Will it go to penalties? Government introduces a new football regulator

Last week, the Government introduced the Football Governance Bill to Parliament. The culmination of over three years’ work, the Bill addresses concerns about the financial sustainability of English men’s professional football, the probity of individual club owners, and the risk of breakaway leagues (most famously the European Super League) stifling competition.  

The Bill is an evolution of long-standing DCMS policy, since it is faithful to last year’s white paper and Tracey Crouch’s “fan-led” review of football. Perhaps the most notable aspect is the questions that remain unanswered. The Bill is by no means the final word on football regulation, and defers knotty issues on financial sustainability, redistribution deals, and interplay with existing league rules to the regulator and, by extension, the next government. These are questions clubs, civil servants, and politicians will be grappling with for years to come.  

A New Regulator for Men’s Football 

The building blocks of the new regime are clear. There will be a new regulator for men’s professional football in England, which will only be able to intervene to promote the financial resilience of clubs and the football pyramid and to safeguard English football’s heritage, such as stadiums, club crests and strips.  

The Government has argued that the impact on well-run clubs will be minimal. It has been at pains to say that the regulator will not interfere with what happens on field; the regulator will be required to consider how to avoid affecting the competitiveness of English football or adversely affecting investment. English football is one of the UK’s biggest exports, with the Premier League earning £5bn from overseas broadcasting rights between 2022-5. The Government will want to protect this as much as possible. However, gaps in the details of the regime, combined with the time it will take for the regulator and next government to fill in the blanks, create uncertainty and risks for clubs of all sizes. 

Unanswered Questions 

The largest of these gaps concerns the details of new financial rules. Initially, these will be light touch - clubs will be granted a provisional licence following checks on financial and corporate governance documentation. This will fire the starting gun for the three-year full licensing process, to include financial and non-financial conditions tailored to individual clubs’ specific risks.  

While this buys the regulator time to translate the Bill into a bespoke regulatory regime, there are risks to this approach: three years is a long time, and provisional licensing conditions may be insufficient to prevent clubs from failing in the meantime. The Bill also only provides high-level indications of what a full licence might look like. The regulator and next government have their work cut out to apply these principles to over 100 clubs from the top of the Premier League to the relegation zone of the National League.  

The uncertainty extends beyond the management of individual clubs. Revenue from broadcast rights will be in scope of the regulator’s backstop powers to arbitrate financial redistribution deals between leagues. The Bill provides few details on how it should balance competing factors when deciding on the flow of money within the football pyramid. With the EFL and Premier League seemingly at an impasse on a new redistribution deal, this could be an early test for the new regulator, with little on the statute book to fall back on and significant political and public attention on the outcome.  

Finally, the Bill does not solve the question of what happens if the regulator’s rules conflict with those of the EFL or Premier League. This is not an unlikely outcome: last year’s white paper explained that the EFL and Premier League would need to harmonise their financial sustainability rules with the regulator’s. However, as with redistribution decisions, the Bill offers the regulator neither clarity on its primacy over the leagues’ rules nor a mechanism to force the leagues to approach discussions on a voluntary agreement constructively.

What comes next?

The Bill has been welcomed across the political spectrum: Thangam Debbonaire, the Shadow DCMS Secretary, said she wanted to see the new regulator “robustly defend the interest of fans and ensure the financial sustainability of the football pyramid”. Labour’s support means the Bill is likely to get a relatively smooth passage.  

This would leave the regulator, and a future Labour government, to put the regime into practice. At the moment, there is something in the Bill to support most leagues’, owners’ and fans’ views on how football should be regulated. Not all of these are compatible; the regulator will need to come down on one side in due course. While broadly aligned with the current Government, Labour is likely to be instinctively more sympathetic to arguments in favour of more generous financial redistribution, and rules that favour smaller clubs. The Bill as drafted gives them leeway to do this. As football regulation enters extra time, there’s still plenty to play for.

This blog was written by Alfred Burton, Becky Young, Jamie Graves and Kiran Horwich. Alfred is a manager and advises clients in the digital and cultural sectors. Becky is a director who advises clients on competition and regulatory matters across a range of sectors. Jamie is a director, he supports clients on a range of policy, political and regulatory issues. Kiran is a partner, she works with a wide range of clients dealing with challenges in policy, regulation and organisational change in the UK and EU in many sectors.

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