The King's Speech contains the much anticipated announcement of a Football Governance Bill. This new bill, principally focused on helping ensure the financial sustainability of football clubs across England, is intended to ensure greater sustainability in the game and strengthen protections for fans.
In its background briefing to the King's Speech, the new Government intends to use this bill to deliver its manifesto commitment to introduce a new Independent Football Regulator. As a keen 5-a side player and football fan himself, the introduction of a new framework to elevate the governance and sustainability of football clubs is likely to be a reform close to the new PM's heart.
Many clubs will however, now be focused on what this new legislation and regulator could mean for them in reality. For those of us whose practice is defined by statutory frameworks which provide for strong, independent regulators; many of the themes for this new regulator and regulatory framework will resonate, but there are clearly specific issues in football which will be in focus.
So what are the key measures proposed for the regulation of football in this bill, and what might they mean in practice for English clubs?
- The King's Speech announced that the bill will propose the establishment of a new licensing system, overseen by the independent regulator. Clubs will require a licence in order to operate as professional football clubs. The new regulator will have responsibility for ensuring that individual clubs are financially sound; that the overall English football system is more financially resilient and to safeguard the heritage of individual clubs. Clubs may therefore face scrutiny at the 'licensing gateway' of their financial arrangements, with a focus on longer term sustainability. Aspects of these requirements will be familiar to those used to 'threshold conditions' in other sectors where licences or authorisations are required in order to undertake certain regulated activities. Questions remain as to whether the new regulator will have responsibility to assess financial resilience over time; and how individual club obligations in this regard will be set after the grant of a licence from the new regulator.
- Individual clubs will face ongoing regulatory requirements to improve financial resilience and intended to reduce the risk of club failure. For some clubs already facing financial pressures, and given the effects of the inflationary environment remain in sharp focus across the country affecting football clubs and their fans, many will be anxious to understand the detail here; and some may already be considering possible restructurings and other measures to stabilise balance sheets.
- There will be a new owners and directors test to make sure a club's custodians are suitable and to protect fans from irresponsible owners. These are measures which are familiar to those in other regulated sectors, such as financial services, where owners and directors (and other 'senior managers') must undergo regulatory assessments of fitness and propriety in different ways. Although the detail of these arrangements remains to be seen, it is clear that they have the potential to significantly change the shape of club ownership in England. Corporate governance of clubs is intended to be improved overall through the introduction of a new Football Club Corporate Governance Code, with clubs required annually to report on corporate governance, how they apply the Code and why that application of its principles is suitable for their circumstances.
- Amongst a number of measures to protect the position of fans, clubs will be prevented form selling a stadium or relocating without regulatory approval; and clubs will be required to meet minimum standards of fan engagement. Certain key decisions around heritage-related matters, for example to change the bade or home shirt colours, will require fan approval; and certain existing FA protections for club names will be placed on a statutory footing.
English football clubs are facing a new era of governance and regulation. Our team of sports law and regulatory practitioners can help you to prepare for what comes next.
The king's speech sees a return for the football governance bill, which the previous government could not pass before the election. Labour sources said the new bill would provide more safeguarding of club heritage and bring in rules on responsible owners.
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