LONDON (Reuters) - Prospective owners of English soccer clubs will need to win the blessing of a new regulator as part of measures announced on Friday to improve the governance of the game following criticism from politicians.
English Premier League Chief Executive Richard Scudamore said the change would bring “added rigour” to the way rules on ownership were enforced but added it would not be a panacea.
“There is no regulatory system in the world that will ultimately stop a club failure,” Scudamore said.
Scudamore said soccer should celebrate the wealth generated since the 20-team Premier League broke away from the rest of the professional game two decades ago, signing a series of lucrative deals with pay TV operator BSkyB.
“It’s good news that there is lots of money in the game but it needs careful regulation to make sure that clubs remain sustainable,” he said.
Critics say the rewards on offer have encouraged clubs to build reckless levels of debt to try to secure Premier League status and that the game is too expensive for the ordinary fan.
Scudamore was speaking at Wembley Stadium at a briefing on governance reforms proposed jointly by the English Football Association (FA), the Premier League and the Football League -- representing the 72 clubs in the lower divisions.
The proposals follow a parliamentary inquiry last year that said the existing set-up at the top of the national game was ill equipped to run what has become a multi-billion pound business. Sports minister Hugh Robertson had set a deadline for a response of the end of February.
Under the proposals, a licence system will be introduced to ensure clubs meet minimum standards on financial regulation, ownership and their stadium.
The FA, the game’s ruling body, will slim down its board from 14 members to between 8 and 12 to streamline decision making. Clubs will also be forced to improve communication with fans by appointing a “Supporter Liaison Officer”.
The parliamentary inquiry identified debt as “a serious problem throughout the football pyramid”.
The financial plight of struggling clubs has been highlighted after championship (second division) club Portsmouth last month went into administration for the second time in two years. In Scotland, champions Rangers face a battle to survive.
Scudamore noted that the rules on club ownership had been tightened since Portsmouth in 2010 became the first Premier League club to go into administration.
A new FA Regulatory Authority will help to ensure that these tougher rules are being enforced and gradually take over full control for enforcing them from the leagues. Its members will be experienced business regulators but not necessarily from a soccer background.
Football League chairman Greg Clarke said clubs in the lower leagues had built up close to one billion pounds ($1.58 billion)in debts but were beginning to rein in spending.
“The level of debt that they need to continue operating will come down but it’s a 10-year journey,” he said.
Fans of a number of struggling lower league clubs have tried to fund rescues in recent seasons while, at the other end of the scale, a group of wealthy businessmen wanted to buy champions Manchester United from the American Glazer family.
“If supporter ownership can be facilitated, it should be encouraged,” Scudamore said.
However, Clarke saw practical problems as clubs tended to be either too big for fans to buy or a risky investment.
“We don’t want fans to lose their money,” Clarke said. ($1 = 0.6323 British pounds)
Reporting by Keith Weir, editing by Pritha Sarkar