English football needs a major overhaul to the way it is run in order to tackle the levels of debt and financial instability that threaten the game’s future, a parliamentary report found on Friday.
The report on football governance said clubs “spend up to the hilt” to get into the Premier League and remain there, while insolvency rules encouraged “excessive financial risk-taking”.
The report was produced by the Culture, Media and Sport Committee of parliament’s lower House of Commons, a 10-strong scrutiny panel made up of lawmakers.
The committee expressed concern at the extent to which clubs were “making losses and operating on the edge of viability” with escalating wages driving up debt levels.
Several witnesses who gave evidence highlighted the extent to which the financial benefits of being in the Premier League had the effect of encouraging “reckless financial speculation”.
“No one doubts the success of the Premier League in revitalising English football. But it has been accompanied by serious financial problems throughout the football league pyramid,” said committee chairman John Whittingdale.
“Significant changes need to be made to the way the game is run to secure the future of England’s unique football heritage, and the economic and community benefits it provides.”
He said the Football Association, the game’s governing body in England, was the right organisation to do it but the governing body had to get its own house in order first.
“We need a reformed FA to oversee and underpin a rigorous and consistent club licensing system and robust rules on club ownership, which should be transparent to supporters,” Whittingdale said.
The committee recommended establishing a formal licensing system for clubs, stronger ‘fit and proper persons’ tests for owners, and changes to FA structures.
“Almost all our recommendations could be achieved without legislation, through co-operation and agreement between the football authorities, and we urge them to respond positively with an agreed strategy and timetable for change,” Whittingdale said.
“Legislation should considered only as a last resort in the absence of substantive progress.”
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