The Premier League dominates football headlines. But across the country, lower division clubs play a key role in their local communities as well as developing talent. While chasing the higher-level leagues can be costly, some clubs are establishing enterprising initiatives, including in education.
On 1 June 2025, over 52,000 people went to Wembley stadium to watch Oldham Athletic versus Southend United in the play-off final of English football’s fifth division. This was a record crowd for such a match in the highest non-league (hence historically, non-professional) men’s competition. The match would determine which team would be joining Barnet, the National League champions, as one of two clubs being promoted into the Football League.
Of the many oddities of this event, it was both clubs’ first competitive men’s football match in the month of June since the very limited competitions that took place during the Second World War. It was also nearly a whole calendar month after the end of the regular season, leaving the players of both teams facing a much shorter rest period at the culmination of a season that began the previous July.
The outcome of the event was described by former Sky Sports Soccer Saturday anchor Jeff Stelling (a well-known fan of fellow fifth-division team Hartlepool United) as ‘a typical National League contest: an own goal, a penalty, a goalkeeping mistake, a worldie and a fluke goal’. At the end of extra time, Oldham had edged Southend 3-2 and earned promotion back into the Football League.
At a time when the intensity of the football calendar is being debated for elite players – with internationals being played in June and the Club World Cup running into mid-July – the issue of over-worked and potentially burnt-out footballers is not only restricted to those at the very top.
Football continues to change and adapt to a rapidly evolving global marketplace. But is there a risk of some parts of football getting left behind?
The stories of the two clubs that took part in the 2025 National League play-off final are similar. Both have had more glorious pasts: Oldham played in the League Cup final in 1990, two FA Cup semi-finals in 1990 and 1994, and were founder members of the Premier League in 1992. Southend played in the Championship in 2006-07, knocking Manchester United out of the League Cup that season, and spent much of the past quarter of a century in the third tier of English football.
In recent years, both clubs have fallen on harder times, with ownership difficulties that led to near collapse, and relegation out of the Football League into the non-league game.
It is this scenario into which the imminent independent football regulator (IFR) steps. So it is perhaps encouraging that the shadow football regulator, the body that is setting up the IFR, chose to visit Oldham on the eve of the play-off final on a fact-finding mission.
Why should government have a role in sport?
The IFR’s powers are set out in the Football Governance Bill as ‘Statutory, strengthened owners’ and directors’ tests to make sure a club’s custodians are suitable and protect fans from irresponsible owners.’
Economist Walter Neale in 1965 first used the phrase ‘the peculiar economics of professional sports’. Why should the government care about what are essentially small enterprises in local areas all around the country? The answer is that they are ‘peculiar’: they must abide by competitive forces that are different from those facing any other small firm in another sector of the economy.
To attract spectators to pay to watch, there must be another small firm also producing on the same site – the football stadium. That other small firm must be able to produce to a similar standard in order for it to be interesting to watch the interaction – a spectacle.
Externalities (consequences for third parties) therefore exist that Neale argued are internalised at the sports league level. But the question still remains: why is the running of football clubs a matter for the government?
The poor running of some such small enterprises arguably would not matter in other sectors. If they went out of business, a small number of jobs would be lost and there would be some supply chain disruption. Economics tells us that this is ‘creative destruction’ and a desirable outcome – better firms set up in the wake of past failures.
But football clubs have become firmly embedded over multiple generations in the fabric of local areas. That more than 50,000 people chose to watch two such small enterprises produce their output in the National League play-off final exemplifies this.
These many thousands of supporters have a common identity, shared experiences and a vast memory bank over which to reminisce. What’s more, since these sports clubs have academies, they produce future employees for the industry as a whole.
What are the pay-offs from play-offs?
Much is made of the Championship’s play-off final, and how it determines the fate of the £200 million prize money – an indication of the vast wealth in English football. Wealth that is overwhelmingly located in the Premier League.
The National League’s equivalent, it is estimated, could be worth up to £2.5 million for the winners – a tidy sum no doubt, but only just over 1% of what was at stake for this year’s Championship play-off finalists (Sheffield United and Sunderland) in May.
On the evening before the National League play-off final, Paris Saint-Germain (PSG) – owned by Qatari Sports Investments – won the UEFA Champions League, handsomely beating Inter Milan 5-0 and having disposed of Premier League opposition along the way in Manchester City, Liverpool, Aston Villa and Arsenal. PSG earned £21.3 million through winning the Champions League – a significant sum but a tenth of what the Championship play-off winners gain.
The vast amounts of wealth associated with the Premier League may give a sense that that is what football is all about. It is where the big stars are and the sports media’s main focus of attention.
But in reality, it might be argued, football is much more about what happens on a local park each weekend throughout much of the year – children and adults turning up and kicking balls around, talking, networking, developing softer and harder skills. Teams at that level can organise, compete in leagues and, in principle, in England’s fabled pyramid system, reach the pinnacle – those five nationwide football divisions through promotions (and maybe relegations).
Football is, thus, community – romance, even. As such, it is social good and has a positive wider impact (or externality). This means that the market will, economic theory says, under-provide it. Despite that, the rich pyramid in English football exists, and appears to thrive despite the obvious concerns about it.
But that provision means a willingness to underpin financial losses. Oldham and Southend stumbled inevitably towards their non-league status over a long period of time in which there was a strong reluctance of anyone to underpin those shortfalls.
Their renaissance is undoubtedly a good news story – but it has relied, so far, on enterprising behaviour by new owners, and a willingness to undertake non-trivial debts. Both clubs published accounts in recent months setting out losses of well over a million pounds each. Similarly, Wrexham’s Hollywood promotion from the National League took place while the club lost over £7 million.
Football losses can be attributed to at least two things. First, the ‘win maximisation’ objective that sports economists argue club owners pursue, rather than the standard economics textbook goal of profit maximisation. This means that throughout football’s entire history, there has been controversy over how much players are paid and worries about the financial sustainability of the game.
The second contributing factor is that billion pound division, the Premier League. Because it brings in so much money, it then pays its players huge amounts too. And this then filters down the divisions as teams in the Championship chase the Premier League dream, teams in League One chase the Championship dream and so on. As a result, the losses made have grown exponentially.
This is not necessarily a bad thing. If wealthy individuals, or groups of individuals, wish to use that money to invest in clubs around the country, this is surely a good thing. Football clubs don’t exist in some kind of economic isolation.
While much of the financial input into football clubs does go on players’ salaries, those that are climbing the standings do tend to recruit more staff and pay them better. As such, football could act as a source of regional policy, channelling much needed money into what are often very deprived parts of the country.
How do football clubs engage with their local communities?
Under their new ownership, Southend United have played a bigger role in their local community, presenting the club in a more transparent light and engaging with fans and fan groups. Their approach is perhaps best exemplified in the recent explainer that the club published alongside their annual accounts to help fans to understand where club money is being spent.
In Oldham’s case, a part of the enterprising approach is embracing the town as a whole, with all of its sporting possibilities. In March of this year, Sportstown was launched, and the eagle eyed at Wembley would have seen its logo shining around the advertising hoardings. Sportstown is a multi-sport academy system to be based out of Boundary Park – featuring as mainstay sports football, cricket, netball and rugby league.
A football club’s stadium sits essentially vacant most of the week, all year long. Football matches are on Saturdays, sometimes Tuesdays, but rarely more than once a week. If a football stadium, on the other hand, is an education centre – further education and higher education, as is planned at Oldham from September – then it generates revenue, and is a social hub all week long, all year long. And it can become a beacon of hope for a town like Oldham that until now has not had sporting academic pathways or any significant higher education presence.
Simply having a more successful football club may help local fortunes – there is some evidence pointing in that direction. But having a multi-sport academy with upwards of 1,000 young people on site throughout the academic year seems like a better bet than those animal spirits of fleeting football success.
The IFR’s scope to introduce stronger measures to discourage ‘irresponsible owners’ is therefore laudable and necessary given football’s unique community status. It is also not without its risks. Footing multi-million pound losses chasing a dream of promotion could easily be classified as irresponsible. Indeed, there are many past tales of ownership tenures turning sour following an attempt to gain promotion that failed.
The IFR needs to tread carefully to balance encouraging investments in deprived areas around the country while ensuring that those investments are responsible. It is not impossible that too heavy-handed an approach to checking how ‘responsible’ prospective owners are may put off some potentially very good owners. Too light an approach may well lead to too many bad owners still getting through, threatening the credibility of the IFR.
Where can I find out more?
- Oldham Sportstown launch: Video and press release from Oldham Athletic.
- Norwich City FC’s socio-economic impact report: Report on work to understand the club’s impact on Norfolk and the wider community ‘beyond traditional financial statements’.
- Fact sheet: Football Governance Bill: Details of the establishment of the independent football regulator.
- Management mathematics in sport – moneyball and soccer: Article by James Reade and Darren Royle in the IMA Journal of Management Mathematics.
Who are experts on this question?
- James Reade
- Stefan Szymanski
- Peter Dawson
- Steve Brand
Author: James Reade
