Football Governance Bill
Today’s King’s Speech confirms an independent football regulator is on its way. It means:
No to EuropeanSuperLeague
Powers to intervene in badly run clubs
Stronger tests on owners
Increased fan voice
Protection for badges, stadiums etc
THE SPEECH IN FULL:
“Legislation will be brought forward to safeguard the future of football clubs for the
benefit of communities and fans.”
● An Independent Football Regulator will put fans back at the heart of football and
help to deliver a sustainable future for all clubs. It follows on from the 2019
manifesto commitment to conduct a fan-led review of football, which highlighted a
number of systemic issues in football that this legislation addresses.
● The Regulator will address systemic financial issues in football while providing the
certainty and sustainability required to drive future investment and growth, so that
the Premier League and the English Football League remain a global success
story. It will also provide greater protections for club heritage, address the issue of
breakaway competitions, and most importantly ensure that fans have a greater
voice in their own clubs.
● The Regulator will not change the fundamentals of the game – it will ensure a more
sustainable future, with fans at its heart, for generations to come.
What does the Bill do?
● The fragility of the English footballing pyramid has been exposed in recent years.
The collapse of Bury FC, the devastating impact of the pandemic on clubs, and the
botched plan for a breakaway European Super League have all revealed the
financial unsustainability of some clubs and the need for more accountability for
fans.
● In 2019, we committed to a fan-led review of football, which recommended the
establishment of an Independent Football Regulator. This legislation will
strengthen the governance and financial resilience of football clubs to protect the
national game and clubs’ link with communities and fans, by:
● Establishing a new independent regulator for English football clubs to
address issues of financial sustainability and ensure fans’ voices are
listened to. The Regulator will operate a licensing system, where all clubs in the
top five tiers of the men’s English football pyramid will need a licence to operate as
professional football clubs. The Regulator will have powers to monitor and enforce
compliance with requirements in financial regulation; corporate governance; club
ownership (Owners’ and Directors’ tests); fan engagement and club heritage
protection; and approved competitions. This approach to regulation will be
proportionate to a club’s circumstances based on criteria like league, club size, and
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financial health. The Regulator’s narrow focus will be protecting the long-term
sustainability of clubs for the benefit of their fans and communities and helping to
prevent the collapse of clubs like Bury and Macclesfield Town.
● Creating a new, strengthened owners’ and directors’ tests to make sure a
club’s custodians – their owners and directors – are suitable. We have seen
growing concerns about financial mismanagement in football, and questions about
illicit finance. The new Owners and Directors Test will protect fans from
irresponsible owners.
● Setting a minimum standard of fan engagement, which clubs will need to meet,
and requiring the support of a majority of fans for any changes to the club’s
badge, name, home shirt colours. While most clubs have a strong relationship
with their fans and consciously engage them in decisions about club heritage, not
all do. Fans of Cardiff City and Hull City have had to recently had to battle to bring
back, or keep, their club’s colours and badge (Cardiff City) and name (Hull City).
● Requiring clubs to seek the Regulator’s approval for any sale or relocation
of the stadium and demonstrate how they have consulted their fans as part
of this. At Derby County, we saw the issues caused by the decision to sell the
club’s stadium to a separate company owned by the club’s owner.
● Preventing clubs from joining breakaway or unlicensed leagues. In 2021,
Premier League fans faced the prospect of a breakaway European Super League
that was fundamentally uncompetitive, and which threatened to undermine the
footballing pyramid against the wishes of fans. Fans will no longer face the
prospect of seeing their clubs sign up to ill-thought out proposals such as the
European Super League.
● Intervening as a last resort to ensure financial sustainability through the
redistribution of broadcast revenue. The Government recognises that the
current distribution of revenue in the top 5 divisions is not sufficient, contributing to
problems of financial unsustainability and having a destabilising effect on the
football pyramid. The Regulator will have powers in extremis – if the leagues
themselves have not come to a voluntary agreement – to ensure financial
sustainability.
● Establishing a compulsory ‘Football Club Corporate Governance Code’.
Clubs will be required to report annually on corporate governance, setting out how
they apply the principles of the Code and why this is suitable for their
circumstances.
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Territorial extent and application
● The Bill will extend and apply to England and Wales. The regime will only apply to
the English football pyramid, with regulations setting out which leagues (the top 5
tiers) will be captured.
Key facts
● The Premier League is a global success, attracting more viewers and higher
revenues than any of its international rivals: in the 2021-22 season the Premier
League’s aggregate revenue was £5.5 billion – compared to Spain’s La Liga (£2.8
billion) and Italy’s Serie A (£2.1 billion).
● However, this cannot disguise the underlying fragility of the English football
pyramid. Fundamental problems of perverse incentives, poor governance, and
defective industry self-regulation mean there is a high and growing risk of financial
failure among clubs:
o clubs are consistently loss making and rely on external funding. From 2010-
11 to 2021-22, Championship clubs made collective pre-tax losses over £3
billion and they exceeded £1.7 billion in the last five seasons for which data is
available (2017-18 to 2021-22);
o even at Premier League-level, from the 1999-2000 season onwards, 19 out of
23 (83 per cent) Premier League seasons have resulted in pre-tax losses,
highlighting that this is a persistent issue even for the highest earning clubs.
● Levels of borrowing and debt are increasing. Across the Premier League and
Championship combined, net debt increased to £4.4 billion in 2022. This shows
that many clubs across the pyramid are financially vulnerable. The unique
importance of football clubs to their fans and local communities means the social
costs of financial failures would be significant. The introduction of an Independent
Football Regulator will help to promote and secure the financial sustainability of
clubs and reduce the likelihood of financial collapse.