Navigating football regulation: How the Football Governance Bill impacts clubs and fans

The landscape of English football is set for a major shift with the introduction of the Football Governance Bill. Aimed at securing the long-term health of the sport, the Bill proposes key reforms that will affect clubs across the top five tiers of English men’s football—from the Premier League down to the National League. In this article, we break down the key provisions of the Bill and what they could mean for football clubs and the passionate supporters who follow them.

The pros of the Football Governance Bill

Greater financial stability

One of the biggest changes is the creation of an Independent Football Regulator (IFR), which will introduce a licensing system, intended to ensure that clubs manage their finances responsibly. This means clubs will be required to stick to financial regulations designed to promote sustainable spending. By reducing the risk of insolvency, it aims to prevent situations like the financial crises seen with clubs such as Bury FC and Derby County.

For clubs, this shift is about ensuring financial stability over the long term. While it may bring challenges, especially in the short term, the long-term aim is a healthier financial environment for the sport as a whole.

Stronger ownership and governance

With stricter owners’ and directors’ tests, the Bill will help prevent clubs from falling into the hands of unsuitable owners. The goal is to protect clubs from financial mismanagement and ensure a more stable ownership structure. This will help foster long-term stability at the club level, allowing teams to focus on their growth and success both on and off the pitch.

Some critics are concerned that this could deter investment, particularly in the Premier League, but it’s essential to strike a balance between attracting new owners and protecting clubs from potentially damaging mismanagement.

More involvement for fans

The Bill places greater emphasis on fan involvement, requiring clubs to consult their supporters on key decisions, such as changes to club crests, home grounds, and new competition entries. This move is aimed at empowering fans and protecting the cultural identity of clubs.

For fans, this Bill offers a real opportunity to have more of a say in their club’s direction. It’s about ensuring that key decisions are made with the interests of supporters at heart, something that is often overlooked in the pursuit of financial success.

Fairer financial distribution

If the Premier League and the English Football League (EFL) can’t agree on a fair distribution of revenue, the IFR will step in to run a resolution process, initially involving mediation but ultimately potentially involving the IFR making a distribution order. This process could help to address the significant financial imbalance between the top-tier Premier League clubs and those further down the pyramid, making it easier for lower-league clubs to thrive.

The idea behind this is simple: fairer financial distribution will help clubs at all levels become more sustainable and competitive, which in turn benefits the sport as a whole.

The cons of the Football Governance Bill

Risk of reducing investment

Some have voiced concerns that the proposed regulations, especially around financial controls, could deter investors, both domestic and international. While these regulations might be necessary to safeguard the long-term health of the sport, some worry they could reduce the capital available to clubs, particularly in the Premier League.

This could have knock-on effects on competitiveness and limit Premier League clubs’ ability to attract top talent, potentially impacting their growth and success in what is currently widely regarded as the best men’s domestic league competition in the world.

Increased administrative costs

For clubs in lower divisions, the added administrative burden of compliance with the new regulations could be significant. With smaller budgets, these clubs may struggle to meet the demands of new reporting and licensing requirements, diverting resources from key areas such as player development and matchday operations.

While these measures are intended to improve financial transparency and sustainability, smaller clubs will need to carefully assess how to balance compliance with maintaining their on-the-pitch competitiveness. It’s worth noting that UEFA has run its own club licensing system for its club competitions for several years. In addition, the football national governing bodies in many countries, including Wales, have run similar licensing systems for their own domestic club competitions. These systems are viewed by many observers as being a success. England has lagged behind, principally because of the extent of the division of power between The FA (as the national governing body for football in England), the Premier League and the EFL.

Concerns over regulatory overreach

Some fear that the IFR could overstep its bounds, interfering not only with financial matters but also with the day-to-day running of clubs. The challenge will be to find a balance between effective regulation and allowing the leagues and clubs to retain operational autonomy.

Overregulation or bad regulation could potentially stifle creativity and flexibility in decision-making, something that is especially important in a sport as dynamic and competitive as football. Some critics are concerned about the lack of examples of successful UK independent regulators in other industries. They say that the likes of OFCOM (which has regulated not only TV, radio and telecommunications but also, since 2011, the Post Office), OFWAT (water) and OFGEM (energy) haven’t exactly covered themselves in glory.

Complexity and confusion around existing rules

One of the key issues with the Bill is the potential for confusion when it comes to aligning the new regulations with existing frameworks, such as the Premier League’s Profit and Sustainability Rules or UEFA’s Financial Fair Play standards. This lack of clarity could lead to compliance challenges and unnecessary complexity for clubs trying to navigate multiple layers of regulation. Both FIFA and UEFA have expressed concerns about the potential interference of the IFR in football, but The FA has been strangely accepting of the IFR, possibly because of how much power it gave away to the top clubs when the Premier League was established back in 1992.

What clubs and fans should do next

Be under no illusions, the introduction of the IFR is likely radically to alter the governance landscape in English men’s football. The FA, the Premier League and the EFL will all lose some of their tradition power base. In addition, the Bill is likely to be the start of independent regulation in English football, not the end. In time, the IFR’s remit might well be extended to include lower men’s leagues and women’s football.

As clubs begin to implement the changes outlined in the Bill, it will be vital for them to take proactive steps to ensure they’re ready for the new regulatory landscape.

Clubs should start by reviewing their governance structures and financial practices to ensure they align with the Bill’s requirements. The goal should be to adopt sustainable practices that will set the club up for long-term success.

For clubs, this is also an opportunity to engage with fans and demonstrate a commitment to transparent decision-making and they should start thinking about how they might go about this. Fans should also take this opportunity to make their voices heard—this Bill is designed to give them more influence over key decisions, but disparate fan groups might need to consider merging and improving their own governance to ensure that they can operate effectively.

Navigating the complexities of the Football Governance Bill

Our dedicated Sports team is equipped to guide clubs and stakeholders through the complexities of the Football Governance Bill. We offer strategic advice on compliance, governance, and financial planning to ensure your club thrives in this evolving regulatory landscape.