Football club owners subject to new regulatory regime

On Friday 12 December, the Independent Football Regulator (IFR) will acquire powers under its new owners, directors and senior executives (ODSE) regime.

Following the Football Governance Act becoming law in July, the IFR will now be able to investigate current owners in the top five tiers of English football. Under its ODSE regime, the regulator will assess whether an individual demonstrates good character, including undertaking checks for criminal convictions and corruptions. It will also assess the financial soundness, and competence, of anyone seeking to own or run a football club.

The IFR will also carry out checks on funding sources and on ownership transparency, as well as test the viability of strategic plans and undertake its own due diligence, with the aim of preventing illicit finance and ensuring clubs are being soundly managed on a sustainable basis.

Read more on England’s Independent Football Regulator

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Substantial powers are at the IFR’s disposal where it deems breaches have occurred. It can impose sanctions – including financial penalties – and make public censure. In extreme cases, it will also have the power to force an owner to sell.

The change is highly relevant to football clubs, investors, and other stakeholders, given it introduces a new statutory framework for accountability and financial sustainability. Whilst league membership rules will also apply, including in respect of club finances, the IFR will be able to cast a wider net. For example, senior managers at clubs will be in-scope of its ODSE regime whereas under English Football League rules they may not.

Sports law experts at Pinsent Masons said that, for clubs like Sheffield Wednesday, which was placed in administration in the autumn after a period of ownership turmoil, the new regime has the potential to prevent similar crises arising again, through earlier intervention and enforcement of new regulatory standards.

Gabrielle Armstrong of Pinsent Masons said: “Stricter ODSE standards will hopefully promote better governance, financial stability, and integrity, which can enhance trust among fans and investors and protect clubs from reputational harm. On the flip side, clubs will be looking for consistency in how and what way applications are reviewed and decisions reached in ongoing monitoring.”

In guidance it has issued, the IFR confirmed that, in order to be able to assess the suitability of a current owner or senior manager, it must be “in possession of information” and that information must give the IFR “grounds for concern” or “grounds to suspect” that the suitability test would not be met by that individual. It said “background rumour, pure media, public or private speculation, or unfounded allegations” would not, on its own, be sufficient to trigger an investigation.

The application of the new ODSE regime will be extended in May 2026 to all prospective owners and directors. They will have to pass the ODSE test before taking control or becoming involved in English football.

From a practical perspective, clubs will have an obligation to notify the IFR as soon as there is a reasonable prospect of an individual taking a senior management function at, or becoming an owner of, a club.

Senior managers and owners will also be subject to ongoing IFR review, which could have an impact on other aspects of the new regulatory regime that the IFR will oversee.

During the IFR licence period, for example, failure to meet the ODSE standards could lead to suspension or loss of that licence, effectively barring participation in competitions. A timetable has been set for clubs to make initial licence applications next season.

Emily Steed of Pinsent Masons said: “These requirements may create short-term challenges, such as delays in obtaining a permanent licence, additional compliance conditions, and increased administrative costs, specifically for smaller clubs. This should encourage clubs to ensure that they start building their licence application well ahead of the deadline.”