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Blocking clubs from joining a breakaway European Super League will be among the powers held by English football’s new independent regulator.
The plan for a regulator, recommended by a fan-led review last year, has been confirmed by the UK government.
Preventing historic clubs going out of business is one of the aims, as well as giving fans greater input and a new owners’ and directors’ test.
The significant move aims to protect English football’s cultural heritage.
The main purposes of the proposed new regulator will be:
- Stopping English clubs from joining closed-shop competitions, which are judged to harm the domestic game
- Preventing a repeat of financial failings seen at numerous clubs, notably the collapses of Bury and Macclesfield
- Introducing a more stringent owners’ and directors’ test to protect clubs and fans
- Giving fans power to stop owners changing a club’s name, badge and traditional kit colours
- Ensuring a fair distribution of money filters down the English football pyramid from the Premier League
“The English game remains one of the UK’s greatest cultural exports, with clubs and leagues around the world modelling themselves on its success,” the government said before its white paper on football governance – a policy document which outlines the proposed legislation – is released on Thursday.
“That is why the government is today taking the necessary and targeted steps to ensure that continues for generations.”
The Premier League was understood to be wary of a regulatory body when the proposals were announced in April last year.
The league says it is “vital” a regulator does not lead to any “unintended consequences” that could affect its global appeal and success.
What will the regulator cover?
European breakaway leagues
Six English clubs – Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham – were among a dozen from across the continent that announced plans to form a European Super League in a shock move in April 2021.
It sparked a tumultuous few days in English and European football.
Fans quickly demonstrated their anger at the plan outside English clubs’ stadiums – with similarly vitriolic protests taking place across Europe – forcing the Premier League clubs to back down and apologise.
Despite the U-turn, the debate over the future of top-level European football has continued.
“The regulator will have the power to prevent English clubs from joining new competitions that do not meet a predetermined criteria, in consultation with the FA and fans,” said the government.
“That criteria could include measures to stop clubs participating in closed-shop breakaway competitions which harm the domestic game, such as the European Super League.”
Financial stability and fans’ input
A new licensing system will require every club – from the Premier League to the National League – to prove it has a sustainable business model implemented by responsible custodians as part of an application process.
If clubs are not granted a license by the regulator, they will not be allowed to compete.
Another key power of the regulator will be ensuring fans have a greater say in their club’s strategic decisions.
Moves by owners which may prove controversial – for example, changing the name, badge and traditional kit colours, or moving stadium – will not be allowed to be made before consulting fans.
It will “put fans back at the heart of how football is run”, says the government.
New owners’ and directors’ test
The test to determine the suitability of owners and directors of English clubs has long been under scrutiny.
The regulator will introduce an “enhanced” test which will replace the current process implemented by the Premier League, Football League and Football Association.
According to the government, it will lead to “ensuring good custodians of clubs, stronger due diligence on sources of wealth and a requirement for robust financial planning”.
The suitability of Premier League’s owners’ and directors’ test has been criticised in the past, most recently following the Saudi Arabian-backed takeover of Newcastle.
Amnesty International urged the league to change the test to address human rights issues, with the Saudi state accused of human rights abuses.
A bid for Manchester United by Sheikh Jassim bin Hamad Al Thani, the chairman of one of Qatar’s biggest banks, has also raised concerns among human rights and LGBTQ+ groups.
Requirements that currently prohibit someone from becoming an owner or director of a Premier League club include criminal convictions, a ban by a sporting or professional body or breaches of key football regulations such as match-fixing.
Fairer distribution of wealth
The regulator will have backstop powers to impose a new financial settlement, which effectively means it can force the Premier League to share more money across the pyramid.
EFL chairman Rick Parry wants a 25% share of pooled broadcast revenue with the Premier League, merit-based payments across all four divisions, and the abolition of ‘parachute payments’ to teams relegated from the top flight.
But the EFL has told its clubs it is “not hopeful” of securing the settlement it is looking for.
While discussions between the bodies are ongoing, the new regulator will force arbitration if an agreement is not reached.
“The Premier League remains the envy of club competitions around the world and the government remains fully behind its continued success,” said the government.
“But in order to secure the financial sustainability of clubs at all levels, a solution led by those running the leagues and their clubs is needed, and remains the government’s preferred outcome.
“However, if the football authorities cannot reach an agreement the regulator would have targeted powers of last resort to intervene and facilitate an agreement as and when necessary.”
The Premier League has said it gives away 15% of its revenue already and in 2020 also agreed a £250m rescue package to help ease the financial challenge faced by EFL clubs as a result of the Covid-19 pandemic.
Parachute payments are solidarity payments made to help relegated sides adjust to lower revenues. Clubs receive 55% of the amount each Premier League side get as part of a share of broadcast revenue in the first year after relegation, followed by 45% in year two and 20% in year three.
The payments have been criticised for creating ‘yo-yo’ clubs and financial disparity between sides in the Championship.
Why was this move necessary?
The need for the introduction of a regulatory body in English football has divided opinion.
But its creation is seen as one of the most radical transformations of the game’s governance since Sheffield FC was formed in 1857.
Last year’s fan-led review was chaired by former sports minister Tracey Crouch following a number of high-profile crises in the sport.
The government initially promised a fan-led review in its 2019 general election manifesto after Bury were expelled from League One following the collapse of a takeover bid.
The review was brought forward as a result of the Covid-19 pandemic, which caused matches to be held behind closed doors and affected revenue, along with the failed attempt to launch a 12-team European Super League in 2021.
The review’s recommendations seek to address concerns over the financial disparity between the Premier League and the Championship, with clubs in the second tier breaching profitability and sustainability rules in attempts to gain promotion.
What has the reaction been?
UK Prime Minister Rishi Sunak said the “bold new plans” would put fans “back at the heart of football”.
“Since its inception over 165 years ago, English football has been bringing people together, providing a source of pride for communities and inspiration to millions of fans across the country,” he said.
“Yet despite the success of the sport both at home and abroad, we know that there are real challenges which threaten the stability of clubs both big and small.
“The new plans will protect the rich heritage and traditions of our much-loved clubs and safeguard the beautiful game for future generations.”
Labour welcomed the move for a independent regulator but shadow culture, media and sport secretary Lucy Powell MP said the Conservative government should have published the white paper sooner.
“Fans are desperate for a say on the future of their clubs and the game. We can afford no further delay,” she said.
“The government should urgently bring forward legislation, or take responsibility for any clubs that go under, spiral into decline or which are bought by unsuitable new owners, in the years they’ve wasted bringing the regulator.”
Kevin Miles, chief executive of the Football Supporters’ Association, said the group “warmly welcomed” the introduction of a regulator.
“The football governance white paper clearly addresses our key concerns around ownership, rogue competitions and sustainability,” Miles said.
“We support any proposals that offer fans a greater voice in the running of their clubs.”
The Premier League said it appreciated the government’s “commitment” to protecting the league’s success, but cautioned: “It is vital regulation does not damage the game or its ability to attract investment and grow interest.”
A statement added that the league would work “constructively” with stakeholders to ensure the regulator “does not lead to any unintended consequences that could affect the Premier League’s position as the most-watched football league in the world”.
Crystal Palace co-owner Steve Parish said there would be “a lot of intense detail to work out” from the proposals.
“It is unprecedented, we will be the only sporting industry to be regulated by the government,” he told BBC Newsnight.
“Of course there is a lot of fantastic broad brushstrokes in the press release and the white paper, but the devil will be in the detail.”
The English Football League said it supported the proposals around enhanced regulation.
“The EFL has been clear that the English game needs a fundamental financial reset in order make the game sustainable,” a statement read.
“The white paper represents a once-in-a-generation opportunity that must be seized to address the systemic issues that football has been unable to sort itself over the last 30 years.”
Football Association chief executive Mark Bullingham highlighted the recommendation to increase funding of the grassroots game as being an important part of football’s long-term future.
“The white paper rightly focus on ensuring our game moves forward with well-run clubs operating on a more sustainable financial footing,” Maheta Molango, chief executive of the Professional Footballers’ Association, said.
“We will work to ensure that the important mechanisms and structures that exist to protect players’ rights and conditions are properly understood and maintained as part of any future financial reforms in the game.”
Timeline
August 2019: Bury were expelled from League One following the collapse of a takeover bid.
December 2019: Conservatives promise a fan-led review in its 2019 general election manifesto in response to Bury’s demise.
2020-21 season: Covid-19 pandemic causes matches to be held behind closed doors, affecting revenue.
April 2021: A proposed European Super League, involving six Premier League clubs, collapses within days amid widespread condemnation from other clubs and players as well as governing bodies, politicians and fans.
October 2021: Amnesty International urges changes to the Premier League owners’ and directors’ test “to address human rights issues” following the Saudi Arabian-backed takeover of Newcastle United.
November 2021: An independent regulator is among 10 recommendations made by a fan-led review, chaired by former Sports Minister Tracey Crouch, on how to improve football governance.
March 2022: Chelsea owner Roman Abramovich is sanctioned by the UK government as part of its response to Russia’s invasion of Ukraine, with Abramovich selling the club to American businessman Todd Boehly in May.
November 2022: Representatives of 29 clubs write to the government urging it to press on with plans for an independent football regulator.
