The Football Governance Bill (the Bill) has been resurrected under Labour and seeks to establish a new Independent Football Regulator (IFR) to oversee the elite men’s game in England.
The regulator will be tasked with improving the financial sustainability of clubs, ensuring financial resilience across the leagues, and protecting the English game. The Labour government set out its plans for the new Bill during the King’s Speech, with the goal of creating a more sustainable future for English football by improving stewardship and enhancing opportunities for fan involvement and oversight.
The UK Parliament held the first reading of the Bill on 24 October 2024. A previous version of the Bill was originally tabled in March by the last government but was not passed into law by the time of July’s general election. Line by line examination of the Bill began during committee stage on 27 November, with any further amendments to the Bill to be discussed on/around 2 December.
The Labour government has made several changes to the draft legislation, although most of the bill currently remains much the same as its original iteration. The changes proposed by Labour are intended to address concerns around the IFR’s independence from government, bring the treatment of parachute payments within the IFR’s scope, and formalise the role of fans in decision-making
As Culture Secretary Lisa Nandy explained, the government made some changes to the Bill “to properly redress the balance, putting fans back at the heart of the game, taking on rogue owners and crucially helping to put clubs up and down the country on a sound financial footing”.
Key changes include: a broadening of the IFR’s ‘backstop’ power, which will ensure the regulator has the right to intervene in disputes about the distribution of revenue between the leagues and the Bill will also give the IFR powers to reduce parachute payments. Clubs relegated from the Premier League currently benefit from parachute payments worth tens of millions of pounds to ensure they can cope and adjust to reduced revenues, but there is disagreement between the leagues, with the EFL arguing that such payments should be scrapped to boost competition.
In addition, IFR will no longer be required to have regard for the UK government’s foreign and trade policy in connection with any proposed new ownership, furthering the regulator’s operational independence from the UK government. Meanwhile, the Bill will compel clubs to regularly meet and consult with an organised fan group on key club matters, such as ticket prices, relocation and administration proceedings.
The Bill will effectively end the debate about whether Premier League clubs will be able to form part of any breakaway European Super League by prohibiting clubs from joining certain ‘closed shop’ competitions, with clubs breaching such restrictions at risk of losing their licence.
However, the debate about the regulator has recently raised concerns about both the future of English clubs in Europe, and the overseas ownership of English clubs by state-owned groups.
West Ham Vice Chairman, Karen Brady, has raised concerns about a letter from UEFA (the governing body of football in Europe) which warns that government interference in the sport could see domestic clubs and the national team banned from taking part in UEFA competitions. The government has said it will not do anything to jeopardise either clubs or the national team’s involvement, but there are clearly stakeholders outside UK football who will want their own concerns to be taken into account.
Meanwhile, an amendment to the Bill by Labour peer Lord Bassam of Brighton has called for a ban on state-owned clubs in English football. Teams affected would potentially include Manchester City and Newcastle United, who are effectively owned by Abu Dhabi and Saudi Arabia respectively. Whether such an amendment has any chance of making it onto the statute books remains to be seen, though it is doubtful we’ll see either club being put up for sale just yet. However, further amendments to the draft Bill should not be discounted.
The Bill is currently wending its way through the House of Lords and could become law as early as summer 2025. Football clubs need to continue preparing for the new regime, including giving due regard to the licensing conditions and corporate governance standards they will need to meet.
Clubs should consider their financial resilience and risk management plans, the suitability of officers currently in decision-making posts, the appropriateness of existing fan engagement strategies, and their EDI (equality, diversity and inclusion) action plans and reporting mechanisms, to ensure they are suitably prepared for the introduction of the new regime. This Bill could certainly become a ‘political football’!
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David Little is a Partner at Bishop & Sewell in our expert Sports Law and Corporate & Commercial teams. If you would like to contact him, please call on either 07968 027343 or, 020 7631 4141 or email: company@bishopandsewell.co.uk.
The above is accurate as at 02 December 2024. The information above may be subject to change.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.
