The announcement of a new independent football regulator following former DCMS Tracey Crouch’s Fan Led Review of Football governance has drawn much commentary from the football community.

Whilst the Government maintains that the new regulator will be a totally independent body, it is in fact Government intervention in all but name. The Football Association has historically always resisted such intervention. As the overarching Governing Body of Football, it insisted the game was better governed by those who knew what made it tick and understood the values of those involved in the sport, both professionally and at grass-roots levels.

The authority of the Football Association has, however, dwindled significantly as a result of the massive success of the Premier League, driven by ever-increasing television and sponsorship revenues. This in turn has caused a deep divide between those who can share in those riches and those who do not. Clubs from the EFL who chase that rainbow overstretch and inevitably hit financial buffers, sometimes fatally. Premier League clubs relegated to the EFL face similar challenges, and perhaps fates. The richest clubs seek even greater riches and threaten the very structure of English football. It is therefore not surprising that the fans want to have their say.

Why now?

Chairman of the EFL Rick Parry (a founding architect of the Premier League) now lobbies for a 25% share of all television revenues and the abandonment of parachute payments for clubs relegated to the EFL. It is likely that these proposals will fall on deaf ears at the Premier League, despite one of the main purposes being that a fair distribution of money filters down the English football pyramid from the top level.

Is this, however, a start for a new “levelling-up” agenda to be enforced by the independent regulator? Why have the FA, the Premier League, the EFL and the PFA not sorted out these issues themselves, as both they and football fans have recognised these for some time?

In an attempt to protect the game’s cultural heritage, the purpose of the regulator is expected to include:

  • Preventing English clubs from joining closed-shop competitions, deemed to harm the domestic game
  • Preventing a repeat of financial failings seen at numerous clubs
  • Introducing a more stringent owners’ and directors’ test to protect clubs and fans
  • Giving fans power to stop owners changing a club’s name, badge and traditional kit colours

Is it necessary?

How the responsibilities of the independent regulator will be carried out is not abundantly clear. While the headline powers it is to be granted certainly look noble, the devil will be in the detail. When grappling with the scope of the role, some key considerations arise:

  • How will a “strengthened fit and proper persons” test be operated?
  • How will such a test operate for current owners?
  • How will the test operate for foreign investors such as from Qatar, Saudi Arabia, China and the USA?
  • How will fans have greater say in clubs as corporate entities with their own owners and directors?
  • What powers can the independent regulator have to dictate commercial policies on clubs and their owners?
  • How will club finances be audited by the independent regulator?
  • What will be the effect of imposed financial sustainability regulation on player wages?
  • Will such regulation have a deterrent effect on investment into football and the Premier League in particular?
  • What precisely will any Football Club Corporate Governance Code contain and prescribe?
  • What consequences will all this have across the game generally?
  • What will be the constitution of the independent regulator and which persons will be appointed to operate it? What will be their experience?

No doubt it will invoke a robust and controversial debate over the next months, with the Premier League saying it does not want the body to lead to any “unintended consequences” that could affect its global appeal and success.

If you have questions about how the proposals could impact your club, please contact Peter Millichip.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.