Out-Law News | 06 May 2022 | 10:00 am | 1 min. read
An independent regulator for football will be established in UK law, the government has confirmed, endorsing plans for an overhaul of football governance in England that were set out last year.
In line with the Crouch report’s recommendations, the government said the new regulator will be responsible for scrutinising club takeovers and the ongoing activity of directors in line with a newly configured owners’ and directors’ test, and also be tasked with overseeing the financial sustainability of clubs. The regulator will be given statutory powers to licence and sanction clubs, the government said.
Other proposals to be taken forward include the recommendation to require club owners to obtain fan consent to change matters concerning a club’s heritage – such as its name, logo, playing colours, joining an unaffiliated competition, selling the stadium or permanently relocating the club to another area.
A new model for the distribution of finances throughout the football pyramid is also envisaged under the reforms. The government has given the football authorities more time to “solve” the issue first but has hinted at regulatory ‘backstop’ powers being provided for in this area.
More detail on the plans for the new era of independent regulation of football are expected to be published in a white paper this summer.
A shift to independent regulation of football was recommended in November 2021 following publication of the fan-led review of football governance chaired by former sports minister Tracey Crouch.
The report recognised the global appeal of the Premier League brand but raised concern with the sustainability of football finances and existing corporate governance in the game. The report cited the case of Bury, which went out of business completely after running up significant financial losses, and highlighted Newcastle United, Derby County and Reading as examples where poor governance practices had been operating.
An independent study commissioned by the government, published alongside the latest announcements, flagged “serious concerns around the financial sustainability and fragility in football finances”, identified “systemic financial weaknesses in the football industry”, and warned that some clubs could go out of business.
“We are paving the way for a more sustainable, accountable and responsible future for football; one that ensures fans are front and centre of our national game,” said sports minister Nigel Huddleston in a statement delivered in parliament announcing the government’s plans for reform.
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