How good governance led Luton Town to the Premier League

Introduction

On Saturday 27th May 2023 Luton Town Football Club defeated Coventry City 6-5 on penalties to win the Sky Bet Championship play-off final to reach the promised land of the Premier League.

But just how did a club on the brink of liquidation in 2008 and operating on a limited budget manage to turn their fortunes around and win the fixture frequently dubbed the “richest game in football”?

Governance in Football

Football is a world regularly hit by scandal and controversy, the root cause of which often stems from failures in governance with poor leadership, inadequate financial controls and excessive risk taking being just a few factors behind this. The Government acknowledged that changes were needed in its white paper published on 23 February 2023 entitled “A sustainable future – reforming club football governance” which it describes as “the most radical overhaul of football governance since the rules were first invented over a century ago”.

These failures in governance have led to many clubs receiving large fines and points deductions which have resulted in the collapse of some and put others at serious risk of financial failure and relegation, a recent example of this is Reading’s 6-point deduction which resulted in them being relegated from the Championship into League One. The most extreme example of this was the unprecedented deduction of 30 points from Luton Town at the start of the 2008/2009 season. Starting the League Two season with such a sizeable deduction seemed like an insurmountable task and despite the heroic efforts of the team on the pitch it proved to be just that and Luton were relegated out of the football league, although winning the Football League Trophy at Wembley that same season gave a small glimmer of hope that, despite the Football Association’s best efforts, Luton were not dead and buried just yet and this club would rise again.

The years that immediately followed may have been challenging for the team on the pitch and its fans but behind the scenes Luton Town Football Club 2020 Ltd (the owners of Luton Town Football Club – “2020”) were building the foundations of a strong and sustainable football club determined not to repeat the mistakes of the past.

The key to achieving long term sustainable success include strong leadership, good decision making, prudent financial controls, effective risk management, creating a positive culture and proactive engagement with stakeholders and the community. These are all factors embodied and instilled by the 2020 Board, with a specific focus on creating financial stability and having a positive impact on the local community, and less than ten years after their return to the Football League the club, its fans and the town are reaping the ultimate reward and making history by being the first club to achieve promotion from non-league to the Premier League.

One of the key factors to 2020’s success has been its strong engagement with the club’s fan base and local community. Football clubs are at the heart of the community and it’s the fans who usually suffer the most when things go wrong. Whilst players and managers leave and club owners can sell, the fans are there through thick and thin and are arguably a clubs most valuable stakeholder as there really is no club without its fans. A positive relationship between Luton and its fans sees them achieve strong attendance figures week in week out and they easily sold out their c.37k ticket allocation for the Championship play-off final at Wembley. The club’s commitment to another of its key stakeholder groups, its employees, was evidenced in 2014 when Luton became the first English professional football club to become a fully accredited Living Wage employer, paying the ‘Real Living Wage’.

Another significant factor in the club’s success has been its focus on adopting prudent and effective financial controls, an area where a substantial number of football clubs fail. 2020 understands that financial viability is at the heart of maintaining a successful football club and this can be seen in Luton’s rise through the leagues, continuously improving their league position year on year whilst keeping a tight control on its budget. The commitment to ensuring the financial stability of the club was recognised when Gary Sweet, CEO, won the Championship Chief Executive of the Year award in May 2023 with the judges commenting that “He has overseen the recovery of his club from the Football Conference to the top of the Championship without risking its long-term future by overspending.”

Conclusion

It’s easy to think that a football clubs success stems almost entirely from their performance on the pitch, and whilst its undeniable that the performance of Luton Town over the past 10 years has been sensational, that performance could not be achieved without a strong foundation of good governance providing effective leadership, controlling costs and setting a positive ‘tone from the top’ which are all pivotal factors in ensuring the club remains viable over the longer term.

Luton Town should be seen as a positive example to clubs of all sizes that adopting a sound governance structure and acting in an ethical and responsible way are the building blocks required to helping achieve long-term sustainable success on the pitch.

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