IREF enters extra time

As expected, the Government announced plans in the #KingsSpeech today to introduce a new Independent Football Regulator via the #FootballGovernanceBill. According to a DCMS briefing note, “the Regulator will address systemic financial issues in football while providing the certainty and sustainability required to drive future investment and growth”.

The proposed content of the Bill largely follows the expectations set by the Government in its recent consultation response, but we await the publication of the Bill itself and potential amendments in Parliament in order to understand the final content. One point of note relates to the financial settlement between leagues. The Government will have the power to intervene on financial settlements, particularly over TV revenues, but will only do so in extremis and the focus remains very much on a voluntary agreement between the EFL, Premier League, and broadcasters being reached.

?The Bill will:

• Establish a new independent regulator for English football clubs to address issues of financial sustainability and ensure fans' voices are listened to: By operating a licensing system for clubs in the top five tiers of the men’s English football pyramid By giving the Regulator powers to monitor and enforce compliance with financial regulation requirements, corporate governance, owners & directors tests, fan engagement, club heritage protections, and approved competitions.
• Create a new and strengthen owners’ and directors’ test.
• Set minimum standards of fan engagement. This will require the support of a majority of fans for chances to club names, badges, or home shirt colours.
• Require clubs to seek approval for the sale or relocation of a stadium. Including demonstrating fan engagement prior to approval being sought.
• Prevent clubs from joining “breakaway or unlicensed leagues”.
• Intervening “as a last resort” to ensure financial sustainability through the redistribution of broadcast revenue.
• Establish a compulsory Football Club Corporate Governance Code.

The bill will technically apply to England and Wales, but the regulator will only focus on the top five tiers of the English football pyramid. It will not apply in Scotland nor Northern Ireland.

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There are no further announcements at this stage in terms of timings to introduce the legislation. The key question remains the date of the general election, which must take place no later than January 2025. Speculation on when an election might be held has focused on either May 2024, to coincide with local elections, or a date in the Autumn (potentially in October). If the Bill has not passed by the time Parliament dissolves for the election, the legislative process would need to start again afterwards – there is no mechanism to pause the Bill and continue its passage after the election. This would lead to further delays, particularly if an incoming Labour government chose to either change the proposals and consult again or to not introduce the Bill as a priority in its first year in office.

That being said, there is likely to be broad political support for the legislation. The Opposition will no doubt seek to amend the Bill to strengthen the regime, but are unlikely to attempt to stop it passing. This should help to speed the passage of the legislation, should it be introduced in a timely manner.?

The second outstanding question is whether the Government will provide for the establishment of a “Shadow Regulator”. This would see the regulator being established in a temporary format, hiring staff and beginning preparatory work for the new regime before it legally comes into force. The government indicated earlier this year that this would only be possible after the second reading of the Bill (the first formal debate on the principles of the legislation in Parliament). Should a shadow regulator be established, it would not have legal powers to intervene but could choose to try and publicly or privately exert pressure where it feels clubs are in breach of the spirit of the proposed regime. The shadow regulator would also likely start to conduct some stakeholder engagement with Clubs and leagues in order to prepare for regulation to begin.

The legislation has been welcomed by Dame Caroline Dinenage MP, the Chair of the House of Commons Culture, Media and Sport Select Committee. She called for the establishment of a shadow regulator by the end of the year, and for a voluntary revenue sharing deal to be reached as soon as possible.

The final shape of the regulator, and what powers and teeth it will have, will no doubt be fiercely debated in the months to come -but the principle of the regulator should be welcomed by the electors of Bury, Scunthorpe, Southend and countless other towns with EFL clubs at their heart, in a General Election year.

#IREF #footballgovernance With thanks to. Rob Fuller