BLACKPOOL SUPPORTERS TRUST 

 

EVIDENCE TO THE FAN LED REVIEW 

 

 

Table of Contents

 

Part A - the Blackpool experience

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incorporating:

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Annex A1: the case review model (February 2018)

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Part B - areas requiring reform

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incorporating:

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Appendix B1: Solidarity Payments by Division - 2018/19

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Appendix B2: Parachute versus Solidarity Payments - 2018/19

 

 

Appendix B3: Modelling the redistribution of Parachute Payments - League 1 2018/19

 

 

Appendix B4: Modelling the redistribution of Parachute Payments - League 2 2018/19

 

 

Appendix B5: Modelling the redistribution of Parachute Payments - Championship 2018/19

 

 

 

 

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Part A - The Blackpool experience

 

Introduction

 

The thrust of Part B of this submission is that what currently passes for regulation of English football is in reality nothing of the kind, and that almost every aspect of it has to be both:

 

•   completely redesigned, to make it fit for modern purpose; and

 

•   vested in an entirely different organisation, which has the skills, capacity and willingness to manage the governance of the game in the proactive manner that supporters expect.

 

In Part A of the submission, we will set out those aspects of our experience as supporters of Blackpool FC that bear these assertions out. In doing so we will:

 

•   spell out the nature of the “failure” at Blackpool that occurred over the period from 2011-2019

 

•   examine the wealth of evidence of poor governance that emerged over that period.

 

•   set out the predicament in which we at BST found ourselves, with reference to…

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•   … the many failings of the EFL in particular, and to a lesser extent the EPL and the IFO

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•   and examine the extent to which any of the issues of concern that we highlighted are still current.

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Blackpool - the nature of failure

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The club that the Oyston family took on in 1987 was already in a state of steady decline. It had fallen out of the top two tiers of the league pyramid for the first time in 1978, and already had had one excursion into the fourth tier.

 

It cost the Oystons virtually nothing to buy the club and the period through to 2006 when Valeri Belokon became a minority shareholder and injected around £4.5m was one of indifferent performance on the pitch and - at best - managed neglect off it. The only manager in that period who received significant financial backing was Sam Allardyce, and when his team spectacularly folded in the League 1 play-off semifinal in 1996, the investment stopped. By this time Owen Oyston was in jail, having been convicted of rape, and his son Karl was at the helm.

 

Mr Belokon’s arrival - and his investment - coincided with a decided upturn in the club’s fortunes. Promotion back into the second tier (after a 29 year absence) was secured in 2007, and - improbably - the team managed by Ian Holloway won promotion into the EPL in 2010. The team failed heroically in its one season in the big time and came within one game of a swift return the following year. But by 2017 the club had fallen off a cliff; relegated to the fourth tier, with a string of poor managerial appointments, a chronic lack of investment and open warfare with the fanbase all taking their toll. By this time the relationship between the Oystons and Mr. Belokon had broken down irretrievably, and the latter was seeking redress in the courts.

 

So far, a sad but hardly exceptional tale. But for the purposes of the fan-led review, there were some startling and (in many cases) wholly unique aspects to events. These might be summarised as follows:

 

a) the Oyston family - supposedly the custodians of a club with a rich history - behaved extremely badly over a long period

 

•   the court proceedings of 2017 revealed that they began planning the removal of large tranches of the financial windfall that resulted from playing in the EPL the day after promotion was secured in 2010.

 

•   notoriously, Owen Oyston paid over £11m to himself as a Director’s emolument in 2010/11, an event that was widely reported upon in the UK press and caused huge anger in the fan base, which believed that the club would have stayed in the EPL with even modest investment in players

 

•   the court proceedings further revealed that the Oystons had effectively begun sidestepping the club’s own governance arrangements after the club reached the EPL, with the active support of their own auditor, who Judge Sir Marcus Smith found had been thoroughly suborned. This was done to marginalise the club’s minority stakeholder

 

•   on the field, poor performances and results were increasingly accompanied by shambolic preparation, which - for example - saw the team go into the final week of pre-season in 2014/15 with only eight registered players.

 

•   meanwhile, high profile supporters who had been vocal in criticising the club’s owners were being threatened with libel actions that they often could not afford to defend - thus being forced into expensive out of court settlements.

 

In fairness, not all the details set out above were known before the court case of 2017. But those that were played out over a period of years, without any intervention by the EFL.

 

This lack of a willingness to confront the owners of the club shows a worrying level of passivity in its own right. But is it even more reprehensible when one considers that …..

 

 

 

b) … the EPL and EFL knew there were serious doubts about Owen Oyston’s fitness to be an owner or Director as long ago as 2010/11

 

Remarkable as it may seem, both the EPL and EFL have had cause to assess Mr. Oyston’s fitness to be an owner and / or Director of a football club. Even more remarkable is that they managed to reach diametrically opposite conclusions when they did so.

 

The EPL were in no doubt that he failed their test in 2010/11 - so much so that he was warned by them that if Blackpool were successful in remaining in the EPL at the end of that season, he would be required to divest himself of his majority shareholding in the club as a pre-condition for it being allowed to continue to play in it.

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In the event, Blackpool were relegated back into the EFL, where Mr. Oyston was regarded a fit and proper person to hold office. The EPL did not follow up its interest - presumably because Blackpool were no longer playing within their jurisdiction. The EFL in their turn took no action to pursue the concerns raised by the EPL.

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It is worrying that these two bodies should have reached such different views about something so important. It is also worrying that they seemed not to have had any dialogue about the divergent views both held.

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It also seems clear that nobody thought through the implications for the integrity of League competition, in the Championship in particular. For the four seasons following Blackpool’s relegation back into the EFL, they played in the Championship, and although Owen Oyston was no longer the Chairman, he was still a Director, had received huge emoluments from the club of a size unprecedented in English football, and was continuing to act as what Judge Sir Marcus Smith was later to describe as the “controlling mind” at the club.

 

That Mr. Oyston was still acting in such a capacity meant - in effect - that for those four seasons, twenty four clubs played in the Championship knowing that they could be relegated. Only twenty three - Blackpool being the exception - played in the Division with absolute certainty that they would be allowed to gain promotion.

 

If the EPL and EFL did not realise this was a potential issue - they should have. If they did realise, but chose not to do anything about it, that is far worse. Blackpool came within one game of winning promotion on the field in the 2011/12 season. It was fortunate for both EPL and EFL that they lost the play-off final to West Ham.

 

We at BST were not aware of this state of affairs until well after the event, and only learned of it from David Conn, a respected journalist at the Guardian.  When we challenged the then Chief Executive of the EPL about this matter, he did have the good grace to admit that the matter could have been handled better. We have never received any satisfactory response from the EFL.

 

c) the 2017 court case disclosed overwhelming amounts of information about wholesale failures of governance at Blackpool - which the EFL have never acted upon

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Judge Sir Marcus Smith’s judgement on the Oyston v Belokon court case was published on 6 November 2017. It is around 160 pages long, and is a devastating critique of the Oyston family and the way in which they and their entourage managed the football club.

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Amongst other things, it finds that:

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•   the owners of the club subverted their own governance arrangements in order to exclude the minority shareholder from decision making.

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•   this process of subversion began immediately after the club won promotion to the EPL in May 2010

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•   the owners of the club removed over  £26m from the club for non-footballing purposes….

 

•   …. and in the process thoroughly prejudiced the interests of the club’s minority shareholder

 

The EFL can hardly claim that they were unaware of this. Specifically :

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•   the case got a large amount of local, regional and national media attention

 

•   Blackpool supporters, operating under the banner “Justice4Fans”, were present every day in court, and reported the proceedings in forensic detail

 

•   BST wrote to the CEO at the EFL (Shaun Harvey) on a number of occasions after the judgement, seeking clarity about how the EFL planned to respond and offering to help (more on this below)

 

Our belief in BST at the time was that this judgement - being comprehensive and authoritative - could not fail to stir the EFL into action. It offered them a wealth of evidence to justify at the very least declaring the Oyston family members on the club’s Board as unfit to hold such office.

 

We therefore suggested to them that Blackpool offered an ideal opportunity for the EFL to conduct a post-hoc investigation in order to establish what had happened and learn lessons about how such cases might be handled in the future. When they did not respond positively, we even went to the trouble of designing a case review model ourselves. It was written with Blackpool specifically in mind, but also designed in such a way that its key component parts could be adapted for other purposes. A copy of it is attached at ANNEX A1, and it was shared with the EFL early in 2018.

 

We designed this model in large part because we thought that the EFL being seen to grasp what is clearly a difficult nettle would be a good thing for the English game as a whole. We were acutely aware that we were not the only set of supporters in the country struggling with dubious behaviour by owners; we thought that our experience could be used for the good of everyone.

 

Our initiative received only the scantest of acknowledgments from the EFL; many months later, when we conducted a joint vigil outside EFL Headquarters in London with fans of Charlton Athletic, Shaun Harvey told one of our Members that he thought the model was well written, and although he did not support all of it, it contained a number of good ideas he intended to incorporate into the EFL’s own model in due course. Nearly three years on, we are still waiting for that EFL model to emerge.

 

To our minds, this whole episode showed the current regulatory framework at its very worst:

 

•   the evidence of wrongdoing was overwhelming.

 

•   it came from an unimpeachable source.

 

•   and in BST the EFL had a potential partner who would have moved heaven and earth to make sure that our experience was utilised for the benefit of others.

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The failure of the EFL to engage told us all we needed to know about their willingness to perform the regulatory role. Three years on, they seem no keener on it ; and their handling of cases such as those at Bury, Bolton and Wigan (to name but three) suggests that :

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•   they lack the leadership qualities needed to confront and manage failure.

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•   their due diligence (in respect of club owners and Directors) is still seriously lacking.

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•   they are no more willing to actively engage with supporter groups than they were in 2018

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•   and therefore, clubs collectively continue to be exposed to unacceptable levels of risk

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d) it was in the early part of 2018 that the Committee of BST decided that we were not going to get any help from the footballing authorities voluntarily; and we therefore needed to explore indirect (and sometimes very creative) ways to keep our plight in the public eye.

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We had already been doing some of this before the court judgements and the EFL’s failure to respond. We had:

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•   organised annual Judgement Day marches from the town centre to the football ground - typically the number of people taking part was in the thousands.

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•   we also held a number of joint events with fans of Leyton Orient (a march) and Charlton Athletic (a vigil) to highlight our dissatisfaction with the EFL’s handling of our case(s)

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•   BST maintained an “outdoor office” at Bloomfield Road on match days, outside the main entrance to the ground. This was a chance to speak to visiting supporters of other clubs, and to peacefully petition those fans of our own club who were still going into the ground. This was done for every home game, in all competitions (and all weathers) for four very long years.

 

•   we were an enthusiastic participant in initiatives such as Fans Not Numbers, which was designed to convey the idea that football fans deserved a voice in issues affecting them that they were largely being denied

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We concluded, however, that we had to do even more:

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•   we were creative in manufacturing media opportunities; the first of which involved hiring a billboard outside EFL headquarters in Preston, on which we displayed a poster bearing the legend “ English Fans Let Down (EFL) “…..

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•   …. and a second was what we entitled “Shabby Anniversary” to mark one year of inaction from the EFL since the court judgement. This involved around one hundred and sixty supporters lining up outside the ground, each holding up a laminated card bearing one page of Marcus Smith’s Judgement

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•   we took our plight to as many radio, Press and TV outlets as we could

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•   and continued to lobby Parliament, targeting the DCMS Select Committee, the All-Party Parliamentary Football Group, local MPs and invited our exiles to write to their constituency MPs too

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This sounds like - and was - an extraordinary investment of time and effort for very little in the way of direct reward. Indeed, given that the eventual issue that broke the logjam for us was the Oystons failure to promptly pay their debt to Mr Belokon, which eventually lead to the club being placed in the hands of a Court Appointed Receiver, it could legitimately be asked why we bothered at all.

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The answer was that:

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•   we did not want what we saw as deliberate inertia on the part of the EFL to lead to us being forgotten.

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•   we wanted to remind the supporters of other clubs that we were ALL (and still are) only one bad owner away from disaster.

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•   we still harboured (faint) hopes that we might shame the football authorities into doing the right thing

 

Oddly enough, with the benefit of hindsight, our belief is that we have been lucky. Without the court case, we may never have:

 

•   gained access to the information we needed with regard to what was really going in in our club….

 

•   …. without that information, we would have been much less effective in pressing our case; and

 

•   without the outcome of that court case, and a football-loving judge who tried his hardest to protect the club’s long-term future, we might never have got to where we currently are.

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One thing we do know for certain, is that the current, very positive position the club is in is despite the footballing authorities - and not because of them.

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Conclusion

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Much of this part of our submission is about our relationship with - and perceptions of - the EFL. Having run what one commentator famously described as “one of the most brilliantly orchestrated “fan protests ever, this may seem odd.

 

We certainly spent a lot of time campaigning about and mobilising against the Oyston family. The annual protests were very powerful, and the set-piece media events did the job they were designed to do. The “Not A Penny More” campaign - by which we boycotted home games, only bought tickets for away games from the host club, and created and sold our own merchandise as an alternative to that available in the club shop  - was hugely effective.

 

But once the court judgement had been made at the end of 2017, the main focus of our efforts was the EFL, and regrettably, our view was (and still is) that they were as much an obstacle to us as the Oyston family were.

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Part of this stemmed from what we saw as a simple lack of managerial ability. They struggled to understand their own rules, did not seem able to gather the intelligence they needed or correctly interpret what information they did have.

 

But mostly, our frustrations with them went to the heart of their culture. They did not seem inclined to engage with us on any level, if they could avoid it. When they did, they were secretive and aloof. We had no confidence in their ability to do due diligence, let alone confront what we knew to be complex problems. They were not fit for purpose, because they did not share the purpose we wanted them to be fit for.

 

Our case does not stand in isolation. There were cases of acute managerial failure at clubs before ours, there have been a good number since, and the anecdotal intelligence we have suggests that there are plenty of clubs who are at real risk of failure in the future. Our view is that the football authorities as a collective are no nearer being up to the task of tacking the regulatory role than they were a decade ago. We need a new approach - one that actually raises standards of governance as well as dealing with problems - and we need new people to develop it.

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Part B of this submission sets out our ideas on what a new regulatory framework needs to include.

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ANNEX A1 : MISMANAGEMENT OF BLACKPOOL FOOTBALL CLUB - A CASE REVIEW MODEL

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This document was originally written and shared with the EFL in February 2018. It reflects a very different reality in place at the time; for example, the prevailing wisdom was that the most realistic proposals for reform of governance still involved the FA acting as the ultimate custodian of the role, with considerable delegation to the Leagues.

 

This is clearly no longer the belief of many stakeholders, including the Blackpool Supporters Trust. However, as a historical document this Annex amply demonstrates the lengths that we were prepared to go to help the EFL in particular take a progressive approach to regulation. It is reproduced here without amendment.

 

 

Introduction & Context

 

This document has been prepared by the Blackpool Supporter’s Trust (BST), but only with the greatest reluctance. In our view, the near-ruination of a famous football club that has been presided over by the Oyston family in recent years (and particularly since the club’s elevation to the Premier League in 2010) should have given great cause for alarm within both the Football Association (FA) and the English Football League (EFL).

 

If that state of alarm exists within the two governing bodies, there has been no sign as yet of that being translated into any decisive action. BST have lobbied the EFL in particular about the need for action over a period stretching back for years, not months.  In doing so, they have pointed to the club’s precipitous fall down the League pyramid, the increasingly heavy-handed efforts to suppress criticism from supporters by using legal action, and the astonishing deluge of damning evidence that has emerged during the court case involving the Oyston family and minority shareholder Valeri Belokon (VB) since the summer of 2017.

 

It is the view of BST that the sheer weight of evidence of wrong-doing, spite and incompetence on the part of the Oyston family makes a prima facie case for the EFL (as Blackpool is now a Football League club) to investigate the club and what has befallen it. We think that the mere fact of an investigation - or case review - would send a powerful message to the League’s other 71 clubs that the EFL take these matters seriously. But in our view, there are a number of other good things that could be taken from what has been a distressing series of events:

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•  instigating a case review would show the EFL leading the way on an issue of national concern.

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•  it would provide “real” data to allow the EFL to assess its own policies & procedures.

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•  it would highlight any gaps or deficiencies in the EFL’s powers to act

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•  it would position the EFL as more than a mere shop steward for its 72 members.

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The position of BST is that the interests of our club - and the wider game in England - is best served by a strong, vigorous EFL taking on cases of endemic failure as robustly as possible. It is the kind of leadership role that the English game needs and which is currently not being delivered. In our view, shining a light on what has happened at Blackpool would allow us all to learn lessons for the future, and would highlight areas where the regulatory framework for the game is currently lacking. Crucially, it may help to make sure that the supporters of other football league clubs never have to go through this kind of trauma again. Below, we offer our thoughts on what such a review could  look like, and commend it to the EFL as a model for them to adopt.

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The review model

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The model favoured by BST involves the following stages:

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•  identifying the chronology of relevant events and their impact

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•  taking a rounded view of the situation by interviewing a range of interested parties.

 

•  undertaking an honest critique of the roles performed by key bodies like EFL.

 

•  identifying the barriers to action

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•  identifying areas for learning and change

 

 

The chronology of events

 

Failure never occurs in a vacuum, and often the wider context, the nature of key relationships and certain key events have a major impact on the nature of the failure and how it comes about. No two cases are ever the same, but some due diligence about “the how, the who and the when” often gives a broader understanding of WHY failure has occurred.

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In Blackpool’s case, this needs to cover:

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•  a brief history of the period prior to the partnership between the Oyston family and VB. The Oyston family took over the club in 1987 and entered into a partnership arrangement with VB in 2006.

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•  the EFL’s rules on ownership and the “fit and proper” test

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•  the nature of the relationship with VB and its implications (including its deterioration). Ordinarily, this sort of evidence would be very hard to both gather and evaluate, but in this instance, uniquely, a full history and analysis of it was set out by His Lordship Marcus Smith in his court judgement of 6 November 2017

 

•  the growing fan concern post 2011 and the Oyston’s reaction to it. This inevitably has to consider the formation of the Seasider’s Independent Supporter’s Association (SISA), its evolution into the Blackpool Supporters Trust, and the history of litigation undertaken at the behest of the Oyston family against individual supporters

 

•  the nature of lobbying undertaken at the national level by BST and the  view taken of it - to include a critique of EFL mechanisms for fan engagement

 

•  the EFL intervention re VB and its consequences. Again, this needs to be informed by and take account of the Judgement issued by Marcus Smith

 

•  post court case paralysis, and latterly the volatile nature of governance within the club

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Taking a rounded view

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It should be axiomatic in reaching conclusions about what has gone wrong at Blackpool, and what can be learned from it, that a wide range of views should be canvassed from a variety of stakeholders with differing perspectives.

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In recent times, this has not been the EFL way. The approach they have taken to consultation on a variety of issues has been to merely consult with the clubs themselves - even when there have been widespread concerns about the behaviour of those very clubs.

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In our view this leads to a narrow view of key issues that is often based upon incomplete, inaccurate and sometimes plainly misleading information. In the specific case of Blackpool FC, where most of the disquiet is about the club and its owners, a much bigger effort has to be made in any case review to collect relevant perspectives wherever they are. BST suggest that this should include :

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•  the Oystons and Valeri Belokon (if possible)

 

•  policy makers at the EFL and the FA

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•  national supporters groups like the Football Supporters Federation (FSF) and Supporters Direct (SD)

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•  local interest groups including BST, local councillors and local businesses.

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•  non-aligned supporters of the Club who may not be Members of any particular group, or who support the club from a distance.

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•  informed representatives of the local, regional and national media

 

 

Critique/Barriers/Learning

 

It is the view of BST that these three areas are closely entwined and it would therefore be difficult to look at them separately without some duplication of effort.  This is not simply about gathering information, but also about analysing it honestly, without fear or favour, to ascertain ways in which the whole of the football community can learn from failure, whether it be at Blackpool or anywhere else.

 

As such, it requires a culture which is based upon learning and improvement for the future, rather than defensiveness about errors or omissions in the past. It also requires a culture based upon monitoring clubs and seeking to identify problems as early as possible, rather than - as in Blackpool’s case - waiting until a crisis point has been reached.

 

The following list of issues for consideration are questions which BST believes are germane to the problems at our club. But they could easily be applied in any other case in the future.

 

•  what type of intelligence has been gathered in this case, and where from? How complete is it? How has it been used?

 

•  whistle blowing - what was the source of concerns and complaints? Who was responsible, when did they raise issues, and how was their contribution acted upon?

 

•  what could have been done to respond, using existing powers? What might still be done now?

 

•  what ideally SHOULD be/have been done? How does that compare with the powers to intervene that currently exist?

 

•  what constraints (policy or legal) prevent or inhibit  action? How could they be removed?

 

•  what recommendations could be made for change? Who would they apply to? How would they be followed up?

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•  could early warning systems be developed? What would they cover, and who would use them?

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The audience for the Case Review

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The obvious audience for the review that BST are pressing for includes the EFL (as the regulatory body in the lead) and the supporters, owners (present and future) and employees of Blackpool Football Club.

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However, to the extent that this Review is about the national regulatory framework, its fitness for purpose and the way in which it has been used, there is a much wider group with a vested interested in the quality of it and the outcomes that eventually emerge. The BST view is that these include:

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•  Parliament (Ministers, DCMS Select Committee, local MPs)

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•  national Groups (FA, FSF, SD)

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•  the Independent Football Ombudsman

 

•  the footballing media

 

The BST view is that at the conclusion of any review its findings should be shared with - and scrutinised by - all of the groups listed above as a bare minimum.

 

 

Conclusion

 

As stated above, BST has long wanted the EFL to take the lead in this case and to demonstrate that it would use detailed examination of one case of serious failure as a platform for changing the way that regulation and scrutiny of the English game works.  In publishing these ideas about how this work might be done, we hope to give the EFL a head start in addressing not only our parochial concerns, but in applying them for the greater good of supporters more generally. We hope that they will respond to the challenge constructively.

 

Blackpool Supporters Trust

February 2018

 

PART B : AREAS REQUIRING REFORM

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General

 

From the point of view of the supporter - by which we mean someone whom attends games in person regularly - football in England is not only managed very poorly, it is also not managed with their interests in mind.

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In correspondence with the EFL and others over recent years, we have remarked about the extent to which football fans are increasingly becoming unpaid extras at their own sport. In particular:

 

•   big decisions - about competition structures, allocation of revenues, standards of behaviour and kick-off times (to name but four) are taken in secret, without taking account of what we want, or  giving us only limited  opportunities to make our views known

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•   the sustainability of individual clubs - and by definition, the Leagues they play in - is increasingly under threat, with no evidence that there is any strategy in place to manage this. COVID has ruthlessly exposed what a fragile entity the League pyramid really is

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•   the willingness and ability of football authorities to protect the integrity of the sport is highly questionable. Too many cases of concern are handled very slowly (Derby County, Bolton Wanderers), or not addressed at all  ; and different leagues apply rules in different ways

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•   where the football authorities DO act, their decision-making processes lack transparency. Such decisions as are made often seem lacking in due diligence (Bury) or capricious (Dover Athletic)

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•   persuading football authorities to take action to address concerns is very difficult. In England, the Leagues (notably the EPL and EFL) operate like glorified shop stewards acting on behalf of club owners, who thus enjoy the considerable luxury of regulating themselves, without fans having any effective redress.

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•   the balance of consideration of the interests of stakeholders is wholly out of kilter. From our perspective, the interests of broadcasters seem to carry far too much weight, particularly in terms of scheduling of matches. It is (for example) increasingly difficult for supporters who wish to watch their club away from home to make plans to do so, particularly if they play in the EPL, or are in the thick of competition for either promotion or relegation.

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•   equally, the EFL has over a period of years seemed to be in thrall to the EPL. The wholesale vandalism inflicted upon the EFL Trophy - with the ensuing collapse of supporter interest - is the most notable example of this.

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•   relationships between clubs and their supporters are increasingly strained. Dissatisfaction with playing performances and / or results is part of the rich tapestry of “the footballing experience” - but we are here drawing attention to the fact that at many clubs fans do not know nearly enough about who their club owners are, who they are accountable to, or indeed what their long-term intentions might be. Owners & Directors Tests obviously exist - but the evidence to hand suggest that they are not rigorous enough, and are not being applied as robustly as they should

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Generalities aside, the game has some very serious, systemic problems:

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a)     the current system of regulation does not work and falls well short of what be called good practice.

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It is simply not true to say that the football authorities lack the powers to act to tackle many of the profound problems that the game faces. The EFL in particular has hundreds of powers, covering a huge range of topics such as Membership, Players, Broadcasting & Sponsorship, and its website section covering governance devotes entire sections to Investigations & Disciplinary Proceeding and Arbitration. The EPL routinely claims that it spends significant sums regulating the activities of its member clubs.

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The fact that there are huge, and demonstrable levels of dissatisfaction with the way football regulation currently works have nothing to do with the capacity of footballing authorities to take action - and everything to do with their willingness and managerial ability to do so.

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Failing clubs, and clubs in some kind of induced crisis, have become a commonplace part of the football landscape in England. In recent years, Coventry City, Charlton Athletic, Leyton Orient, Blackpool, Blackburn Rovers, Hull City, Hereford United, Scarborough and several others have suffered grievously, usually because of mismanagement and / or egregious owner behaviour.  It is difficult to see what the current regulatory arrangements have done to help any of these clubs, and at a number of them, supporters of the clubs concerned have found out the hard way that there is a considerable cultural inertia in the game’s governing bodies. This has meant that problems are allowed to become deep-seated, and this  institutional timidity means that issues are not vigorously confronted even when there is overwhelming evidence of them (see Part A of this submission)

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The problems around the lack of rigour are compounded by the lack of urgency with which the main regulatory bodies handle cases. The issues around the takeover of Newcastle United (for example) are undoubtedly complex, but they have been allowed to fester over a period of many months. The fans of Derby County (at the time of writing) are living in a limbo caused by the very slow speed at which their club’s circumstances have been investigated, and the snail-like working of the EFL’s processes; they cannot be absolutely sure which Division they will play in, or whether they will be subject to a points deduction wherever they end up. Fans of clubs like Blackpool, Charlton, Wigan, and Bolton will all testify to the fact that these are not isolated cases. (see Part A again)

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There is no sense that the Leagues do anything other than react - slowly - to individual cases as and when they arise. Our view is that there is far more to regulation than merely punishing clubs for wrongdoing, and that an effective regulator should :

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•   be able to promote and protect the quality and fairness of sporting competition.

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•   act where necessary to protect financial sustainability and integrity - of clubs and competitions.

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•   protect the interests of consumers - i.e. supporters

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•   gather intelligence and data about the performance of regulated clubs such that it can take action that mitigates problems quickly.

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•   identify and promulgate good practice.

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•   undertake regular, set-piece reporting on the overall health of the sector.

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In our view, the current arrangements are not delivering on ANY of the above tests - and therefore cannot be allowed to stand.

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b) current methods for revenue distribution are inequitable, and encourage reckless behaviour

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Whatever problems English football has, a lack of money is certainly not one of them. Even in a difficult global climate, the extension to the current EPL broadcast sponsorship deal to 2025 announced recently ensured that eye-watering amounts of cash will continue to come into the game.

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Given the huge sums involved, there is no good reason why the clubs who make up the pyramid (in its entirety) should not be able to operate on a sustainable footing, as there is plenty of money to go around - or should be.

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However, the reality is very different. Specifically :

 

•  vast swathes of the TV revenues coming into the game “stick” at the EPL level, where there are huge rewards on offer to the clubs (along with players and agents) at the very top

 

•  the largesse extends to all clubs who make up the EPL, even those who routinely fail to achieve anything more than simply remain in the Division

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•  the gap between the EPL and the Championship is huge, and the scramble to escape the latter upwards is having a profoundly negative impact upon owner behaviour. Increasingly, clubs in the second tier are spending more in wages than they generate in income, and there is some evidence to suggest that they are becoming increasingly creative - including in some cases taking a cavalier approach to one-time assets like the very stadium they play in - in order to spend money that they don’t have

 

•  these gaps between Divisions are a feature of much of the pyramid, and for smaller clubs the reality is that one of the drawbacks of success on the field through promotion is that it is increasingly difficult to be competitive at the level above.

 

•  the problem at the EFL level is compounded by the payment of parachute payments to clubs falling out of the EPL, which is supposed to reflect the difference in funding levels between EFL and EPL and cushion them from the impact of relegation. All of which begs the question - why should they be protected in this way ?

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•  in 2018/19 the amount of money paid to eight clubs in receipts of parachute payments was around three times as much as that paid to the other sixty four clubs in the EFL put together. It is a curious system that rewards a small number of clubs for relative failure ; a curious system that provides those clubs with a huge competitive advantage in the years after they do fail ; and a curious system that fails to see that any prudent business would protect itself from these risks by the simple expedient of building performance pay and break clauses into contracts. In our view, it would be a far more sensible approach to avoid creating these anomalies in the first place

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•  we also feel that the introduction of a salary cap in Leagues 1 and 2, and the proposal to introduce one into the Championship, was a progressive move that would have done a good deal to mitigate the inequities that exist in the system. This would have been especially so if they had been accompanied by the abolition of parachute payments and the re-allocation of that money across all EFL clubs on a pro-rata basis (more on this later). 

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•  the intervention of the Professional Players Association (PFA) that led to the salary cap being withdrawn is therefore regrettable. In their (understandable) zeal to protect the salaries of some of their members, we feel that they have actually undermined the job security of many, many more. In our view, the salary cap should be re-instated post haste, and extended to the Championship at a markedly lower level than that which has been mooted to date (see Appendix B5).

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•  We are of the view that solidarity payments should remain, and be enshrined in legislation. In our view, they can and do offer a measure of security to all the clubs that are affected, and if anything, their scope should be extended (more on this below).

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What needs to change?

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In the view of the Blackpool Supporters Trust, there are three broad areas where fundamental reform is needed. The list of issues described below is not exhaustive; but we believe it represents the very minimum that is needed to make sure that our national sport gets the kind of governance that it deserves - and one that brings us into line with most of the countries in Europe.

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a)   we need just one, single, wholly independent Regulator.

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We believe that many of the existing problems around regulation stem from two things:

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•  there are multiple bodies, trying (and mostly failing) to do different things in different ways.

 

•  there is no way in which regulation run by the clubs, for the clubs, could ever be described as “independent.”

 

 

The Regulator needs a very broad remit, preferably established under statute. We think this includes :

 

•  a broad range of powers to facilitate improvement in the way that clubs AND Leagues operate. This includes the ability to offer training and support, facilitate remedial activity to address shortcomings in performance, as well as more intrusive sanction powers

 

•  these powers should also be framed in a manner that allows the Regulator to report by exception on holistic issues where it believes that changes  in policy might be required, and that this bespoke reporting role should include the ability to look across the piece at standards of governance within its bailiwick, and highlight good practice

 

•  we believe that sanction powers need to be equally widely drawn, and whilst they should include conventional powers to issue fines and other penalties, they should also include a range of measures designed to target owners and Directors of clubs, rather than their supporters

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•  in extremis, we think that the Regulator should be able to require clubs to accept support from an external third party, which could include that third party carrying out some of the club’s functions for a specified period or under terms stipulated by the Regulator.

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•  the Regulator should also be mandated to undertake research, and then issue binding recommendations to clubs and / or Leagues upon issues such as revenue distribution, supporter representation on club Boards, club licensing and conduct of Owners & Directors to name but four.

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Our belief is that all the above elements of the Regulator function should be created by legislation because this is the best way to ensure that we achieve the proper degree of rigour in the way that clubs and Leagues are scrutinised.

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However, there are other components to ensuring that the Regulator is robust. In particular we think legislation should provide explicitly for how the Regulator should be funded. Our preference would be for the funding to come from three  main sources :

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•  the first being Government Grant set by HM Treasury, and

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•  the second being a form of levy, applied to  broadcast revenues (preferably as a top slice, rather than a proportion of revenue), the major betting companies and players agents

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•  thirdly, we  also think that that funding and other resources currently devoted to regulation by the various Leagues should be redirected to the Regulator.

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Our rationale for favouring mixed funding is simple :

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•  firstly, we think that maintaining an ongoing financial relationship with the Government is the best way to ensure continuing political buy-in and to ensure that the Regulator has a reporting line into Parliament.

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•  secondly, we think that the football community itself should bear a significant proportion of the costs of regulation - and the resources currently allocated to this purpose by the Leagues should instead be vested in an organisation that is truly independent and will be able to command a far higher degree of confidence than is currently the case.

 

We think that the role of the Regulator needs to separate from the handling of what would normally come under the heading of customer complaints. As now, we think that individual complaints by supporters should be handled by the club and, if that does not resolve issues, should be referred to an Independent Football Ombudsman (IFO).

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This new IFO should not be confused with the current body created by and answerable to the EPL and EFL, which in our view is not independent nor in our experience nearly robust enough. Our limited contact with it has been dire; in early 2019 we took up the cause of our of our fans who had complained to the IFO  about the EFL’s failure to respond to the 2017 court case, and the lack of openness it had shown when challenged about this.

 

The response was very revealing; the IFO informed our fellow fan that it did not view supporters as being “participants” in the sport. Moreover, it was of the view that the EFL could only regulate clubs in a manner “authorised” by them. Faced with this kind of mindset, we at BST took the view that engaging with the IFO in the future would be pointless.

 

The new IFO should be :

 

•  answerable to its own Board, which should have strong (possible majority) representation from supporters groups.

 

•  and the IFO Board itself should report to the Regulator about overall standards in complaint handling, identifying commonly arising issues and highlighting good practice

 

 

We have above set out some far-reaching proposals for change that would give the new Regulator significant new powers. In turn therefore, the Regulator itself needs strong lines of accountability. Our preferred approach would see it :

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•  managed by a Board made up of the main stakeholders (supporters, players, FA) and chaired by an independent figure with no footballing affiliations.

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•  placed under a duty to report to Parliament annually on its work, highlighting any issues of major significance or concern.

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•  obliged to publish information on its own performance against agreed metrics.

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•  publish annual accounts.

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b) the way in which revenues - particularly TV revenues - are distributed needs to be changed to make it more equitable

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We think that the current, grossly distorted distribution arrangements need to be completely overhauled to make the rise in funding available as clubs progress up the League far more incremental than they are currently. Promotion or relegation should not lead to the huge disruptions in operating models that are often seen now. With this aim in mind:

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•  solidarity payments from the EPL to others should continue, and we think that they should extend to cover all clubs who fall within the remit of the Regulator, in order that the latter can make comparisons between the performance of clubs who operate under similar financial arrangements. That would mean that solidarity payments would go to all clubs up to and including level seven of the pyramid and we think should mean that the total amount in the “solidarity pot” rises significantly in real terms, and that EFL clubs do not see a reduction in their current levels of payments.

 

•  as well as extending the reach of solidarity payments to level 7, we also believe that the manner of distribution of them needs a drastic overhaul. At present, it is wholly unfair and massively over rewards clubs in the Championship to the exclusion of everyone else. Appendix B1 attached illustrates this

 

•  we would re-introduce the salary cap for Leagues 1 and 2 from the beginning of the 2022/23 season at the latest. The levels would need to be adjusted to take account of any changes to solidarity payments (see above), and we think that there is a strong case for extending the cap beyond the EFL and through to level seven, to match the remit of the Regulator

 

•  we would also propose that the Regulator be mandated to set a salary cap level for the Championship and EPL, with the aim of introducing it (ideally) from 2022/23, and certainly no later than 2023/24. In our view, the previously mooted figure of £18m as an annual salary cap for the Championship was significantly too high and will be even more inappropriate if the reach of solidarity payments is extended as we suggest. A salary cap in the range £11.5-12.0m would be more appropriate (see Appendix B5 attached)

 

•  we would abolish parachute payments and re-allocate the money at least across the 72 EFL clubs and (preferably) through to level seven if at all possible. This needs some careful thought; we would ideally like to reach a situation whereby all clubs from levels 2-4 (and possibly lower) are in a position whereby total revenue from TV sources is as close to 100% of their salary cap as possible.

 

Appendix B2 attached demonstrates the enormous advantage that club who are in receipt of parachute payments get ; Appendix s B3 and B4 use data from 2018/19 to demonstrate that a pro rata re-allocation of parachute payments across the EFL could bring all clubs up to or very close to an appropriate level of salary cap (in the Championship) or the actual salary caps that were in place at the beginning of the 2020/21 season (League 1 and 2)

 

These tables are only illustrative, and do not attempt to model the impact of extending solitary payments to level 7. 

 

However, we believe that the cost of extending the reach of these payments to level 7 would be relatively modest. Setting payments for levels 5-7 clubs at around two thirds of the rate paid to the Division above would “cost” around £25m a year (on 2018/19 figures). Put another way, it represents :

 

•  a sum slightly under 10% of the monies currently being paid out in parachute payments to around eight clubs ; or

 

•  around £1.25m shaved off the top of TV payments to each of the twenty clubs in the EPL

 

This relatively modest re-distribution of solidarity payments would provide often game changing amounts of sustainable, regular support to the one hundred and thirty four clubs who make up levels  5-7 of the pyramid.

 

This package of change would greatly benefit the clubs operating below the EPL, in that more money would permeate further down the pyramid than is currently the case. It should be pointed out though that it still leaves a considerable annual windfall in the hands of EPL clubs; whilst we think that some of this surfeit should (in large part) be used to underwrite the cost of independent regulation, if a salary cap is introduced for the EPL it would in all likelihood mean that EPL clubs would continue to be very cash-rich, as things stand.

 

We think that the Regulator should be charged with looking at this issue, with a view to identifying ways in which EPL clubs could continue to reap a significant benefit from their status, but any residual money available could be re-allocated to sustain Leagues, competitions or other philanthropic causes that the game as a whole wishes to support.

 

In doing so, the Regulator should also look afresh at the proportion of TV monies that are shared with clubs below the EPL. All of the proposed changes above involve finessing the current funding distribution arrangements to make them less inequitable. But removing the inequities in the system  could be far more achievable if those distribution arrangements were revisited from first principles.

 

c) the policy role of the Leagues from levels 1-7 need to be significantly curtailed, and the manner in which they discharged their reduced functions should fall within the remit of the Regulator

 

For the sake of clarity, we think that the EPL, EFL and NL in particular should play no significant managerial  role in the way that English Football is regulated. In our view their track record affords fans absolutely no confidence that they are are capable of discharging their current role, let alone the much more widely drawn, pro-active one  that we have described above.

 

We are of the view that they should continue to be responsible for day-to-day administration of the competitions that they are charged with managing. But the way in which they carry out this role should itself fall under the auspices of the new regulator. Specifically:

 

•  the Regulator should be able to inspect the performance of the EPL, EFL, National League, Northern Premier League, Isthmian League and Southern League, as well as the top two leagues in women’s football.

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•  the Regulator should be able to make binding recommendations to all the above-mentioned leagues regarding the manner in which they perform their functions

 

•  in the event that the Leagues fail to abide by those recommendations, the Regulator should be able to require them to accept external support in order to do so, and in extremis should be able to remove stipulated functions from the control of the one or more of the Leagues, and vest them in a third-party Nominee, for a recommended period

 

•  the Leagues should make no changes to the structure and format of the various Competitions falling within the remit of the Regulator, without first consulting the Regulator and gaining their approval. This should apply not only to the leagues described, but also the cup competitions that the Member clubs play in - namely, the FA Cup, EFL Carabao Cup, EFL Trophy, FA Trophy and Women’s FA Cup

 

Conclusion

 

English football is at something of a crossroads. Disenchantment with the extent to which the elite in the EPL have become distanced from the rest of the pyramid has been growing for some time. Even within the top Division, the manner in which TV revenues are distributed means that for some clubs simply staying in the Division is a major priority - competing for and winning trophies seems a secondary consideration.

 

The essence of professional sport is advancement through fair competition. But the current structure of the game makes the former a double-edged sword (especially for smaller clubs), and the latter is more an illusion than it is a reality.

 

The Leagues who preside over the pyramid have proved themselves unequal to the task of regulating it time and time again. Clubs like Bury and Macclesfield have been lost altogether; Football League founder member Bolton Wanderers nearly went with them. Clubs like Blackpool, Hull City, Leyton Orient, Coventry City and Charlton Athletic have seen mismanagement on an epic scale are not confronted and go largely unpunished.

 

Codes of Conduct are toothless. Owners & Directors Tests are not consistent across the piece and not rigorously applied in any case. Supporters at many clubs struggle to know who actually owns their club, and takes the decisions that affect it, let alone have any meaningful voice in the management of it.

 

Clubs should be at the heart of their local communities. These are the roots from which the game emerged in the late 19th century, and it is from those roots that the game draws its traditions, its history and its allure. In our view, the extent to which club owners understand this, preserve it and enhance the way that it is manifested in their area should form part of the way in which  they are judged.

 

Their role is one of stewardship over an institution to a much greater extent than it is mere management of a business. We need to get back to these community based values as soon as possible; the changes that we suggest in this paper will help to deliver them, and we need to make the game a byword for propriety and probity, rather than the fertile hunting ground for the unscrupulous that it has become.

 

 

Blackpool Supporters Trust

 

June 2021

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APPENDIX B1: SOLIDARITY PAYMENTS BY DIVISION 2018/19

 

This is a simple representation of the way in which solidarity payments were paid by the EPL from TV revenues to the various leagues of the EFL in 2018/19.

 

There is a strong bias towards the the Championship, which receives nearly seven times as much money in total as League 1; and ten times as much as League 2

 

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APPENDIX B2: PARACHUTE VERSUS SOLIDARITY PAYMENTS 2018/19

 

This chart shows the disproportionate power of parachute payments, typically paid to around 7-8 clubs in any given year.

 

The amount paid out in parachute payments in 2018/19 (£265.0m) was almost three and a half times that paid as solidarity payments to Championship clubs as a whole, and almost twenty-four times that paid to clubs in League 2.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX B3 : MODELLING THE REDISTRIBUTION OF PARACHUTE PAYMENTS : LEAGUE 1, 2018/19

 

modelling the impact on League 1 clubs if parachute payments were redistributed pro rata across all EFL clubs (as set out in APPENDIX B1). Figures in Column 1 (blue) relate to the 2018/19 season.

 

Such a re-allocation of parachute payments would have resulted in League 1 clubs receiving solidarity payments of around 93% of the salary cap in place at the beginning of the 2020/21 season.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX B4 : MODELLING THE REDISTRIBUTION OF PARACHUTE PAYMENTS : LEAGUE 2 2018/19

 

modelling the impact on League 2 clubs if parachute payments were redistributed pro rata across all EFL clubs (as set out at APPENDIX B1). Figures in column 1 (blue) relate to the 2018/19 season.

 

Such a reallocation of parachute payments would have resulted in League 2 clubs receiving solidarity payments of around 108% of the salary cap in place at the beginning of the 2020/21 season.

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APPENDIX B5 : MODELLING THE REDISTRIBUTION OF PARACHUTE PAYMENTS - CHAMPIONSHIP 2018/19

 

modelling the impact on Championship clubs if parachute payments were redistributed pro rata across all EFL clubs (as set out at APPENDIX B1). Figures in column 1 (blue) relate to the 2018/19 season.

 

Such a reallocation of parachute payments would have resulted in Championship clubs receiving solidarity payments of around 64% of the widely mooted salary cap under discussion during the 2020/21 season.

 

This figure is markedly lower than that for League 1 and League 2 clubs as depicted at APPENDICIES B3 and B4. This skewing results from pitching the proposed salary cap at £18m; achieving a correlation between cap and notional award broadly in line with that achieved for the other Divisions would imply setting the salary cap for the Championship at around £11.5-12.0m.

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