Football in Focus: The King’s Call for Government Intervention

This article was co-authored by Tom Fennelly, Trainee Solicitor.

In the week following England’s disappointing loss in the UEFA European Football Championship final, on 17 July 2024 the King’s Speech addressed a prospective Football Governance Bill (“Bill”). 

The Bill aims to ensure greater sustainability in the game and strengthen protection for fans, including the establishment of an independent football regulator (“IFR”). [1]

The 2024/25 football season seems certain to be dominated by off the pitch issues such as the Bill and Manchester City’s legal battles.

Why was the Bill introduced?

The King’s Speech Background Briefing (“Briefing”) provides that despite the Premier League’s success as a domestic football league, “the game has fundamental governance problems that have led to excessive and reckless risk-taking at too many clubs”. The government also considers that “ineffective regulation” threatens the stability of the game. [2]

Various statistics are relied on in the Briefing to demonstrate the success of the UK’s football leagues, but also to highlight the financial risks facing clubs in today’s market. For example, the Briefing notes that the Premier League is the most watched football league in the world, bringing in £6.1 billion in the 2022/23 season, which is more than Spain’s La Liga and Italy’s Serie A combined. However, it also highlights that the top clubs are consistently running at a loss, noting that in 2022/23, Premier League and Championship clubs amassed pre-tax losses of £1 billion, and that their combined net debt rose to £4.7 billion.

What does the Bill / IFR hope to achieve?

The Bill aims to “protect football clubs across England, ensuring their financial sustainability and giving fans a greater say in the way their clubs are run” and “drive future investment and growth” by providing certainty. In particular, it is proposed that the Bill will:

• Introduce a requirement that regulated clubs, under the governance of the IFR, hold a license to operate as professional football clubs.
• Require clubs to “demonstrate sound basic financial practices”. The aim of this is to support clubs from being financially mismanaged, which has led to the several clubs teetering on the edge of administration in the last decade.
• Create a new, strengthened owners’ and directors’ test to ensure club custodians are suitable and protect fans from irresponsible owners.
• Require clubs to obtain the IFR’s approval for a stadium sale or relocation, given the significance of a stadium to a club’s assets.
• Prevent clubs from joining unlicensed leagues, such as the European Super League.
• Establish a “Football Club Corporate Governance Code”, which would require clubs to report on their application of key principles of the Code annually. [3]

Comment

Opinions will be split on if there is the need for such regulation.  Many would cite the success of the game as a barometer for maintaining the status quo, and various stakeholders will also continue to voice opinions and concerns.

In a statement released by the Premier League when the Bill was initially proposed by the previous government, it expressed that whilst they largely support the key ideals the Bill proposes, they “remain concerned about any unintended consequences of legislation that could weaken the competitiveness and appeal of English football”. [4] The current English Football League ("EFL”) chairman, Rick Parry, has shown strong support for the Bill, stating that the EFL “stand ready to work with the Government on any outstanding matters from the original Bill and to then move it forward into legislation as quickly as possible”.[5]

At this stage, there remain many unanswered questions as to the operation of an IFR, including: who will be appointed? What will be the extent of their powers? How will they operate in conjunction with major European and International governing bodies? And perhaps most pertinently, how will they be funded and compete with the financial powerhouses of the English game in regulation and enforcement? 

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