NCAA Football

Football Sustainability Index: How well is your club run?

The coming days and weeks will bring the moment when English football is forced to embrace change. The Government’s White Paper is expected shortly, crystallising the key recommendations suggested by the exhaustive fan-led review of the national sport’s governance.

Those in power have now concluded that football cannot continue as it was. Too many clubs have been allowed to unravel. Some irrevocably. Increased regulation, despite Premier League lobbying, will finally be introduced in 2023.

To what extent remains unclear after 12 months of slow progress, but an independent regulator will be at the heart of football’s reformation. Among the priorities, they will be tasked with ensuring “financial sustainability of the professional game”.

An almighty, nuanced challenge, but help – or at least a suggestion – is at hand.

Fair Game, a group campaigning for improved football governance, has today published its first Sustainability Index, a project 18 months in the making which has called on the expertise of academics, accountants and analysts.

The sustainability index, Fair Game claims, is the solution to football’s problems. A rating system that assesses each club on financial sustainability, management, fan engagement and equality standards. The higher your score, the bigger your reward.

Fair Game, a movement endorsed by 33 clubs, does not expect its radical proposals to be adopted any time soon by an industry reluctant to look at itself in the mirror, but the Sustainability Index is an attempt – perhaps an ideological one – on a club’s successes must be measured differently.

“Football needs a culture change,” says Niall Couper, chief executive of Fair Game. “It needs to start celebrating and rewarding good behaviour, and we believe the Sustainability Index does that.”

So who are the first winners? Liverpool.

For all the criticism of Fenway Sports Group, the American owners open to the prospect of selling up this year, no one was deemed to have scored higher on the first sustainability index. Nottingham Forest, meanwhile, were placed bottom of the pile after investing heavily to secure their long-awaited Premier League return.

Nottingham Forest’s transfer spending is bad news for their sustainability ranking (Photo: Clive Mason/Getty Images)

In case you were wondering how it’s all calculated, here’s the geeky bit…

The sustainability index was divided into four sections judged to be valued in the government’s fan-led review published in November 2021: financial sustainability, good governance, fan engagement and equality standards.

Each of these was weighted to present an overall score for each Premier League and Championship club, with financial sustainability carrying the greatest value of the four.

This particular sub-section was calculated by measuring current assets, debts, liabilities, loans to be repaid within one year and salaries as a percentage of turnover. All information was taken from official accounts published via Companies House to create a snapshot of each club’s financial health.

Reconcile that with scores awarded for good governance, fan engagement and gender equality standards, and you’ll find each club’s ultimate Sustainability Index score.

This is where Liverpool came out on top. Their financial sustainability might have been bettered by Arsenal and Manchester City, but Liverpool’s management score, another complex assessment covering the club’s organizational structure, sponsorships and corporate social responsibility, was considered the highest in the top division.

The theory goes that the better a club’s management and fan engagement, the higher the standards of transparency and dialogue. Those perceived as well-run clubs, such as Brighton & Hove Albion and Brentford, also both produced high results.

The dubious honor of finishing bottom went to Forest, whose latest set of accounts, including the 2020-21 season, showed that £202 was spent on wages for every £100 of income. Financial liabilities were also double their assets. Bournemouth were significantly better off, but again cut short of most other Premier League clubs.

“For the first time we have a measure of which clubs have the best chance of still being here for another century,” says Couper. “But equally we have shown the challenges clubs face to become sustainable to ensure fans don’t lose out.”

For most, the Premier League riches provide a solid financial sustainability rating, and this is again evident in the Championship. Clubs with the highest scores typically still receive parachute payments when they lodge their latest set of accounts, including Sheffield United, Burnley, Watford and Huddersfield Town. Norwich City, who also scored highly for management and fan engagement, led the way as a club trying to live carefully within its means.

Luton Town, who reached the Championship play-offs against the odds last year, were outstanding and showed financial sustainability on a limited budget, but at the opposite end of the table were clubs who have played in the hunt for Premier League promotion and routinely come up short. Map.

Blackburn Rovers and Middlesbrough both returned a zero rating for financial sustainability, with Queens Park Rangers, Coventry City and Stoke City only marginally better. Fair Game has called them a collection of clubs who have chased the Premier League’s siren call.

“Outside the Premier League the finances of the clubs are a mess,” Couper added. “The championship has become a casino, and the history and traditions of our great clubs are at stake.

“The argument for an independent regulator of football is over. This is more evidence of the need for change. The new regulator needs to take control of the financial flow of football and end the madness that exists in our national game.

“In the Championship, the true winners are the likes of Luton Town, Millwall and Bristol City – clubs that build for the future and refuse to put themselves at risk.”

The results are not perfect. Stoke and Middlesbrough can both call on local, wealthy owners to subsidize losses, while Sheffield United’s current transfer embargo for late payment of transfer fees hardly paints Bramall Lane as a scene of stability. Of course, promotion back to the Premier League would soon see those fortunes turn around.

Everton and Southampton supporters will also take some comfort from their lofty placings as they live in fear of a drop in the Championship. Everton in particular are hardly considered a club that others aspire to be, yet are only second to Liverpool in the Premier League rankings.

The theory is that any club that scores above 20 in the financial sustainability category is on solid footing, but in the absence of real-time reporting, these metrics rely on accounting figures up to the end of 2021. A new football regulator would likely have these figures at hand, promising increased regulation of the game.

That fan engagement and governance is placed so prominently alongside financial health is yet another measure of where football is headed. Two rival fan groups, the Manchester United Supporters Trust (MUST) and Liverpool’s Spirit of Shankly (SOS) joined forces yesterday to call for the Government’s White Paper to strengthen the rules around club ownership.

The two clubs, English football’s most successful, are both for sale and supporters are keen to see an improved owner and director test along with greater fan involvement.

“Just as the government would not allow our most important cultural or heritage assets to fall into unfit or inappropriate hands, neither should it allow our football clubs to do so,” said a joint statement by MUST and SOS.

Football is waking up to its problems, and how the government presents the long-awaited solution will shape the debate on financial sustainability from this point forward.

(Top photo: Jack Thomas – WWFC/Wolves via Getty Images)

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