Tomorrow will see the Scottish Premiership kicks off a new football season. For many clubs including our own it will be seen as a fresh start, an opportunity to put to bed the failings of last season.
As the league campaign starts with the warm of the sun on the players back it will travel through, autumnal change and dark winter before emerging in spring as the trophy is handed out in May.
It’s an annual ritual many of us couldn’t do without, it is our routine. Our calendar is not the Gregorian, it is one set by the Scottish football authorities and based entirely around the dates and kick off times for our football club – even our wives and children, some without an interest in our passion fall into line as family gatherings are checked against our availability.
It’s a crazy thing to give priority to if you stop to think, but we tend not to stop to think it has long since become automatic.
But last year made us all stop to think. Football stopped and when it returned it was a strange old version without fans in attendance. The governance of our game came under scrutiny it was not used to. The confirmation of Celtic’s nine-in-a-row season, the relegation of Hearts and further down the pyramid those in charge of the game made decisions on relegation, promotion, league titles and cup competitions, where previously those outcomes were decided by the ebb and flow of a size five mitre passing around a football pitch. Strange times indeed.
Copyright: Jeff Holmes
What became clear in that summer of discontent was even when it came to implementing rules the Scottish football authorities already had in their playbooks, the implementation was poorly handled.
The Dundee – did they didn’t they – vote was the first shambolic signs our authorities were the types where you’d be concerned as to the availability of a beer in that party at the brewery. Then as the season progressed the handling of transparency of what crime equated to what punishment changed from week to week and club to club when it came to Covid-19 indiscretions. There was little joined up thinking and certainly no balance to any of it. Indeed, the only thing consistent about any of it was the level of inconsistency.
This may not mean much to many, there will be those who think Covid 19 was uncharted territory, that our footballing authorities should be cut some slack at trying to navigate their way through. However, the vast majority of what was required was already in rulebooks, it simply had to be explained, implemented and agreed upon by members who had already agreed those rules – sounds simple right?
Photo: Jane Barlow
Not in Scotland. Even when it came to Covid 19 it shouldn’t have taken long to implement some agreed transparent rules for everyone to follow, instead we got ad-hoc approach that led to confusion and resentment that has carried over to this new season.
Scottish football authorities hold a heavy responsibility, the competitions themselves, the logistics of it all, the refereeing and applying the laws of the game. And this is just the tip of the iceberg.
Scottish football plays a further and important part in all our communities. From grassroots football, the women’s game and the smaller football clubs – the hubs of many a community.
The importance of protecting all of that, the history, the welfare of the players and the clubs themselves falls on our footballing authorities and their ability to protect, nurture and grow.
Then there is the financial side, ensuring clubs operating at the edges of solvency are not open to the modern concerns of organised crime and money laundering. The problem with any governance that is not viewed as fair and balanced or up to the task is it is open to being questioned with regard it’s even-handedness. It could even be viewed as rigged.
Photo: Jane Barlow
When that vacuum arises people can take advantage, and can ride roughshod over both the history and the future of football clubs and the very sport itself in our football mad country, alongside the wellbeing of the players of tomorrow. When that occurs, there is only one real approach, it has to be protected, it has to be reformed.
The Scottish football authorities are long in need of such reform, but even that must feel like a minefield to navigate for a group of people who, even if they had the appetite for it, have evidenced they aren’t fit for that kind of intellectual purpose in recent years, whilst other may simply like the shades of grey if it suits their ends to take advantage.
Yet a map to the reforming of Scottish football may already be developing. There may already be a blueprint to follow, and for those of us who know Scottish football needs modernising and ridding itself of the perception amongst many football fans that the game is open to unwanted infiltration and may even already be infiltrated in Scotland, such a blueprint to follow could be ideal.
The minds of those running our governing bodies need not stretch themselves beyond their comfort zones to formulating a plan if there is one they can follow, and they can rid themselves early of any perceived bias if that plan has come from somewhere with no horse in our race.
Last week across the border, Tracey Crouch MP wrote to Oliver Dowden the Secretary of State for Digital, Culture, Media and Sport (DCMS).
In her letter (which you can read in full below) Ms Crouch advised the DCMS – “I wish to inform you of the conclusion I have reached that in order to protect the future of key aspects of our national game a new Independent Regulator for English Football (‘IREF’) is needed.”
Tracey Crouch was outlining initial findings ahead of a final report to be published in the autumn. In it the MP considered ‘100 hours of oral evidence from fan groups, leagues, the FA, clubs at every level of the pyramid, representatives of players and managers, those involved with and supporters of the women’s game, academics, German supporter groups and many more.’
In her seven-page letter, Tracey Crouch has already advised on changes with regard to Finance, Regulation and governance, establishing an Independent Regulator, Protecting Heritage Assets, Deepening Fan Engagement and Transparency, Navigating Financial Gaps, Reforming Football Authorities’ Governance, Investing in Football, Growing Women’s Football and Protecting the Welfare of Young Players.
In short there is a blueprint available to Scottish football authorities and Scottish Government as to how to consult with Scottish football stakeholders. The outline is there if they wish to use it and if they have the appetite to do so. And they must be aware, inaction is not an option. The events of 10 years ago when one of Scottish football’s biggest clubs was liquidated should have been a wakeup call. It was missed.
From that shambolic episode came a a fantastic opportunity to properly regulate the game in Scotland, instead nothing really changed and now another incarnation of the club has been set up, the story of its demise is being airbrushed, and with such actions the opportunity to reform the game is also being missed. Yet there is evidence that no lessons have been learned, there are allegations that very club is now teetering on the brink in much the same way and others too.
Celtic passed up several opportunities through the tireless work of Resolution 12 to do something to help reform Scottish football and instead via the 5-way agreement were allegedly complicit in a continuation myth.
Tracey Crouch was initially charged with compiling her report following the demise of Bury FC, it was expedited by the European Super League fiasco as the government in England sought to intervene and protect football as a reaction to a very public outcry.
Scotland needs to do the same. The pandemic has tightened a financial noose around every club in Scotland, and our authorities have a duty to protect those clubs from themselves and from others with darker ulterior motives.
If they follow Tracey Crouch’s blueprint, they may well have an opportunity to do so without forced government intervention, but they should be assured MSP’s are keeping a watchful eye on developments.
There is as little confidence in Holyrood that Scottish football can self-govern at the moment, the reaction to the pandemic has sharpened focus on Scottish football’s ability to self-police, yet there would be little need if they could follow this blueprint and embrace it all. I’d consider it wise if they voluntarily approached the Scottish government and sought assistance with Independent Regulator for Scottish Football (IRSF) at least that way they will remain inside the tent when changes are considered and have access to help and assistance in dealing with modern threats. If not, they are in danger of the Scottish government taking control of the narrative entirely. And that is perfectly plausible as those politicians will be very aware that as England acts, they look as if they are sitting on their hands.
There will of course be those who simply state it’s the same as it always was, things will never change, but we are beyond such a defeatist approach. The safety, protection and longevity of the game in Scotland depends on overdue reform of our game. To say nothing will change is simply an excuse to rid ourselves of the responsibility to do something that will encourage change.
In Holyrood there are plenty of MSP’s who will welcome Tracey Crouch’s report as they have little confidence in either the SPFL or the SFA.
Within our own club, following Resolution 11 at last year’s AGM, saw the Board state ‘The football governance environment has developed substantially over the past 10 years and the Company will continue to monitor the application and effectiveness of these systems of governance.’
That in itself indicates the club has a duty to examine the worthiness of the footballing authorities ability to govern, and behind all of that The Celtic Trust has also agreed to hold the board to account on Resolution 11. All parties should welcome Tracey Crouch’s initial outline, await the detail and when it arrives and act upon it.
Photo: Jeff Holmes
As such does it not make sense now for the SFA, SPFL and alongside assistance from the Scottish government begin to implement a series of changes that smack of common sense and will assist to protect from those inside who have evidenced poor governance and those poised outside the game looking to infiltrate with corruption in mind? This is the level of protection we need. The excuse of avoiding intervention in football governance matters is often that is not the business of government. Well, that is now a moot point, a precedent has been set, it is in England now the business of government, so why not in Scotland?
Celtic are being pressed and have pledged to improve communications with supporters after their perceived off-hand treatment of the CST on the Celtic Shared idea for added value for season ticket holders by way of shares in the club, as well as their handling of Res12/11. Embracing the Crouch recommendations and lobbying the SFA/SPFL and Scottish government would be a good way to show they are not offering simply lip service. There is no longer an argument that football down south can govern itself, the final report in August for the DCMS will show just that. It is just as evident in Scotland.
This weekend the football season starts again, a fresh new start is how it feels for everyone as everything is re-set. Fans have started returning to stadiums and for some youngsters they will be taken to their first ever game this weekend.
The protection of a fit for purpose and honest game is vital if those young fans attending tomorrow can be expected, as we have done, to one day take future generations to the game we all love.
The Tracey Crouch recommendations will ensure English football has that security. It’s time Scottish football followed suit. The heavy lifting has already been done.
Niall J
Read the letter from Tracey Crouch MP to the Secretary of State for Digital, Culture Media and Sport on the next page…
Tracey Crouch MP
House of Commons
London
SW1A 0AA
The Rt Hon Oliver Dowden CBE MP
Secretary of State for Digital, Culture, Media and Sport
Department for Digital, Culture Media & Sport
100 Parliament Street
London
SW1A 2BQ
22 July 2021
Dear Oliver,
I am writing to provide you with an update on the work of the Independent Fan Led Review of Football Governance. This letter sets out the preliminary findings and recommendations but there is much work still to do. In particular, I wish to inform you of the conclusion I have reached that in order to protect the future of key aspects of our national game a new Independent Regulator for English Football (‘IREF’) is needed.
The Expert Panel has heard over 100 hours of oral evidence from fan groups, leagues, the FA, clubs at every level of the pyramid, representatives of players and managers, those involved with and supporters of the women’s game, academics, German supporter groups and many more. We have received over 70 documents of written evidence and conducted a survey which closes today, but which has already had 16,000 responses. As Chair I have also taken soundings from numerous people who have been involved with the game both past and present. I am confident that everyone with an interest in English football has had the chance to contribute to the Review.
It has been an incredible experience to hear from so many different football stakeholders. But it is the voice of fans that has been the loudest and clearest. Although I have been involved with football all my life, as have many members of the Panel, it was truly eye opening and educational to hear the experience of fans first-hand. I have huge respect for their passion, talent and commitment to their clubs. It is often said that football without fans is nothing. It is no exaggeration to say that a number of clubs would not exist today had it not been for the activism of their fans in driving positive change. Its fans are a strength of our national game that should be both cherished and nurtured.
If it was not already sufficiently clear before the start of the Review the evidence has been clear that football clubs are not ordinary businesses. They play a critical social, civic and cultural role in their local communities. They need to be protected – sometimes from their owners who are, after all, simply the current custodians of a community asset. Equally, although clubs are not ordinary businesses, they should not be immune from the ordinary financial controls, checks, balances and behaviours that are good practice in any multi-million-pound company but too often can be absent across the game.
This letter aims to cover the major issues identified but it is not seeking to be exhaustive on all relevant issues. The Review will continue to consider issues, and undertake further substantive work over the coming months, before I issue my final recommendations in the Autumn.
Introduction
As you know, the Review was launched, and the terms of reference announced in April 2021. Although the Review was a manifesto pledge driven by concerns about the financial vulnerability of football clubs in light of the collapse of Bury Football Club and others, it was the threat to English football posed by the failed attempt to launch a European Super League that triggered its formal start.
English football has many strengths. The Premier League is rightly seen as one of the UK’s most successful exports and attracts some of the best talent in the world. The Championship is the biggest ‘second division’ in Europe.
Clubs across the football pyramid play important roles in their local communities and the English football pyramid itself is admired throughout the world. The FA has invested in world leading facilities for the England teams enabling them to drive forward the positive development of players and success on the pitch. It has also built up the women’s game, worked hard to improve diversity including appointing its first female Chair, cooperated closely with Sport England to extend good governance practices to County FAs and continued to invest resources in grassroots football. There is much to celebrate and be proud of.
The Need for Reform
However, for all the positives the need for this Review has become more evident and urgent through the oral and written submissions we have received. Key aspects of our national game are at genuine risk. The short-lived threat of the European Super League jeopardised the future of the English football pyramid. While that threat has receded – for now – the dangers facing many clubs across the country are very real with their futures precarious and dependent in most cases on the willingness and continuing ability of owners to fund significant losses. When this is multiplied by poor financial controls, reckless behaviour by owners and an unwillingness of the authorities to intervene the results are clear – as can be seen from the recent fates of Bury and Macclesfield. Historic and much-loved clubs going under. Loyal fans bereft and communities decimated.
Finance
These risks were present at the top level of the game before the effects of the pandemic. According to the Deloitte Review of Football Finance 2020, in season 18/19 9 Premier League clubs made pre-tax losses, and 8 clubs operated with a wage to revenue ratio at or over the level (70%) considered dangerous, with 3 over 80% – the first time more than one club has operated over 80%.
The situation is even worse below Premier League level. In the Championship in the same pre-Covid season, only two Championship clubs made both operating and pre-tax profits, average wage to turnover was 107% and average operating losses £16m annually. Leagues 1 and 2 made pre-tax losses of £22m and £20m respectively.
Operating at such a level of consistent losses is clearly unsustainable in the long term. It is sobering to consider that these numbers are the end result of a long period in which football had been growing revenues to record or near record levels. The threat of possible future reductions in income expected as the broadcast market diversifies indicates that, without reform, English football could face an existential crisis in years to come unless pre-emptive action is taken now.
Regulation and governance
This situation has arisen under the current regulatory framework, which should in itself be an indicator that the framework is not working. It is absolutely evident from our sessions that the football authorities have lost the trust and confidence of the fans as have, in a number of cases, clubs themselves. We have also not heard from football authorities a single, unified response to the problems of English football. It remains clear that there is currently no single body that is responsible for stewarding the game and that different organisations still have different views about what should be done. This continuing lack of coordination significantly reduces my confidence in the football authorities being able to successfully address the problems identified.
The football authorities have also had multiple opportunities to reform – the 2011 DCMS Select Committee highlighted many of the same problems that have been clear in evidence to the panel and stated that if football did not change legislation would be needed. I and my predecessors as Sports Minister often stood at the Despatch Box and claimed that it was the “last chance saloon” for football to reform itself. It is with some sadness that I note they didn’t heed those warnings and that therefore it is time now for external assistance.
It is also clear that the current governance structures in clubs and the football authorities have not, despite many well-intentioned initiatives, delivered sufficiently on an equality, diversity and inclusion agenda.
Significant contributions to the Panel indicate that football is an immature landscape lacking the basic data for improvement across a range of fundamental issues.
Throughout our consideration of the problems faced by English football its greatest strength – the supporters – has shone through. As was said many times to the Panel in evidence, owners as temporary custodians of a community asset come and go but fans are forever. However, fans have been consistently underrepresented in football governance, something which appears to have led – in part – to the European Super League proposals. I intend to work over the summer to address this and ensure fan engagement and influence is an important part of the game’s governance at all levels in the future.
The passion and commitment to clubs from fans through good times and bad is remarkable, including the many times fans have saved their club from extinction. Over the course of the summer, the Panel and I will work to try to make sure that they never need to again.
Establishing an Independent Regulator
I have stated publicly that there is a strong case for a new independent regulator, and I have heard nothing in evidence that has dissuaded me from this view. I believe that IREF should be established to address issues that are most relevant to the risks to the game and already at least partially a matter of English law – particularly financial regulation, corporate governance and ownership. The related requirements are likely to include cost controls, real time financial monitoring, minimum governance requirements (including a requirement for independent non-executive directors on club boards) and revised separate tests for owners and directors of clubs on an initial and ongoing basis.
However, I do not believe that IREF should cover ‘football issues’ such as the running of league competitions, video technology, the national game, Wembley Stadium, the delivery of a grassroots strategy and other such matters which should remain with the existing bodies. It may also be that at some point in the future a substantially reformed FA could absorb the functions of IREF, though evidence received indicates this possibility is some way off.
It is my intention to work with the Panel over the summer to consider, in depth, the role that such a regulator, established by legislation, might play and its operating model. In this, I will look to learn lessons from successful regulators in other industries to ensure workable and effective regulation that ensures clubs are well run sustainably in a way that promotes competition without reckless risk taking. This will include consideration of the detail of a number of areas such as independent appointments to the regulator, its primary duties, funding and political independence, as well as investigatory and enforcement powers.
I will also consider the possibility of such a regulator operating through a formal licensing system, which might allow it to impose conditions relating to other areas such as equality, diversity and inclusion. I also expect that a licensing model, in conjunction with better fan engagement and veto powers, will allow the regulator to protect existing competitions against any future European Super League type proposals.
Protecting Heritage Assets
We have seen strong evidence that existing protections of key club heritage items of great cultural and emotional importance to fans is not sufficient. The most pressing of these has been the many clubs who appear to have lost the rights to their home grounds, but much evidence was also received of concerns relating to items such as club badges, location, colours and competitions. I therefore intend to develop proposals with the Panel to offer greater protection for these important assets through a ‘golden share’ for fans, giving veto powers over reserved items, to be held by a democratic legally constituted fan group. I will work over the summer to consider the appropriate matters to be covered by this golden share veto and alongside this we will develop proposals for additional protections such as enhancing the existing legal provision for ‘Assets of Community Value’.
The Panel has also received evidence that some fan groups would like the ability to buy shares in their club, as well as suggestions for greater opportunities for supporter groups to be able to buy their clubs as part of formal insolvency processes. These are highly technical areas of company and insolvency law, and I will consider these suggestions in more detail in the months to come.
Deepening Fan Engagement and Transparency
The Panel has also considered evidence regarding the effectiveness of existing requirements relating to fan engagement and transparency, including the impact of the structured dialogue recommendations advanced by the Expert Working Group. It is clear from this evidence that while there has been progress with some clubs demonstrating excellent fan engagement and transparency, too many clubs have not made sufficient, meaningful progress. This lack of transparency also extends to football authorities. I therefore intend to explore measures to mandate greater fan engagement, and in particular measures that will seek to provide for fan consultation on key issues.
To date, there has been no consensus in the evidence presented to the Review on the correct vehicle for such fan engagement, with suggestions such as fan appointed directors not universally favoured by supporter groups. Indeed, evidence was received from existing fan elected directors of some significant difficulties that they face.
The final results of the Review’s fan survey will be of great assistance in considering an approach to fan engagement. I also intend to consider further some of the examples of existing ‘supporter heritage committees’ that evidence suggests have worked well at some clubs and which other clubs are in the process of introducing.
Navigating Financial Gaps
Good governance must be allied to genuine financial reform. The Review will make recommendations on more effective cost controls and financial management across the pyramid. One of the most difficult issues in regard to Club financing and sustainability is the sharing of revenue and how best to ensure financial structures within and between leagues are constructed to enable clubs to successfully navigate the financial gaps between divisions which naturally arise as a result of market forces.
I believe that part of the solution is to encourage clubs, particularly at lower levels of the football pyramid, to maximise the revenue generation opportunities from their existing assets. In this, I am minded to recommend the removal of barriers to revenue generation in lower divisions, such as allowing clubs to operate all weather pitches in League 2.
So called ‘parachute payments’ are seen as both a symptom and cause of some of the difficulties in ensuring club financial stability as clubs move, or aspire to move, or are threatened by a move, between divisions. I am in no doubt they distort competition and drive unsustainable financial activity but recognise that they do also assist the ambition of promoted clubs and stability of relegated clubs. Accordingly, I will undertake further work over the summer on revenue flows within the football pyramid with a view to a conclusive recommendation in the final report.
In the meantime, I strongly urge the Premier League and the English Football League to reconsider their approaches to finance flows between divisions and within their competitions work together to seek a viable achievable solution.
Reforming Football Authorities’ Governance
The Panel has received significant evidence of a need for greater independence in the decision-making structures of the existing football authorities – the Premier League, English Football League, The FA and National League.
I believe that there is a strong case for reform across all of these bodies and am inclined to direct them to develop proposals. In the case of the FA, I welcome initial proposals from the FA Chief Executive Mark Bullingham on FA Board reform which he worked hard to secure and present to the Panel, and am inclined to recommend that at least 50% of the FA Board are genuinely independent non-executive directors and that significant reform of the FA Council is undertaken. I believe that this is a principle that should extend across all funded National Governing Bodies in sport, established within the Sports Governance Code.
The removal of club directors from the Board of the EFL (as recommended in its own earlier governance review) and the National League with both appointing new independent directors would also be a welcome reform. With regard to the latter, although this letter represents my interim findings, I would recommend urgent reform of the National League Board and voting structures as it is clear that a significant part of the league has no confidence in the current set up.
I am also aware of the Football Supporters’ Association survey of National League supporters in which a strong majority supported the National League top division being absorbed into the EFL structure. I recommend that the EFL and National League enter into meaningful discussions to consider this further.
I am aware that there are existing working practice agreements in place between the English football authorities and politely suggest that my recommendations should be considered as superseding these existing agreements.
Investing in Football
The case for greater investment in grassroots football, amateur football, and women’s football has been made strongly in evidence to the Panel. I intend to explore further over the summer how parts of existing finance flows in football to areas such as new or existing transfer and/or agent levies might be more usefully diverted to grow football in the country at the grassroots, amateur, and in the women’s game. We must build on the huge success and positivity engendered by the England team at this year’s European Championship to increase participation in the national game, and to secure its future. Money must be found from within the game to nurture our future stars, and to boost our national sport.
I also consider that the FA should have more flexibility in the use of the money that it generates than it is permitted under the current funding formula which requires an equal split between the professional and amateur games. I strongly believe that this formula should be abolished, and the FA allowed to redistribute its surplus towards the grassroots, amateur and women’s game as it sees fit.
Growing Women’s Football
The growth and popularity of women’s football in recent years is hugely encouraging. However, the Panel has heard much evidence that the sport is now at a critical juncture facing complex and difficult decisions regarding the best approach to take for future stability and growth at both elite and grassroots levels. I believe that improvements in corporate governance of clubs and football authorities under a new regulator will benefit the women’s game as much as the men’s game. As noted above, I also believe that there should be consideration of the money flowing into the women’s game and exploration of ways that funding can be increased.
However, it is more difficult to discern the right model for the future structure of women’s football and the evidence from those within the game has been varied. I believe it is crucial to get these issues right before proceeding further, and we will be considering this further over the coming weeks. It is likely that I will recommend that the future of women’s football receive its own dedicated review.
Protecting the Welfare of Young Players
The Panel heard compelling evidence that the football industry needs to take greater steps to protect the welfare of young players, and in particular the vast majority of young players who become part of football academies but do not go on to have professional careers. The Professional Footballers’ Association (PFA) gave evidence that their involvement with football has a significant impact on the mental health, social development and educational development of these young people. I therefore strongly recommend that the FA, Premier League, English Football League, National League and PFA urgently cooperate to develop a joined-up approach to player development and player care both inside and outside of football.
Contributing to the Gambling Review
Although not within the scope of the terms of reference of my Review, a number of supporter groups were very concerned about the high levels of gambling advertising in and around football, and the impact that this had on supporters, players, and also the game. I am aware a separate review of the Gambling Act is currently underway which is covering gambling advertising. I would recommend that the Gambling Review hears the concerns of football supporters on this issue, and that they have an opportunity to submit evidence to that review.
Conclusion
This is just the start. Thanks to the extensive engagement from the football community, building the foundations of this Review, I have been able to set out the direction of travel towards the final recommendations. The Panel and I, supported by DCMS officials, will undertake further substantive work over the coming months to scrutinise, test and challenge these initial findings and to give more detail in the Final Report in the autumn.
I believe this is the opportunity to address some of the very real challenges facing the English game while at the same time building on its many strengths to make it stronger still. Stronger competition. Stronger protections, regulation and governance. Stronger fan involvement. Stronger controls allied to financial reform. A stronger national game for everyone across the men’s pyramid, the women’s game and the grassroots.
I am sure that you would like to join me in thanking all those who have contributed to the Review so far, the Expert Panel for their valuable time and officials who have assisted the work to date.
Yours sincerely
TRACEY CROUCH MP