Open Goal? UK Government Introduces Football Governance Bill

This week the U.K. government introduced the Football Governance Bill (“Bill”), which will see the set up of an “Independent Football Regulator” (“Regulator”). The objective of the Bill is to promote financial sustainability of clubs and leagues, and to achieve this, the Regulator will have significant enforcement powers, which include the ability to fine clubs up to 10% of turnover for non-compliance.

The Regulator will be a standalone body – independent of the U.K. government and football authorities. New owners and directors will face stronger tests enshrined in Part 4 of the current version of the Bill, which sets out how applications for new owners will be assessed. Information provided to the Regulator will have to, among other things, relate to:

1. the proposed operation of the club;
2. the estimated costs of that operation;
3. how those costs are to be funded; and
4. the source of such funding.

There will be a new licensing regime and clubs will need a licence to operate; as part of the licensing, clubs will need to meet mandatory conditions around fan engagement and consultation, corporate governance and financial reporting. 

An important feature of the Bill is that the Regulator will have backstop powers around leagues’ financial distributions, which can be triggered in accordance with Part 6 of the current version of the Bill should leagues fail to agree on a new deal.

The introduction of the Bill comes off the back of Premier League clubs receiving fines for breaching sustainability rules and following years of well-publicised takeovers of clubs by foreign consortiums.

The Bill is in its early stages and therefore subject to changes as it makes its way through Parliament. As a result, there are already questions around the operation of the Regulator (for example, around the safeguarding of its independence or how it will interact with football’s international governing bodies and their rules on prohibiting political interference in football). However, the importance of its introduction cannot be underestimated as the Regulator will be a new player in one of the U.K.’s most important and profitable markets: football.