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Independent regulator for men’s football in England given green light after vote by MPs

The independent regulator for men’s football in England given green light after vote by MPs – we take a look what it now means.

MPs voted by 415 to 98 to back the Football Governance Bill and put in place an independent regulator to oversee the men’s game in England’s top five divisions.

This was the third reading in the House of Commons, with it now poised to become law and will see a legislation will grant powers to a body that is independent from government and football authorities.

Meanwhile, MPs rejected a Liberal Democrat proposal which was to make at least 10 Premier League games, the Carabao Cup final, and Championship, League One, and League Two play-off finals free-to-air on TV.

The Lib Dems highlighted high subscription costs (£660/year) for watching all Premier League games, expressing disappointment at the vote.

Premier League viewership on Sky Sports and TNT Sports dropped 10% and 17%, respectively, last season. See more on that HERE.

From next season, ITV will air 10 Championship matches free-to-air.

MPs also rejected a Conservative amendment for a consultation on lifting the 1985 alcohol ban in football stands, aimed at reducing hooliganism but causing overcrowding as fans rush to drink before matches.

In a message to fans before the vote, Culture Secretary Lisa Nandy had told the Commons:  “I want to address our football fans, who are the best in the world. We are doing this for you, because for too long you have been treated as an afterthought at best, or as a nuisance at worst, in a game that is only great because of you.

“This Bill is for Macclesfield, for Wigan, for Bury, for Bolton, for Derby, for Reading, for Sheffield Wednesday, for Morecambe and for many, many more clubs that have had to endure the misery of being put last when they should have been put first.

“We promised in our manifesto that we would end years of inaction, and make the changes for which fans have fought for so long and which are so overdue.

“I am proud to be part of the winning team that have put our fans back on the pitch and at the heart of the game, where they belong.”

Football campaign group Fair Game said: “Today’s overwhelming 415 to 98 vote in favour of the Football Governance Bill marks a historic step forward for our National Game.

“This is a victory for fairness, sustainability, and the future of football.

“It’s a testament to the tireless work of Fair Game clubs who have stood up, spoken out, and demanded better.

“Their commitment to doing the right thing has helped drive this change – and now, at long last, we are firmly on the path to a fairer future for football.”

What will the Football Governance Bill do?

According to the gov.uk website, it is to establish a new Independent Football Regulator (IFR) for English men’s elite football. The IFR will be set up as a new public body to ensure its operational independence and accountability.

It will have three primary objectives. They are:

Club financial soundness- to protect and promote financial sustainability of regulated clubs, ensuring that clubs take sensible financial decisions and consider the long-term when taking risks.

Systemic financial resilience- to protect and promote the financial resilience of English football as a whole, ensuring that systemic risks and structural issues like the distribution of revenue through the pyramid are managed appropriately.

Heritage- to safeguard the traditional features of English football that matter most to the fans and local communities of clubs.

The IFR will have the following powers, as set out in the Bill:

Statutory, strengthened owners’ and directors’ tests to make sure a club’s custodians are suitable and protect fans from irresponsible owners.

The tests will consist of three key elements:

– a fitness test (owners and directors)

– a source of wealth test (owners only)

– a requirement for financial plans and resources (owners only).

Prospective owners and directors of clubs will have to undertake and pass tests before buying or joining a club. Incumbent owners and directors will not automatically be tested, but the IFR will have powers to test and remove incumbents should they be found to be unsuitable. This allows the IFR to tackle concerns about unsuitable owners and directors responsible for the financial mismanagement of clubs.

Enhanced financial regulation to improve the financial resilience of clubs across the football pyramid, ensuring that clubs take sensible financial decisions and risks are mitigated so they do not jeopardise the club’s future.

The Bill ensures that the IFR will be sighted on financial plans and step in with mitigations where it has concerns.

Clubs will be required to demonstrate sound basic financial practices; have appropriate financial resources to enable the club to meet cash flows, including in the event of a financial shock; and protect the core assets and value of the club – such as the stadium. This will prevent clubs facing cliff edge situations.

If there is a concerning level of financial risk, either at club or systemic level, the IFRwill be able to place bespoke conditions on clubs to mitigate it.

Placing fan engagement requirements on clubs and protections on club heritage.

This will require clubs to have an effective framework in place to regularly meet a representative group of fans to discuss key strategic matters at the club, and other issues of interest to supporters, including club heritage and ticket prices.

Most clubs have a strong relationship with their fans, consciously engaging them in decisions about the club’s heritage. However there have been some notable exceptions.

Regulated clubs will be required to establish that the majority of their fanbase in England and Wales are in support of any proposed material changes to club crests or emblems and home shirt colours, as well as seeking the approval of the FA if they wish to change the club’s name.

This will ensure rules introduced by the FA which are already in place for clubs in the top five leagues are maintained and adhered to. Fan engagement requirements will now also continue to apply, as far as possible, in the event that a club enters into administration to ensure better transparency with fans during the insolvency process.

Require clubs to seek approval if they propose a sale or relocation of their home ground.

The stadium a club plays in not only has significant value to fans but is often a club’s most valuable asset. The 2021 administration at Derby County highlighted the issues caused by the decision to sell the club’s stadium to a separate company owned by the club’s owner. Approval of a stadium sale will be determined on the basis of financial considerations. However any relocation must also not significantly undermine the heritage of a club, with clubs being required to consult their supporters on any proposal prior to the Regulator giving approval.

Prevent English clubs from joining breakaway or unlicensed leagues.

Fans will no longer face the prospect of their clubs signing up to damaging breakaway competitions such as the European Super League, which several Premier League clubs tried to join in 2021. The proposals for the new competition were not meritocratic, did not have the support of the fans, and threatened the heritage and financial stability of English football. The IFR will be able to prohibit such competitions.

Introduce a backstop power to intervene in the distribution of broadcast revenue where necessary (subject to certain thresholds being met).

All parties accept the current distribution of revenue across the top five divisions is not fair or sustainable, contributing to problems of financial unsustainability and having a destabilising effect on English football.

The government’s strong preference is for an industry-led solution that works for all of football. However, given the importance of distributions to financial sustainability, the IFR will have targeted powers to intervene as a last resort if football fails to reach an agreement, subject to certain thresholds being met.

Establish a ‘Football Club Corporate Governance Code’

Clubs will be required to report on their corporate governance arrangements, setting out how they are applying the code of practice that the IFR will develop in partnership with stakeholders. As part of this reporting, clubs will now be required to publish what action they are taking on equality, diversity and inclusion. This is in line with other governance codes and it is anticipated it will help improve corporate decision-making and transparency at clubs. Clubs will also now be required to report on their contribution to the economic and social well-being of their local community.

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