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 in life: death, taxes and 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 via major broadcasters throughout most weekends. Not just ‘glamourous’ football.

All football matters.

The question then becomes how do we ensure 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 then Conservative government tabled the Football Governance Bill (FGB) in February 2023. This 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 (which seems a fair one on the face of it) to the more ‘optimistic’ argument that ‘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 promised to pass a ‘strengthened’ version. We can be confident the main features of the Bill will remain.

But what will happen and why does it matter?

The Bill will seek to establish a new public body, the Independent Football Regulator (IFR), which will have three primary objectives:

· the promotion of clubs’ 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 IFR will also be empowered to introduce a much more rigorous owners’ and directors’ test (OADT), to create a larger sense of responsibility among the custodians of prestigious English clubs. 

This test will be comprised of three elements:

· a fitness test (as to propriety rather than of the bleep variety) for owners and directors;

· a source of wealth test (for owners); and

· a requirement for financial plans and resources to be submitted to the IFR (for owners).

A ‘multi-year business plan’ will also be required, submitted periodically by the owners of English Football League (EFL) and Premier League clubs. 

The aim is to regularly inquire as to the suitability of the big names that own our local clubs. A notable example is Dai Yongge, the owner of Reading FC, who was ordered to sell the club as a consequence of his disastrous period of ownership of one of England’s oldest clubs since in 2017.

Last weekend, Reading FC announced that a sale had finally been agreed with Rob Couhig, the former owner of Wycombe Wanderers, thereby ending almost two years of uncertainty for long-suffering Reading fans.

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 Premier League table, now that all three promoted clubs have been relegated back to the Championship with an unprecedented four games to play, indicates the potential problem.

Premier League owners and directors point out that parachute payments diffusing the impact of relegation encourages investment in first teams and squads, which therefore makes the top league 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 the viewpoint, the IFR will have a role as a backstop: holding the final card to force through a settlement in any dispute about remuneration between the Premier League and the EFL. 

It is difficult to resist the argument that such intervention is needed in a market where competition has been so seemingly skewed. Premier League advocates plainly have a point, but it’s not just about the Premier League. 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.

On 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 that 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 fans, emphasising the importance of fan engagement in protecting the heritage of our league clubs. Fans of clubs in the top five tiers of English football will now be consulted on any proposed material changes to club crests, colours or names.

If a regulated club is seen to be operating unsustainably or is playing with fire in respect of the above, the IFR 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 have the power 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 the details of the decision makers at every licensed club to be provided, paving the way for possible sanctions.

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, its reputation enhanced for its doubtless principled endeavours to conserve the game for the ordinary fan.

UEFA General Secretary, Theodore Theodoridis, has warned of the implications if the IFR is deemed to be not so independent. He said that England could be banned from the European Championships 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 followed the (impressive) resistance to the 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 United and Tottenham Hotspur are competing for the chance to compete in an all-English final and qualification for the Champions League, but both have had poor seasons in the Premier League. Nonetheless, 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 regulator 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 the overreach 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.

We must remember why the IFR and the Football Governance Bill were 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 constantly seen on 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.