England, the birthplace of soccer, plans to establish a new regulatory body to oversee the sport’s financial and competitive sustainability, the result, at least in part, of a fan-led review of the game.
On Thursday, the government kicked off the legislative process by presenting a white paper to the House of Commons that lays out a new set of rules to unify and redistribute wealth among the five divisions of English soccer from top to bottom: the Premier League, the English Football League (divided into three divisions—the Championship, League One and League Two), and the National League (or the fifth division).
“Thursday was a huge step,” Rick Parry, the chairman of the English Football League, said in an interview. “The next step is to make it legislation. The evidence of the last 30 years shows that the football authorities can’t sort out redistribution because there are too many vested interests and that it does need an independent voice.”
The government began exploring the idea after plans for the failed European Super League were announced in 2021, and if approved, the regulatory body will have the power to stop clubs from joining any breakaway competitions.
The source of that power will be a strict licensing system. To gain a license, clubs will have to meet conditions regarding their business model, ownership, source of funding and fan engagement, and agree to only play in games approved by the regulator. Such prerequisites will allow the regulator to consult on financial stability, help build “sound financial business models,” oversee owners and directors to ensure they are acting as “good custodians of clubs” and to provide “stronger due diligence on sources of wealth,” according to the Department for Digital, Culture, Media and Sport. Poor business practices and negligent ownership have plagued the sport, particularly at the lower levels.
The financial oversight is also a way of stoking competitive balance. “The goal is to close the gap between the bottom half of the EPL clubs and the top layer of the Championship,” Parry said. “What we call the cliff edge between the bottom of the Premier League and the top of the Championship. The bottom club in the Premier League receives about 100 million (pounds), and the top club in the Championship receives about 8 million, so there’s a gap of 90 million. We need to narrow the gap.”
According to Parry, such regulation would be good news for investors, enhancing the value of both Championship and Premier League teams. “If you’re buying for the right reasons, there’s nothing to fear. By de-risking, by narrowing the gap, there won’t be a financial catastrophe if clubs are relegated from the Premier League to the Championship.”
Such relegation has been a staple of English soccer for more than a century. Six clubs have held ongoing places in the Premier League, but the churn among other spots has been frequent, with teams jumping back and forth between the EPL and the Championship.
But the movement has become more challenging. When the Premier League launched in 1993, the gap between the EFL and Premier League revenues was £11 million pounds. Today that number is £3 billion.
“This isn’t EFL battling the Premier League. This is about financial sustainability for clubs in the pyramid from top to bottom. And it’s recognizing that there is upward movement,” Parry said.
Such movement is what people like to see on television. “People always watch Liverpool and Manchester United; this is a reality,” Parry said. “But they are also interested in relegation battles over the course of the season and how they unfold.”
The Premier League doesn’t like the idea of redistribution, but the report presented last week considers it a necessity. Premier League teams say “they don’t like the idea of the regulator because they don’t like to be governed,” Parry said, “but it’s coming.”
