The Football Governance Bill: the challenges facing football's new regulatory framework

As an insolvency and restructuring solicitor, I spend my days advising on contentious insolvencies, corporate restructuring, and financially distressed situations with various stakeholder interests. While my practice focuses on commercial law rather than statutory regulation, recent government proposals for an independent insolvency regulator—which ultimately stalled in 2023 despite initial enthusiasm—have given me an appreciation for how difficult regulatory reform can be to implement successfully.

The Football Governance Bill presents an interesting comparable: a regulatory framework whose success remains uncertain given the complex landscape it must navigate. Whilst I am no expert in professional regulation or matters involving competition law, my interest in this particular statute goes beyond professional curiosity as a Newcastle United Football Club supporter (for my sins!) who witnessed my club's protracted takeover by Saudi Arabia's Public Investment Fund in 2021—exactly the kind of ownership complexity that the Bill seeks to address through clearer regulatory frameworks.

The Regulatory Framework

The Football Governance Bill, completing its final parliamentary stages in July 2025, will establish an Independent Football Regulator (IFR) with unprecedented powers over English football's top five tiers. The Bill creates a licensing system requiring all clubs to demonstrate financial sustainability, appropriate governance, and adequate fan engagement.

The IFR's primary objective is to "protect and promote the sustainability of English football," prioritising stakeholder protection—fans and local communities—over pure commercial freedom.

Financial sustainability provisions

The Bill's financial regulations require clubs to submit detailed financial plans, including funding sources, revenue projections, and risk assessments. This creates ongoing financial monitoring to build stakeholder confidence in club management.

The Bill implements forward-looking sustainability requirements rather than merely responding to financial distress. Clubs must demonstrate they can meet obligations as they fall due—essentially a continuous solvency test. For well-funded clubs like Newcastle, this should pose few difficulties, but it represents a significant shift toward preventive regulation.

The IFR can impose financial penalties up to 10% of a club's annual revenue—potentially tens of millions for Premier League clubs. This creates a powerful enforcement mechanism without the nuclear option of closure, though the IFR can ultimately revoke operating licences for persistent non-compliance.

The ownership test: lessons from Newcastle's experience

The Bill proposes to introduce enhanced owners' and directors' tests, removing the previous requirement for the IFR to consider the UK government's "foreign and trade policy objectives." This change directly addresses concerns raised during Newcastle's takeover process, where geopolitical considerations appeared to influence the Premier League's assessment.

The removal of explicit governmental policy considerations should provide more predictable assessment criteria, though the IFR retains broad discretion to determine "suitability."

The Bill requires owners to demonstrate "honesty, integrity and financial soundness"—familiar standards from director fitness assessments. However, unlike many commercial situations, football club owners face ongoing monitoring rather than point-in-time assessment, creating continuous compliance obligations. 

This new test may cause issues for clubs that dubiously passed the previous owners' and directors' tests where their appointment aligned with the UK Government’s foreign and trade policy objectives. Of course, precisely how this new test is applied in practice will come down to the IFR’s discretion. Watch this space…

Appeal mechanisms and legal challenges

The Bill establishes a sophisticated appeals framework utilising the Competition Appeal Tribunal (CAT). Most IFR decisions are appealable only on judicial review grounds—examining legality, rationality, and procedural propriety rather than allowing full merits review. However, ownership and directorship determinations receive full merits appeals, recognising their fundamental impact on individuals' rights.

This two-tier approach distinguishes between decisions requiring commercial judgment best left to the specialist regulator and those affecting fundamental individual rights warranting fuller scrutiny.

Competition law implications

The Bill's most controversial provision prohibits clubs from joining "prohibited competitions"—directly targeting breakaway leagues like the proposed European Super League. This raises significant competition law questions about restraint of trade and freedom of association.

The appointment of former Competition and Markets Authority legal director David Riley to head the IFR's legal team suggests awareness of these challenges. The regulator will need to balance stakeholder protection against potential legal challenges based on competition principles. 

Fan engagement and heritage protection

The Bill mandates meaningful fan consultation on key decisions including ticket pricing, stadium relocations, and heritage changes. Clubs must demonstrate "effective engagement" with representative fan groups, with the IFR empowered to determine what constitutes adequate representation.

As a Newcastle fan, who has historically felt marginalised by my club’s previous ownership under retail tycoon, and all-round man of the people(!), Mike Ashley, this provides statutory protection for supporter voices in club governance—a significant departure from the view that fans are mere consumers.

Implementation Realities: The Practical Challenges Ahead

While the Bill's objectives are admirable, its implementation faces significant practical challenges that may determine whether it succeeds where previous regulatory attempts have failed.

A crowded regulatory space

The IFR enters a space already occupied by multiple regulatory bodies including the constituent leagues, the Football Association, and international organisations such as FIFA and UEFA. This creates complex jurisdictional questions about how the IFR will coordinate with existing bodies without creating conflicts or regulatory overlap.

The challenge is particularly acute given FIFA and UEFA's traditional hostility to government interference in football governance. The IFR must thread the needle between meaningful domestic regulation and maintaining England's standing in international football—a balance that will require careful diplomacy and precise legal drafting.

The Premier League's internal fragmentation

Perhaps most concerning is the state of the organisation the IFR will primarily regulate. The Premier League is increasingly struggling to regulate itself, spending £45 million on litigation against its own clubs in the 2023/24 season (with figures for the 2024/2025 season yet to be published). Recent years have seen substantial divisions over Associated Party Transaction rules and Profit and Sustainability regulations, with multiple clubs challenging the league's authority through the courts.

This may create what has been termed a "Frankenstein's monster" scenario: the IFR will be regulating an organisation that has gradually lost control over its own constituents. When the primary regulatory target is itself in internal chaos, external regulation becomes exponentially more complex.

Structural financial imbalances

The Bill faces the fundamental challenge that regulatory oversight alone cannot solve structural economic problems. The Premier League's domestic broadcasting deal is worth approximately nine times that of the EFL, creating financial disparities that drive the unsustainable behaviour the IFR seeks to prevent.

While the Bill includes backstop powers over revenue distribution, including parachute payments, these mechanisms may prove insufficient against market forces that strongly incentivise risk-taking behaviour. Clubs will continue to gamble on promotion to the Premier League as long as the financial rewards remain so disproportionate.

Constitutional and jurisdictional questions

The IFR's independence, while enhanced by removing governmental policy considerations, remains imperfect. The Secretary of State retains power to modify the regulator's scope through secondary legislation, creating potential for political interference.

This tension between democratic accountability and regulatory independence reflects broader constitutional questions about arm's-length governance across regulated sectors. The regulator must maintain credibility while remaining ultimately accountable to Parliament.

Conclusion

The Football Governance Bill represents a fundamental shift from industry self-regulation toward statutory oversight. The regulator must somehow create holistic solutions while working within a system where the most powerful stakeholders—Premier League clubs—have both the strongest incentives to resist change and the greatest resources to challenge decisions through litigation.

The IFR's early decisions will be crucial in establishing whether it can break football's cycle of often ineffective governance or whether it will be overwhelmed by the structural problems it inherits. The regulator must simultaneously manage a fragmented Premier League, navigate international sporting politics, and solve fundamental economic imbalances—all while building institutional credibility and avoiding legal challenges. Quite the task!

It will be interesting to see how this unfolds. For clubs like Newcastle United - the world's richest club - the IFR may level the playing field by applying spending restrictions equally across all clubs. Alternatively, it could entrench existing prejudicial profit and sustainability rules, while retrospective ownership tests and enhanced regulatory oversight may create further divisiveness amongst clubs rather than the intended cohesion. The IFR's early decisions will prove crucial in determining which path English football takes.