Football Governance
Bill
“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
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.
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:
- 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);
- 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.
