Parliament is taking action to prevent the possibility of a breakaway super league and avoid the collapse of more football clubs by giving greater powers to the fans and installing an Independent Football Regulator (IFR).

Introduced on 18 March, the Football Governance Bill aims to reform who controls football, paving the way for significant changes in club management and financial sustainability. The move comes after it was revealed that football clubs in the Premier League and Championship had collectively racked up debts of £5.9bn by the end of 2020/21.

Central to the governance overhaul is the establishment of the IFR, to oversee financial operations, promote sustainability and safeguard English football heritage.

Prime Minister Rishi Sunak says: “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.

“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 seen in the upsetting cases of Bury and Macclesfield Town.”

The Bill comes at a critical juncture for English football, following the failed attempt to create a breakaway European Super League in April 2021, and a series of high-profile cases of clubs being financially mismanaged or collapsing entirely.

Chief Executive of the Football Supporters’ Association Kevin Miles says: “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 voice in the running of the game, and prevent any chance of domestic clubs joining a breakaway European Super League.”

New requirements for all clubs

Clubs from the National League up to the Premier League will now be licensed and all clubs will be subject to new legislated baseline requirements 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 Bill and will give fans a greater voice in the running of their clubs. As part of the licence, clubs will be required to consult their fans on key off-field decisions, such as club heritage (including changes to club names, badges and colours) and the club’s strategic direction. 

Sports Minister Stuart Andrew says: “Football clubs are vital community assets and for far too long some fans have been taken for granted, and clubs lost to unscrupulous owners.”

Powers of the IFR

The Bill sets out further detail on the remit of the IFR, including:

• Publication of 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.
• Assessment of all new owners and directors and the ability to disqualify owners/officers, in the case of persistent and wilful non-compliance.
• It will require clubs to meet licence conditions on fan engagement, where guidance for clubs will set out areas requiring fan consultation. 

According to the Bill, the IFR will not be overly interventionist and will adopt an ‘advocacy first’ approach, backed by a broad suite of powers to investigate suspected non-compliance, compel information and enforce if necessary.  

Apply the UK Corporate Governance Code

ICAEW’s Director of Corporate Governance & Stewardship, Peter van Veen, welcomed stronger financial oversight of professional football but said football clubs should apply the same Corporate Governance Codes that businesses abide by.

"The appointment of truly Independent directors, properly resourced audit committees and transparency through high quality reporting are the cornerstones of good governance and building stakeholder trust,” van Veen added.

"Many football clubs are large, complex businesses and should have the commensurate governance structures in place. We would encourage the new regulator to ensure any corporate governance standards for football clubs match the requirements set out in the UK Corporate Governance Code for the largest clubs and that all professional clubs in the top leagues should meet at a minimum the Wates Corporate Governance Principles," van Veen said.

In parallel with the Bill’s introduction, the Government has 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 passes through Parliament. The interim chief operating officer of the independent football regulator Martyn Henderson OBE, who stepped into the role in January, will work with a team on the frameworks, policies and guidance required for the formation of the regulator. 

"We look forward to sharing our thinking on good practice with the new regulator,” added Van Veen.