During The King's Speech 2023, delivered on Tuesday, 7 November, King Charles III declared that ‘[l]egislation will be brought forward to safeguard the future of football clubs for the benefit of communities and fans'.
The Football Governance Bill (the Bill) was confirmed in the Speech's background briefing notes.
The history of the Bill dates back to the Conservative Party's 2019 manifesto promise to ‘set up a fan-led review of football governance, which will include consideration of the Owners and Directors Test'.
Indeed, we discussed this test in our recent blog on Everton Football Club's proposed takeover.
The outcome of this fan-led review included the recommendation that the government ought to devise a new, independent regulator for English football in order to secure the sport's long-term sustainability.
In February 2023, the government released its white paper -“A sustainable future – reforming club football governance”, which put forward its commitment to introduce the Regulator and detailed its duties and powers.
What changes will be made to the Independent Football Regulator?
The briefing notes accompanying the King's Speech set out various details surrounding the introduction of an Independent Football Regulator.
Broadly, the notes state that ‘[t]he Regulator will have powers to monitor and enforce compliance with requirements in financial regulation; corporate governance; club ownership (Owners' and Directors' tests); fan engagement and club heritage protection; and approved competitions.'
More specifically, the Regulator will:
- Manage a system which requires every club in English football's top five tiers to hold a license in order to actually run as a professional club.
- Establish a fresh and ‘strengthened' Owners' and Directors' test.
- Introduce a mandatory, minimum level of fan engagement for clubs and require the approval of a majority of fans for any amendments to a club's badge, name or home shirt colours.
- Require clubs to not only ask for permission in order to sell or relocate their stadium but also show how they have consulted fans as part of the process.
- Prohibit clubs from becoming part of breakaway or unlicensed leagues.
- Have the ability to preserve financial sustainability via the redistribution of broadcast income (as a last resort).
- Create a mandatory ‘Football Club Corporate Governance Code'. Accordingly, football clubs will need to report each year on corporate governance, establishing how they implement the Code's principles and why this is appropriate for their state of affairs.
What is next for the Independent Football Regulator?
Dame Caroline Dinenage MP, Chair of the Culture, Media and Sport Committee (DCMS), has stated that ‘[n]ow the Government is committed to establishing the Independent Football Regulator, it should get on with setting it up in shadow form by the end of the year'.
Nonetheless, the government is aware that some stakeholders are not only concerned about potential reforms but also question the need for reform and conceded as such in its consultation response in September 2023.
Going forward, stakeholders will no doubt still have a role to play in shaping the impending legislation.
For example, in his response to the King's Speech, the Chair of the English Football League, Rick Parry, noted that ‘[w]e have had many months of detailed engagement with DCMS and will continue to play our part in delivering legislation that is both fair and effective'.
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