Government releases plans to reform governance of men’s football in England – Commentary
In a statement to the House of Commons, Sports Minister Nigel Huddleston announced that the government had approved the 10 key policy recommendations set out in its fan-led review of football governance, published by MP Tracey Crouch in November 2021 , to improve finance, sustainability and corporate governance in the national game, and to put supporters at the heart of decision-making.
The government says the regulator will be backed by primary legislation to give it statutory powers to license and sanction clubs as part of its mission to tackle the most pressing issues in the football pyramid.
The government has also released independent research it commissioned which highlights the widespread culture of clubs practicing unsustainable financial practices, placing the pursuit of success above sound financial management. This includes an over-reliance on owner funding, which can leave clubs dangerously exposed if owners decide to end cash injections. Premier League and Championship clubs now routinely exceed Union of European Football Associations guidelines on spending no more than 70% of club income on wages, resulting in weak balance sheets in the industry that would be unacceptable in any other area.
The regulator will also have powers to exercise financial oversight of clubs, including powers of information gathering, investigation and enforcement. The fan-led review recommended looking at financial distribution, including solidarity payments. The government is of the opinion that this problem should be solved in the first place by the football authorities. Further details on the government’s preferred option, including regulatory support powers, will be set out in the white paper.
The new independent regulator will also be responsible for enforcing an improved test for owners and directors, both before a club is acquired and on an ongoing basis. This will include a new “integrity test” for all owners and managers, and enhanced due diligence, including funding sources, during an acquisition. It will replace the current tests administered by the Premier League and the English Football League.
Following an outpouring of feedback as part of the fan-led review, the government also confirmed its support for the following recommendations:
- a greater role for supporters in the day-to-day management of clubs – the government will now consider mechanisms including the option of a ‘shadow board’;
- supporter engagement on club heritage issues should be subject to greater regulatory scrutiny – to ensure supporters have a greater say in changes to stadiums, logo, name and their club’s kit via a “privileged share”; and
- stronger action to improve equality and diversity on club boards across the football pyramid – this will be linked to the role of the regulator.
A white paper setting out all the details of these measures and an indicative timetable for the legislation is expected to be published in summer 2022.
For more information on this, please contact Paul Maalo from Wiggin by phone (+44 1242 224 114) or email ([email protected]). Wiggin’s website can be accessed at www.wiggin.co.uk.