INTEGRITY IN SPORT
Playing below the bottom line
When Christina Philippou cast her forensic accounting gaze over the annual reports of England ’ s football clubs , she made discoveries that she could scarcely believe .
Over the past three decades , 40 per cent of clubs in the top four leagues , including the Premier League , have gone into administration at some stage . “ That ’ s two in five clubs ,” she says . “ In no other industry would you see such figures .”
This was just one indicator of the precarious financial position facing many clubs that her research with the University of Liverpool ’ s Kieran Maguire uncovered . Their report was released alongside the British Government ’ s response to the 2021 Fan-Led Review of Football Governance and will now inform policy to secure the future of the national game .
Their research found clubs were too reliant on owner funding , forcing them to chase short-term success at the expense of sound financial management .
Alarmingly , 17 of 20 Premier League clubs were ‘ at risk ’ against at least one of five metrics used to measure financial security , including wage control and dependence on owner funding . In the Championship ( Division 2 ), in the most extreme cases , player payments were double what the club actually earned . “ Clearly , that is not sustainable ,” says Philippou .
Tackling the ‘ boys ’ club ’
In other research , Philippou found in England ’ s top four football leagues , two-thirds of clubs had all-male boards – a representation of women well below corporations operating today at a similar scale .
“ We didn ’ t go in expecting to find that it was all rosy ,” she says of the research conducted with Fair Game – a collective of football clubs advocating for better governance . “ But some of the figures shocked even us .”
Gender diversity in the boardroom has been shown in most companies around the world to improve financial performance . So , for Philippou , it ’ s no coincidence that the lack of diversity in football club management coincides with their perilous financial state .
It ’ s an imbalance she wants to help redress through her evidence-backed research findings and her role as Policy Director at Fair Game .
Diversity , she says , is one of Fair Game ’ s good governance pillars . With better governance comes improved financial security , and with financial security comes longevity .
She also notes that many clubs are still run like small businesses and just don ’ t have the governance and accountability processes to support the multinational entities they have become .
But she is buoyed by the fan-led review that took evidence from Fair Game and which has led to the UK Government preparing a white paper to install a football regulator .
As policy director of Fair Game , Philippou provides an evidence-based platform . “ That ’ s the key . That ’ s why we ’ ve achieved traction ,” she says . criminal acts such as bribery , match fixing and money laundering .
In athletics , similar safeguards are being developed and implemented . Independent disciplinary and investigative arms are being established outside of governing bodies . The International Olympic Committee and Interpol , and UEFA and Europol , have teamed up to stamp out match fixing .
“ A lot of the bigger governing bodies are actually working with law enforcement and embracing some of the governance changes that are needed .”
Philippou ’ s research has been contributing to this , with her report being used by several governing bodies to help guide anti-corruption measures .
Coming from a corporate background , she undertakes her research with the view that it has to have an impact on the ground . In the longer term , she hopes her report will be used widely as a template for sporting governance . And while football is big business , it ’ s still a sport . It starts with children kicking a ball around the park . For the game ’ s guardians , that is the magic to cherish and protect .
ISSUE 04 / 2022 59