisan position on matters which, despite their interest to a sizeable and vocal minority of voters, have little claim on public policy.
An independent regulator would impose costly structures and procedures on football clubs
The review sought to address tension in the professional game between legal and commercial realities of private ownership of football clubs, and many fans’ feelings that their club “belongs” to them. The review’s answer was to impose an independent regulator with powers to override the interest of individual club owners in the name of a greater good.
But the proposal to appoint an independent regulator does not meet normal criteria for government intervention in a specific industry. Football does not present comparable problems to those in regulated sectors such as water, energy, communications and finance, where there are clear concerns about matters such as public health, possible exploitation of the consumer, or wider issues such as financial contagion.
The review places great emphasis on the weird economics of professional football. For decades, this has involved clubs spending more than their immediate revenue in pursuit of sporting success. But the Review fails to justify its claim that this represents an existential threat to the game. Financial disasters for individual clubs occur from time to time, but almost all clubs survive, or are reincarnated at a lower level. The impact on the rest of the football pyramid remains minimal. In reality, football clubs have remarkable longevity and resilience – as Triesman himself notes.
Placing restrictions on the freedom of owners to spend their own money and requiring approval from an independent regulator of business plans, would go beyond what is done in other regulated sectors. If effective, it would reduce competition and make it far more difficult for clubs to move up the football hierarchy.
A key point in the review is the need to protect heritage, the most important element of which is club stadia. The idea that “fan equity” should give a subset of football supporters a right to veto change is highly debatable. The proposed procedures and infrastructure to support this power raises important issues about the property rights of owners and investors – issues that could be costly to the taxpayer if challenged in court.
An independent regulator would impose costly structures and procedures on football clubs. Some recommendations would impose requirements on very small private businesses going beyond those currently placed on FTSE-listed companies.
The proposed new Owners and Directors requirements are in part subjective rather than clear and unambiguous. All of the measures proposed could deter investment, not just in things that the review considers risky, such as player salaries, but also in ground improvements, training facilities and innovations to improve fan experiences.
It is proposed that an independent regulator should have powers to require greater redistribution from the Premier League to lower-league football, and to place levies on certain types of transfer. Few precedents exist for such powers. Governments may legitimately impose taxes: independent regulators should not.
Lord Triesman has the interests of football at heart. But he needs to think more carefully about the wider precedent that these populist proposals would set for the state’s relation to private businesses and civil society.
Professor Len Shackleton is editorial and research fellow at the Institute of Economic Affairs. He is co-author of the report 'Red Card: Why English Football doesn’t need an independent regulator’
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