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Monday, November 29, 2021

Premier League clubs facing 10 per cent ‘stamp duty’ on transfers to aid grass roots

Premier League clubs are facing a suggested 10 per cent transfer levy that would raise hundreds of millions for the football pyramid, as part of the most radical governance overhaul in a generation.

The Government’s fan-led review, chaired by former sports minister Tracey Crouch, has delivered 47 recommendations, which include English football’s first independent regulator, a club licensing scheme and measures to stop clubs joining breakaway leagues.

There is also a proposed new ownership test that would include an “integrity” check to assess the “good character” of a prospective custodian and three-yearly repeat tests. While Crouch stressed that she could not judge the controversial recent Newcastle United takeover, she told The Telegraph that her proposal puts “a lot more focus on some of the particular issues around, for example, character and the existing ODT [Owners’ and Directors’ Test] doesn’t do that”.

The review was established following a series of crises, starting with the collapse of Bury in 2019 and culminating with football’s fractured response to the pandemic and the disastrous attempt to form a European Super League.

The Government will make a statement to Parliament on Thursday and is ready to accept Crouch’s key recommendation of an independent regulator which, with legislation in the next Queen’s Speech, could be operational in time for the 2023-24
season.

One eye-catching proposal is the idea of a “solidarity levy” to support the game’s wider pyramid, including grass roots, which would be paid like a stamp duty by Premier League clubs on the purchase of players from overseas or other Premier League clubs. The 162-page report notes the huge fees that are paid out to agents and projects that a 10 per cent solidarity payment would have generated £160 million each season over the past five years.

The report describes the idea as potentially “game-changing to the rest of the football pyramid”, with revenues annually estimated to cover 80 new adult 3G pitches, 100 adult grass-roots pitches, 100 children’s pitches, 30 brand new two-team changing rooms and also enough money to ensure that all League One and League Two clubs can break even.

Other recommendations include:

  • A “golden share” to give fan representatives the ultimate say on “heritage” issues such as joining a rebel league, selling the stadium, moving location or changing the club badge or home kit.
  • Upfront spending checks, real-time monitoring of owner investments and incremental limits on spending.
  • Reform of parachute payments as part of a wider redistribution of finances.
  • A pilot scheme to consider selling alcohol during lower-league matches.
  • Clauses on player contracts to adjust by a fixed percentage for promotion and relegation.
  • Parity for women’s football, a review to consider its challenges and mandatory equality, diversity and inclusion plans.
  • A new player-welfare system to protect those who leave the game.

The Premier League acknowledged a need to “restore and retain” fans’ trust in football governance, but stressed that reforms should not damage the competitive balance or restrict current investment.

Despite the prospect of fresh funds for grass-roots football, the Football Association was similarly guarded. A spokesperson said that it would “continue to liaise with the Government on potential solutions to the topics and recommendations”.

The English Football League welcomed “a fundamental financial reset”. Crouch, whose panel included former England manager Roy Hodgson, stressed that the recommendations could not be treated like a menu and represented an interconnected package of overdue reform.

“Past and present sports ministers have often said football is in the last-chance saloon when it comes to reform– that saloon should be closed,” she said. “Now is the time for an independent regulator to take on the reform that fans have been crying out for but which the authorities have failed to deliver. There is a stark choice facing football.

“It is both true that our game is genuinely world leading and that there is also a real risk of widespread failures and a potential collapse of the pyramid as we know it. We ignore the warning signs at our peril.”

Crouch said that the evidence was of many clubs being run “recklessly” in gambling for success and an administrative set-up that was inherently conflicted. “Clubs are incentivised to prioritise their own interests rather than taking a long-term view of what is best for the game,” said the report.

It was stressed that an independent regulator would operate along similar lines to the Financial Conduct Authority and would not be involved with commercial or sporting issues. The new club licensing system would apply from the Premier League down to the National League.

Kevin Miles, the chief executive of the Football Supporters’ Association, hailed the report as a “potentially huge step forward” and called on the Government to deliver its recommendations.

Julian Knight, chair of the digital, culture, media and sport select committee, said that the reforms were “common sense… and probably kills off forever the idea of the rich, elite clubs breaking away”. He added: “The dinosaurs have had their time. It’s time that football, our national game, was brought up to the same standards we’d expect in other parts of sport and business.”

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