Historic legislation to reform the governance of men's elite football in England and put fans back at the heart of the game has been introduced in Parliament today.
• ‘Independent Football Regulator’ to be enshrined in law that will give fans a greater voice in the running of their clubs
• Regulator will promote financial sustainability and will have the ability to fine clubs up to 10% of turnover for non-compliance
• Breakaway closed-shop competitions such as the European Super League to be blocked under new legislation
• Regulator will implement strengthened owners’ and directors’ tests and be equipped with backstop powers to impose a ‘new deal’ on financial distributions
The Bill comes at a critical juncture for English football, following the attempted breakaway European Super League, and a series of high profile cases of clubs being financially mismanaged or collapsing entirely.
The legislation being introduced today goes further than the Government’s manifesto commitment, establishing the new ‘Independent Football Regulator’ (IFR) as a standalone body - independent of both Government and the football authorities.
The body will be equipped with robust powers revolving around three core objectives: to improve financial sustainability of clubs, ensure financial resilience across the leagues, and to safeguard the heritage of English football.
Under the Football Governance Bill, new owners and directors will face stronger tests to stop clubs falling into the wrong hands, and face the possibility of being removed and struck off from owning football clubs if they are found to be unsuitable.
The Bill also includes new backstop powers around financial distributions between the Premier League and the English Football League (EFL). These powers mean that if the leagues fail to agree on a new deal on financial distributions, then the backstop can be triggered to ensure a settlement is reached.
For the first time, clubs from the National League (Step One in the football pyramid) all the way to the Premier League will be licensed to compete in men’s elite football competitions in England. The proposed licensing regime will be proportionate to any problems, size and circumstances and involve a system of provisional and full
licences, to give clubs time to transition.
It follows a number of issues in recent years including financial mismanagement, breakaway plans for the European Super League, and changes to club names, badges and colours against the wishes of fans.
Prime Minister Rishi Sunak said: “Football has long been one of our greatest sources of national pride. Up and
down the country, it brings people together in celebration or commiseration.
“But for too long some clubs have been abused by unscrupulous owners who get away with financial mismanagement, which at worst can lead to complete collapse – as we saw in the upsetting cases of Bury and Macclesfield Town.
“This Bill is a historic moment for football fans – it will make sure their voices are front and centre, prevent a breakaway league, protect the financial sustainability of clubs, and protect the heritage of our clubs big and small.”
Culture Secretary Lucy Frazer said: “Football is nothing without its fans. We are determined to put them back at the heart of the game, and ensure clubs as vital community assets continue to
thrive.
“The new Independent Regulator of Football will set the game on a sustainable footing, strengthening clubs and the entire football pyramid for generations.”
All clubs will be subject to new baseline requirements enshrined in legislation irrespective of licence status, such as protections against breakaway competitions and stadium relocations.
The provisional licence will require all clubs to meet some mandatory conditions as standard, including basic requirements on fan engagement, corporate governance and financial reporting.
The regulator will then apply additional bespoke licence conditions on clubs, as necessary, to ensure they meet the necessary standards for a full licence across three key areas: financial resources, non-financial resources (such as relevant systems, policies and personnel), and fan engagement.
Fan engagement is a central tenet of the Football Governance Bill and will ensure fans are put back at the heart of the game. As part of the licence, clubs will be required to consult their fans on key off-field decisions, such as club heritage and the club’s strategic direction.
Sports Minister Stuart Andrew said: “Football clubs are vital community assets and for far too long some fans have been taken for granted, and clubs lost to unscrupulous owners.
“Today’s Bill will pave the way for the creation of an Independent Football Regulator, ushering in greater protections to help clubs and their fans thrive over the long term.”
Chair of the Fan-Led Review of Football Governance Tracey Crouch CBE MP
said:
“Football fans can begin to breathe a sigh of relief in the knowledge that the next
steps towards protecting the long term sustainability of the pyramid have now
been taken.
“A significant amount of work has gone into this piece of legislation which will establish a truly independent force in football that will place fans and good governance at its heart."
Chief Executive of the Football Supporters Association Kevin Miles said:
“The FSA warmly welcomes the tabling of the Football Governance Bill arising from the 2021 Fan Led Review, and particularly its central proposal to introduce statutory independent regulation of the game.
"The regulator provides a means to intervene and stop clubs being run into the ground, protect the heritage of clubs, give supporters a much bigger voicein the running of the game, and prevent any chance of domestic clubs joining a breakaway European Super League.
"The regulator must be given the power to impose a financial settlement in the interests of the sustainability of the game as a whole. It is far too important to be left to the squabbling between the vested interests of the richest club owners.”
In addition, today’s Football Governance Bill sets out further detail on how the IFR:
• will produce a periodic State of the Game report setting out an evidence based analysis of any issues around financial sustainability and systemic resilience in English football.
• will assess all new owners and directors and be able to disqualify owners/officers, in the case of persistent and wilful non-compliance.
• will require clubs to meet licence conditions on fan engagement, where guidance for clubs will set out areas requiring fan consultation.
• will not be overly-interventionist and will adopt an advocacy first approach, but
backed up by a broad suite of powers to investigate suspected non-compliance, compel information, and enforce if necessary.
• will have no input in on-field decisions and will act in a way that minimises any impact on sporting competitions.
The Football Governance Bill is the result of the Government’s commitment to deliver a fan-led review of football governance. Triggered after the attempted breakaway European Super League competition, the review sought to examine the industry in detail following the failure of at least 60 professional football clubs since
the advent of the Premier League in 1992.
The key recommendation from the review chaired by Tracey Crouch MP was the introduction of an independent regulator of elite men's football in England.
In parallel with the Bill’s introduction, the Government has today confirmed plans to stand up a shadow regulator that will be operational as the IFR is formally set up.
Decisions will be taken on the location of the IFR, the Chair of the regulator and other board members in the weeks and months ahead as the bill makes its passage through Parliament. This follows the appointment of the interim chief operating officer Martyn Henderson OBE in January, who will work with a team on the frameworks,
policies and guidance required for the formation of the regulator.
English football remains a global success story and the Premier League is the envy of sporting competitions around the world. The Government remains fully behind its continued success.
Despite this success, the combined net debt of clubs in the Premier League and Championship had reached £5.9 billion by the end of the 2020/21 season. In the same season, the Championship reported a wage-to-revenue ratio average of 125 percent clearly demonstrating clubs were stretching themselves far beyond their means.
While our national game remains one of the UK’s greatest cultural exports, with clubs and leagues around the world modelling themselves on its success, the Government is today taking the necessary and targeted steps to ensure that continues for generations through the introduction of the independent football regulator.
EFL Chair, Rick Parry, said:
“The EFL welcomes today’s arrival of the Football Governance Bill to Parliament in what we hope will be an important milestone to help us secure the long-term financial sustainability of England’s football pyramid.
“If delivered on the right terms, this landmark legislation can help fix the game’s broken financial model by offering the independent input ultimately needed to help ensure that all Clubs can survive and thrive in a fair and competitive environment.
“The establishment of the Independent Football Regulator will be at the heart of this reform, and we are encouraged that the Regulator will be given backstop powers to deliver financial redistributions should the game be unable to agree a deal itself.
“In recent years, we have been working with Government and across Parliament on a cross-party basis. It is clear there is an appreciation of just how important professional Clubs are to their communities and why they must be protected.
"We are pleased that the Government has stated its commitment to the State of the Game Review which will provide the basis for the Independent Regulator’s work in making the game financially sustainable.
“The League looks forward to contributing to that Review while simultaneously working with EFL Clubs,
Parliamentarians, and officials to ensure that the Football Governance Bill is fit for purpose and can deliver the best regulatory regime to safeguard our game for generations.
“Finally, on behalf of the EFL I would like to thank MPs, Peers, fans and all those who have helped get the Bill to Parliament and we will continue to work collaboratively in the months ahead.”