English football needs a new regulator to tackle wealth gap, says Mervyn King

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English football needs a powerful new regulator to redistribute Premier League wealth and better enforce rules on club ownership and spending on players, according to Lord Mervyn King, the former governor of the Bank of England.

King, a former director at top-flight club Aston Villa, is seeking a radical new settlement within a sport buffeted by financial crises over recent years. Mismanagement has pushed a number of lower league clubs, such as Bury and Wigan Athletic, into administration in recent years, even before coronavirus restrictions led to widespread losses across the industry.

King called for an independent regulator charged with distributing money to struggling lower league sides through a levy on the £9bn in broadcast income earned by teams in the Premier League, the top tier of English football.

But he added that such a body would need powers to avoid the “moral hazard” of lower league clubs being bailed out by unearned cash. This includes stronger enforcement of the “owners and directors’ test” — the vetting process for individuals and groups seeking to acquire clubs — and “financial fair play” rules to stop teams overspending on players.

“It cannot be a question of people thinking . . . let’s get some of this money from the wealthy clubs and just give it to the poorer ones,” he told the Financial Times. “That is not going to ensure financial viability. It’s got to be a framework which recognises that the salary levels, revenues and expenditures of the lower divisions are bound to be significantly lower than the Premier League.” 

Such measures would strip powers from the Football Association, the sport’s national governing body — which the former BoE governor said had “totally failed to reform itself” — as well as the English Football League, the body that runs the professional tiers below the Premier League. 

Lord Mervyn King in 2016. The ex-governor of the Bank of England was a former director at Aston Villa © Chris Ratcliffe/Bloomberg

King is part of a group of influential figures — including footballer-turned-pundit Gary Neville, Manchester mayor Andy Burnham, and former FA chairman David Bernstein — backing a “Manifesto for Change” that envisages the most dramatic governance changes to the sport since the creation of the Premier League in 1992.

Another member of the lobby group, the MP Helen Grant, a former sports minister, last month introduced a bill to create an independent regulator in football. 

“Many parliamentarians are very conscious of the damage that would be done to the fabric of communities if lots of football clubs were to disappear,” said King. “We see increasing support for the idea that there needs to be an external intervention in order to ensure that the different bodies within football are forced to work together in a way that hasn’t happened so far.”

The Premier League pointed to comments by its chief executive Richard Masters last month, who rejected calls for a new regulator. He said the sport’s governing bodies had undertaken a strategic review and that football could “look after itself.”

The EFL said it was engaging in the strategic review “which we hope will consider measures to address the disparity across the game”. The FA said it had undergone its own corporate governance reforms, adding that it played a “vital role . . . in regulating English football, and our league structure and ecosystem is the envy of the world”.

But the demand comes amid a fierce debate over how best to tackle the financial crisis afflicting the sport. Premier League clubs last year rejected controversial proposals — dubbed “Project Big Picture” — which suggested transferring 25 per cent of its television rights to the lower divisions. In exchange, the biggest clubs, such as Liverpool and Manchester United, wanted more power over the running of the top tier.

Discussions over alternative reforms have intensified as lockdowns have left clubs bereft of match day revenues. Each month without fans equates to £100m in lost ticket sales across English football. 

After the UK government refused to include professional men’s football in a £300m bailout of English sports bodies, the Premier League agreed a £250m rescue package made up of grants and loans to assist lower division clubs at threat of going bust. 

King said action was still needed to tackle longer-term problems, such as the need for stronger due diligence on team takeovers and giving supporters more say on the running of clubs.

“It’s a question of how can we reorganise the finances of the game to ensure its sustainability as a football fan,” he said. “I do not want to go through periods again, where I worry that my club is going to go bust in the next seven days.”

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