New independent regulator for English football announced in the King's Speech

The July 2024 King's Speech has provided football fans with a preview of long-awaited reforms to English professional football.

The Labour government has outlined its plans for a new Football Governance Bill, which aims to create a more sustainable future for English football by curbing excessive risk-taking and ensuring that fans have a greater say in how their clubs are run.

Future fitness and sustainability

The bill will include a range of measures designed to ensure the sustainability and future fitness of English football. Some of these measures are:

• Introducing financial regulation for football to improve club resilience. Clubs will be required to demonstrate sound financial practices and maintain appropriate financial reserves, thereby reducing the risk of financial failure.
• Creating a strengthened owners' and directors' test. This follows instances where clubs have been jeopardised by mismanagement from their owners and directors. The new test aims to protect clubs and their fans from irresponsible ownership.
• Enhancing fan involvement. The bill will establish minimum standards for fan engagement and require clubs to obtain fan approval before changing the club's badge and home shirt colours.
• Preventing clubs from joining closed-shop leagues. The bill will aim to end definitively the concept of a European Super League. The government plans to empower a new Independent Football Regulator (IFR) to prohibit certain competitions, with clubs breaching such prohibitions risking the loss of their licence.
• Establishing a 'football club corporate governance code'. The bill will mandate annual reporting on corporate governance, detailing how clubs apply the code's principles. This code will be developed in collaboration with the football industry.

New independent regulator

Perhaps the most significant change that will be introduced is the creation of a football regulator, a new and independent regulatory body designed to oversee the English professional game. The IFR is not a new concept; it was considered under the previous Conservative administration. However, the unexpected general election meant that the Conservative's bill did not progress past the committee stage.

The IFR will serve as the new watchdog for English football and is expected to wield several new powers. It will operate a licensing system, requiring regulated clubs to obtain a licence to function as professional football clubs.

The IFR will have three key objectives: ensuring that football clubs are financially sound, enhancing the overall resilience of the English football system, and safeguarding the heritage of individual clubs.

Football regulators' powers

To ensure its effectiveness in meeting these objectives, the IFR will be granted several powers.

It will have the authority to approve or reject a club's proposal to relocate or sell its stadium. It will also have the power to prohibit certain competitions, such as a European Super League, with clubs breaching such prohibitions risking the loss of their licence.

And a backstop power will allot it to intervene when authorities cannot agree and the sustainability of football is at risk, ensuring a fair financial flow between leagues.

Osborne Clarke comment

The previous Conservative government introduced a bill which would also have established an independent regulator. However, while the previous bill received cross-party support, it did not survive the general election and fell at committee stage.

This is, therefore, an area in which we may see cross-party support and the establishment of a new independent football regulator despite some of the main stakeholders having expressed contrasting views. 

Richard Masters, chief executive of the Premier League, has not commented on Labour's recent manifesto commitments but has previously expressed concerns that the Conservative's proposed reforms would "reduce our competitiveness and weaken the incredible appeal of the English game".  In stark contrast, the English Football League, which represents the Championship and League One and Two, has welcomed the proposals and described the current financial model as "broken". 

Football fans have eagerly awaited reforms to the governance of England's national game. A Football Governance Bill would follow numerous high-profile and often contentious disputes between fans and club owners. Fans will be hoping that the introduction of this legislation would pave the way for a more equitable (football) field for all.

Osborne Clarke has a track record of representing companies on high-profile competition law cases in the UK and across Europe.  If your club needs competition law advice, please contact one of our experts listed below.

This Insight was produced with the assistance of James Lister, a Solicitor Apprentice at Osborne Clarke.