The Football Governance Bill and the Independent Football Regulator - Once upon a time in Bury

There are three things of which we can be certain.

• Death
• Taxes
• Football matters to people.

We did not need to come from Bury to know how traumatic the demise of that club was for that community. Football matters to people.

Not just ‘elite’ football either. Not just ‘household name’ football we watch on major broadcasters throughout most weekends. Not just ‘glamourous’ football.

All football matters.

The question then becomes, how do we ensure this football survives and thrives, for the benefit of so many people up and down the country. What should our approach be and why is it important?

How did we get here?

Following a tumultuous period of financial distress and the outrage at the proposed formation of a ‘European Super League’, the UK Government’s solution was statutory intervention. The Government needed to intervene. This appeared to prompt relief and horror in equal measure.

The fan led review of football had indeed been led by people who knew what they were talking about. Many different groups had engaged with the process, and it was clear what the strategy ought to be. The Conservative government tabled the ‘Football Governance Bill’ (the “FGB”) in February 2023. Here then, was the solution to protect the beautiful game.

Unsurprisingly, the prospect of government intervention provoked outrage in some quarters. Those associated with Premier League clubs have been particularly vocal in their criticism. Such criticism is often that the Government should have nothing to do with football thank you very much (which seems a fair one on the face of it) to the more er..optimistic argument “the Premier League is one of the country’s great success stories.”

True, but not really a reason to kick the Independent Football Regulator into touch (changing sports momentarily).

Although the Conservatives’ proposed Football Governance Bill was not approved before the 2024 general election, the new Labour government of Sir Keir Starmer promised to pass a ‘strengthened’ version. We can be confident the main features of the OG FGB will remain.

But what will happen and why does it matter?

The FGB will seek to establish a new public body, the Independent Football Regulator (the “IFR”) which will hold three primary objectives:

• Promotion of club financial soundness
• Systematic financial resilience, and
• Safeguarding the heritage of some of the world’s oldest football clubs.

Importantly, the IFR will require each club in the top five tiers of English football to hold a licence to operate. The IFR will have the power to impose conditions on such a licence, for example relating to fan engagement and financial regulation.

The regulator will also be empowered to introduce a much more rigorous Owners’ and Directors’ Test (“OADT”), to create a larger sense of responsibility amongst the custodians of prestigious English clubs. This test will be comprised of three elements:

• Fitness test (as to propriety rather than of the bleep variety) for owners and directors)
• Source of wealth test (for owners) and a
• Requirement for financial plans and resources to be submitted (for owners). 

A “multi-year business plan” will also be required, submitted periodically by the owners of English Football League (“EFL”) and Premier League (“PL”) clubs. The aim is to regularly inquire as to the suitability of the big names that own our local clubs. For example, Dai Yongge, the owner of Reading FC who has been ordered to sell the club as a consequence of him failing to turn a profit since taking the club over in 2017.

Greater accountability. Greater propriety. A more diligent OADT to reduce the risk of an apocalypse, for smaller clubs. So far, so uncontroversial.

But there are plenty of people with significant objections.

One likely bone of contention relates to parachute payments. The EFL has been clear for years that reform of parachute payments is essential because these payments risk compromising the sporting integrity of the EFL Championship. A glance at the PL table, now that all three promoted clubs have been relegated to the Championship with an unprecedented four games to play, indicates the potential problem. 

PL owners and directors point out that parachute payments diffusing the impact of relegation encourages investment in PL first teams and squads, which therefore makes the PL more competitive. If owners were concerned about a financial cliff edge in the event of relegation, so the argument runs, they would not spend the money and only a small number of clubs would ever compete for honours. 

Irrespective of viewpoint, the IFR’s will have a role as a backstop: holding the final card to force through a settlement in any dispute about remuneration between the PL and EFL. It is difficult to resist the argument that such intervention is needed in a market, where competition has been so seemingly skewed. PL advocates plainly have a point, but it’s not just about the PL. We need to think about why the fan led review was arranged in the first place. Clubs went out of business. Supporters actually lost the club of their birth, of their upbringing …and that matters.

Upon witnessing the backlash against Florentino Pérez and his proposed European Super League, the UK Government realised the power held by English football fans, as it was majorly their influence which caused multiple clubs to withdraw from the competition the night of the announcement (even despite the rumoured joining fee of £310 million). The IFR, therefore, wishes to protect the interests of the fans, emphasising the importance of fan engagement in protecting the heritage of EFL and PL clubs. Fans of clubs in the top five tiers of English football would now be consulted on any proposed material changes to club crests, colours, emblems, or names.

If a regulated club is seen to be operating unsustainably or is playing with fire in respect of the above, the regulator has options for intervention, beginning with “compliance through advice, soft influencing and informal engagement” allowing clubs the opportunity to turn things around on their own volition. If this light-touch approach is neglected by the club, the IFR will hold the powers to compel club action or even appoint an external individual to take control of a club and attempt to get it back on track. The IFR will require details of decision makers at every licensed club to be provided, paving the way for sanction.

But what of UEFA? What do they make of these proposals? UEFA emerged favourably from the European Super League frenzy as erstwhile and devoted custodians of the game; reputation enhanced for their doubtless principled endeavours to conserve the game for us ordinary folk.

The UEFA general secretary, Theodore Theodoridis, has warned of the implications if the regulator is deemed to be not so independent. He detailed that England could be banned from the European Championship in 2028 (despite hosting it) “if a line is crossed… in relation to independence from Government”. 

Interesting. Some might suggest UEFA, as guardians of the Europa League is ideally placed to help ensure sporting strength in one league is not compromised by concentrating on its more lucrative counterpart. 

The expansion of the UEFA Champions League interestingly followed the (impressive) resistance to Super League plans. No one would argue the expansion of the Champions League has compromised the strength of the Europa League. Would they?

A great competition, the Europa League.

Manchester Utd and Tottenham Hotspur will be confidently looking forward to Europa League semi-finals this week. There may even be an all-English final and a triumphant qualification for, well, the UEFA Champions League. However, these clubs would have lost at least 34 Premier League games between them in the 2024/25 season. Almost an entire season’s worth of Premier League defeats but one of the so called “Big Six’ would be back in the big time – eating at the top table, waiting for the money to arrive.

So, UEFA’s observations will certainly be, interesting. 

Going forward

The most notable requirement after the establishment of the IFR is the ‘State of the Game’ report. This report will need to be published as soon as possible after the establishment of the IFR and will subsequently be deployed every five years. The report is expected to broach topics such as financial health, market structure, and economic issues within the world of football.

The IFR will also publish guidance which will seek to ensure that clubs, owners, directors, and competition organisers are aware of what is expected of them, such as information on how to apply for a licence and how the IFR will decide whether to accept or reject any licence applications.

Why does this matter?

It matters because there will be a great deal of discussion about why the IFR is a good idea and even more discussion about why it is a bad idea. There will be discussion about overreaching of duties and state intervention. Anyone with an interest, legitimate or not will be entitled to their view, and we will certainly hear plenty of those. 

But when we do hear those views - when we do hear the comments and the scorn, the outrage and the indignation. Not only should we properly scrutinise and question “does this necessarily follow”, and ask ourselves whether that person would say that, wouldn’t they? They might. They might not.

But we must remember why the IFR and the OG FGB was considered necessary in the first place.

For that we need to look around us at the clubs we know in our villages, towns and cities. Not the ones on the TV. Not the ones on the back pages (or any pages) of the newspapers. The other ones. 

We must remember how many people would be affected if they no longer existed. Because that is not just a risk. It is reality.

There may be people who argue none of this actually matters. Try telling that to the people of Bury.