Under pressure over Partygate, the Government sometimes gives the impression that it is flailing around for things to announce. This week’s gesture in the direction of bringing down childcare costs is one example. Are plans for football regulation another?
The immediate peg on which ministers are hanging the case for the move seems to be Roman Abramovich’s expulsion from ownership of Chelsea: this Financial Times report leads with the fact that the regulator will have “sweeping powers to block “unscrupulous” owners from buying clubs”.
The key thrust is forcing the Premier League clubs to share more of the wealth with teams further down the table, and an emphasis on clubs as important community institutions rather than merely private companies such as any other.
But how much of a problem is that, really? As the Institute of Economic Affairs have pointed out, both in an article here and a full report, football clubs are already quite hardy beasts: “This industry is almost unique in that most businesses in operation a hundred years ago are still around today.”
The collapse of the European Super League under Government pressure also suggests ministers already wield quite a lot of power over the game.
However, it seems perfectly reasonable, in principle, for ministers to decide that they want to try and guide English football towards a different economic (and social?) model.
The current top-heavy emphasis on the Premier League has its advantages, in terms of producing some world-class football, but it’s not unreasonable to prefer a system where smaller teams get more of the pie. It isn’t difficult to see how parachute payments could entrench institutional advantage and distort the playing field.
And even if clubs do operate as private businesses, it’s hard to object to regulations which would prevent a repeat of something like Wimbledon FC quitting their borough to become MK Dons.
But even those minded to take that view should be very vigilant about what the Government is doing here. The IEA report, Red Card, sets out plenty of ways that regulation could backfire on the very clubs it is supposed to support.
Nor are such concerns confined to committed free-marketeers; the Financial Times report above-quoted notes that “officials stressed the scale and complexity of the reforms and risk to clubs if the framework is not calibrated properly.” And a Government scrambling for popular announcements under pressure – and in the shadow of a looming election – is more likely to make mistakes.
Even without that, we should always be very careful about giving any organisation, let alone a private, profit-making one, that it is too important to fail. That might have the counter-productive effect of encouraging reckless behaviour – and thus requiring an ever more active regulator.
Yesterday’s Red, White, and Blue column also led on two examples of how the SNP have got themselves into serious trouble propping up ‘important community institutions’ which were, in truth, failing businesses. Ministers should be wary of creating the conditions for similar scandals down here.