Why the football regulator shouldn’t ignore clubs below National League
The case of Ebbsfleet United shows why the incoming football regulator’s powers are needed throughout the English game, says Damian Collins.
The deeply entwined relationship between English football clubs and the communities they serve is never more evident than at the midpoint of the season and the turn of the year.
Whilst most Europeans enjoy a midwinter break, in England we witnessed the heart-warming scenes of generations of the same family making their way through the turnstiles to cheer on their team as they enjoy the thrill of the third round of the FA Cup, where this year Premier League Liverpool hosted Accrington Stanley from League Two.
For one day only, both clubs started on a level playing field, and each team of players had to prove their worth.
Yet whilst such scenes have been instantly recognisable to English football throughout the decades, the game is at an important moment of change.
In Westminster, legislation is being debated that will create a new Independent Football Regulator, with the power to oversee the financial operation of clubs playing in the top five divisions of English football, from the Premier League to the Vanarama National League.
However, whilst there are many demands being placed on the new regulator, the legislation will not pass through its final stages in the House of Commons until the end of this current football season.
Case of Ebbsfleet United is cause for concern
For fans of Ebbsfleet United Football Club, the 2024-25 season marks a race against time that they may be destined to lose.
Rooted to the bottom of the National League, the fifth tier of English football, relegation looks likely, and the dreams of becoming Kent’s second English Football League club could remain unfulfilled.
Ebbsfleet United has also been rocked by unstable leadership within its boardroom and rising debts. The benefits that the new football regulator could bring may also miss Ebbsfleet United if they are relegated, as they would then be playing at a level below the scope of its powers.
Yet it was exactly clubs like Ebbsfleet that we had in mind when the previous House of Commons debated the proposed powers of the new football regulator.
In 2013, Ebbsfleet United was acquired by a Kuwaiti businessman, Dr Abdulla Al Humaidi, through his family business KEH Sports.
Al Humaidi was also the businessman behind the proposed London Resort project to construct a £2.5bn leisure and entertainment complex on the Swanscombe Peninsula in north Kent.
The failure of that business, also known as ‘Dartford Disneyland’, led to Al Humaidi being declared bankrupt in the High Court in 2023, and left a trail of dissatisfied investors, both in Kuwait and the UK. Multiple allegations of fraud and legal action have been levelled against him, as well as impending prison sentences awaiting him should he return to Kuwait.
One Kuwaiti Court even asserted that Al Humaidi “always deludes his clients into investing in fictitious projects with the aim of stealing their money”, while in the UK a judge last month ruled that Al Humaidi acted in breach of his bankruptcy by continuing to “play a very active role in the [London Resort] company” and provided “utterly implausible” explanations to court.
Following the failure of the ‘Dartford Disneyland’ and his personal bankruptcy, Al Humaidi stood down as chairman and as a director of Ebbsfleet United in December 2023.
A statement from the club at the time nevertheless made clear that “this does not change his family’s ownership model or intentions for Ebbsfleet United now or in the long-term…two new directors from the Al-Humaidi family (Abdullah and Abdulrahman) were added to the club board and Dr Abdulla will be passing the reins of chairman across to his cousin Abdullah Al-Humaidi.”
The club remains under the ownership of KEH Sport. Whilst Al Humaidi has no direct role, there may be concerns about what influence he still exerts and whether, once he is discharged as a bankrupt, he may seek to regain direct control.
Football regulator should warn all owners
As for the club itself, it continues to fall deeper into debt. In 2022, according to the analysis of the Ebbsfleet United accounts by the football finance expert Kieran Maguire, the club was spending £314 in wages for every £100 of income it received. Ebbsfleet United accounts for 2022-23 showed a loss of £1.9m, up from £1.79m the previous year.
When football clubs fail, it’s the community that loses out, and the local fans who are left to pick up the pieces. In recent years we have seen financial failure expel clubs like Bury and Macclesfield from the football league, and the administration and near collapse of Bolton Wanderers and Derby County.
When this happens, the cry from fans is the same: why didn’t the football authorities intervene earlier before things got so bad?
This is a fair charge. In many cases of financial failure, if the authorities had enforced their own rules correctly to ensure that clubs don’t overspend, their collapse could have been prevented. This is the role that the football regulator will take on when the legislation currently before parliament is made law.
The law will include the powers to insist on rigorous financial checks on clubs, and background and integrity checks on their owners. People with convictions for fraud, and former recent bankrupts, should not be entrusted with important community assets like football clubs – including through proxies.
Even though the regulator’s powers will not extend below the National League, they should make clear to clubs seeking promotion into that division that if their owners do not meet the required integrity standards, then they will have to go.
Damian Collins OBE was Member of Parliament for Folkestone and Hythe from 2010 to 2024. He is a former Chair of the House of Commons Digital, Culture, Media and Sport select committee.