3 recommendations to help the EFL and its financially struggling 72 clubs
The answer is socialism (only half-joking)
Photo by Denniz Futalan from Pexels
As the 2018-19 European football season has drawn to a close, there have been several articles on the dire financial situation facing EFL clubs in particular as we head further into the uncertain and potentially disastrous 21st century.
Martyn Ziegler’s piece for the Times pointed out that roughly 75% of EFL clubs are in a deficit situation, which while not ideal, isn’t really the best way to gauge the overall state of a club’s finances. But the news is admittedly not good.
Then we had Miguel Delaney’s piece for the Independent, which was strong on anecdotes from various league insiders on the dire state of the lower league game, but weaker on convincing, long-term facts and figures.
The rundown is that beyond the in-built financial disparities that come with having the TV-money-heavy Premier League at the top of your football league pyramid, the viewing habits of a new digital generation are removing the remaining incentives for local fans to pay £20 to go see a game at their local ground. To me, this argument sounds quite similar to the one to justify the 3 p.m. kickoff blackout, which is thin, to say the least, and doesn’t carry much weight in the experience of sports leagues in North American.
Most of the anecdotes on the financial struggles of the lower leagues in Delaney’s piece come from people working for the clubs, a group who may not be entirely unbiased about their own responsibility for the current situation.
That said, I also don’t think you could ‘solve’ the problems facing the lower league merely through more competent management, i.e. a wider embrace of analytic (although I do think you could vastly improve the situation if clubs even began to entertain the many ways they could go about recruiting better players without spending exponentially more money).
However, there are three things that I think could help ameliorate the growing financial gap between the PL and the 72:
1. A national report on the state of EFL and non-league finances
Similar in scope and influence to the Taylor Report, it would be invaluable to get a more detailed sense of how the financial picture has shifted for the lower 72 UK clubs since the Premier League was formed, beyond a single year’s profit/loss. Perhaps a Swiss Ramble-esque financial audit of every lower league club going back two decades. It should also look into whether or what extent FFP has helped stabilized transfer fees.
The report could include actual hard data on shifts in gate demographics and sales, polling of football fans on their preferred viewing options, any overall increases in club spending corrected for inflation, and a better understanding of how important these clubs are both culturally and economically to their surrounding communities.
The report might also include a series of evidence-based recommendations to help provide greater stability to the lower leagues, everything from ownership structures to abolishing transfer fees to mandating some sort of luxury tax. The idea is to go beyond anecdote and try to get a sense of what the actual trends are, how they relate to increased TV revenues and digital streaming, and then find a way to mitigate the problem.
2. Increased fan ownership
This, too, may have to be government-mandated, but I think there are a lot of built-in positives to increasing the number of fan-owned clubs, or even perhaps going with exclusively fan-owned clubs below a certain tier, say League One, and then providing a path to single-owner transition (and greater wealth) as each moves up the pyramid.
For one, the supporters trust ownership model has a decent record of stability, particularly in Germany with the 50+1 rule. Fans of lower league clubs are more likely to be life-long supporters, and while they may be ambitious for their club to win, they are also more incentivized to make decisions with an eye to longer-term stability and doing what’s best for the local community.
Moreover, fan-owned clubs can offer overseas supporters something far more memorable than a shirt or even a streaming subscription, such as a stake in the actual team and a small but important role in its decision-making process. Considering the relatively small international pool of fans for lower league clubs, this seems like a particularly good option.
Though fan-ownership has hardly been a panacea in English football, as a model it has performed impressively considering it makes a small minority of teams, competing with more traditional ownership structures. And if enough clubs embrace the model, in conjunction with some sort of revenue sharing arrangement, it may have a deflationary effect on transfer spending, which will help provide greater solvency all around.
3. Greater involvement of EFL in providing knowledge and best practices to member clubs
It is incumbent on the EFL to receive the funding and resources to ensure its teams have the best possible means at their disposal to succeed, if not on the pitch, then on the ledger sheet.
Practically, three teams will always have to finish bottom, so this is not meant to be a cure-all for losing. Rather, the point is to provide clubs wide-ranging access to effective knowledge resources—perhaps best practices in club governance structures, free access to an international player database, and evidence-based advice on commercial practices, everything from increasing ticket sales to social media.
This might necessitate the EFL working with football consultancies and data analytics firms to help provide documents and resources with an eye to preventing the club from making devastating short-term decisions. If this seems all rather Soviet to you, fine, but this alone will help mitigate the short-termism that drives clubs to spend big on a chance at glory, only to fall more deeply into the red. It would also provide greater justification for the not-always-popular FFP rules.
Interesting reads this week
Some stuff I read and wanted to tweet about but can’t because I’m not on Twitter anymore:
This is a very inside baseball and very interesting take from Bryan Curtis on the embargo rules and problems with team access that persist in British football. Some have pointed out this isn’t merely about match reports; the chill effect has arguably led to fewer breaking news stories and exposes on the country’s biggest clubs, which can’t be good for anyone.
A cracking story from the New Yorker on the man behind the Football Leaks dumps.
This is a good NYT column on Ian Graham and Liverpool, although as a few friends have pointed out, it doesn’t seem on the surface like their data department is doing anything particularly revolutionary.