Think Fan Engagement welcomes the maiden Sustainability Index published by Fair Game, an organisation committed to the betterment of football. Kevin Rye from Think Fan Engagement is an adviser to the campaign.
The Index is an important method of monitoring clubs performance and creating a fairer financial flow throughout the pyramid.
Fan engagement is a key aspect of the Sustainability Index, with the majority their weighted measurement calculated using Fan Engagement Index scores. The Fan Engagement Index for the 2021/22 season will be released in late February. Clubs have been sent data sets should they wish to comment or add new information.
See below for the Fair Game release.
Liverpool tops the chart of Fair Game’s inaugural Sustainability Index
LIVERPOOL were today crowned Premier League Champions in the first-of-its-kind in-depth ranking of a club’s sustainability. The Sustainability Index, developed by Fair Game, rates each club for financial sustainability, good governance, equality standards and fan engagement.
Fair Game partnered with world-renowned independent experts and organisations in football to create fair and impartial metrics across the four criteria.
Niall Couper, CEO of Fair Game, said: “For the first time we have a measure that shows which clubs are well run. But equally we’ve shown the challenges clubs face to become sustainable – vital in ensuing the history and traditions of football clubs, so cherished by supporters, are secure for the long term.”
Of the 20 Premier League teams, Liverpool led the way in governance, scoring highly in the Football Leadership Diversity Code, which makes up 50% of the governance score.
Finishing bottom of the table were Nottingham Forest. Forest’s rating was hamstrung by their financial rating of 1.0 out of a maximum score of 40. Significantly behind the second least financially solvent, Bournemouth, with 9.4.
Figures showed Forest spent 202% of their revenue on players’ wages, nearly triple the recommended amount of 70%. Their financial liabilities were over twice their assets, and their income revenue was less than half what they owe in loans due in the next 12 months. This is supported by previous Fair Game research that showed over half of the clubs in the football pyramid are technically insolvent.
Couper added: “Football is in crisis. The debacle of the European Super League demonstrated the chasm of feeling between clubs and supporters. The pandemic and cost-of-living crises have stretched finances to the limit. Discrimination remains rife. And it’s questionable whether the ‘Owners and Directors Test’ is fit, or proper.
“Football needs a culture change. It needs to start celebrating and rewarding good behaviour, and we believe the Sustainability Index does that.”
The publication of the Index comes just weeks before the long-awaited White Paper on Football Governance is published by the Government and builds on the Fan-Led Review, chaired by Conservative MP Tracey Crouch, which published its findings at the end of 2021 – findings that were largely welcomed by Fair Game.
Problem of parachute payments
The figures also support the call for the abolition of parachute payments. The Championship Index shows a clear divide. Those at the top are all boosted by the short-term benefit of parachute payments, while those at the bottom are almost entirely clubs that have massively over-stretched themselves in pursuit of the Siren Call of the Premier League. Tellingly, Wigan who came second bottom in the Championship Index, have recently been docked points for late payment of wages.
Couper said: “Outside the Premier League clubs’ finances are a mess. The Championship has become a casino and at stake is the history and traditions of our great clubs.
“The argument for an independent regulator of football is over. This is more evidence for the need for change. The new regulator needs to take control of football’s financial flow and end the insanity that exists in our National Game.
“In the Championship the true winners are the likes of Luton Town, Millwall and Bristol City – clubs that are building for the future and are refusing to put themselves at risk.”
The financial criteria is built on standard accounting measures – credit ratio, debt ratio, loans and wages – which analyse every club’s credit, debt, loans, revenues and wages.
The fan engagement metric uses data from the respected Fan Engagement Index and how full a club’s stadium is on an average matchday.
The Equality Standards measure analyses board make-up and couple that with data from the Football Leadership Diversity Code, which looks at recruitment at football clubs.
Fair Game believes in constant improvement and will work to improve the index over the months and weeks ahead, including calling for real-time reporting to ensure potential issues are raised before they become critical.
Couper added: “It isn’t just about finances. The Premier League, rightly, doesn’t want to give away more money to gambling clubs that are poorly run. We believe football lower down the pyramid needs more money, but it should be given to clubs that are well run – ones that look towards long-term sustainable revenue streams.
“What the Index provides is the mechanism to distribute more money to clubs that are run well. Football needs to start incentivising good behaviour.”
As well as the inaugural Sustainability Index, look out for the all new 2021/22 Fan Engagement Index which will be released in late February.