The updated Football Governance Bill: what’s changed and what’s next?

The latest iteration of the Football Governance Bill (Bill) was published by the Government on 23 October 2024, and is currently being debated in the House of Lords. Much like the previous draft, the Bill aims to address the challenges facing English football clubs. Below we discuss the Bill’s journey and content, focusing on the key changes within the latest version. 

The unfortunate collapse of clubs like Bury and Macclesfield highlighted the urgent need for reform within English football. The Conservative Government’s Football Governance Bill, introduced in March 2024, proposed the establishment of an Independent Football Regulator (IFR). The IFR is intended to oversee the financial sustainability of clubs, ensuring that they are run in a manner that promotes their long term viability. 

Following the 2024 general election, the new Labour Government reintroduced an amended version of the Bill in October 2024, with strengthened provisions reflecting a commitment to empower fans and improve transparency in football governance. The Bill builds upon the framework established by the first iteration of the Bill, but also introduces several enhancements. Notable differences in the new Bill include:

Enhanced fan engagement

While the previous Bill acknowledged the importance of fans, it didn't mandate direct consultation on club decisions. The new Bill places a stronger emphasis on ensuring that the views of fans are considered, which includes mandating “effective engagement” with a representative group of supporters. The Bill specifies that when making decisions on the club’s strategic direction and priorities, ticket pricing, home shirt colours, as well as any proposals to relocate home grounds, fans must be consulted in a meaningful way. The aim of this is to ensure that the voices of supporters are heard and considered, and that this is particularly the case when it comes to important decisions that fans are likely to have strong views on. Fan-consultation is already required by the Premier League’s Fan Engagement Standard, however for clubs who haven't recently played within the Premier League, this is a new obligation. Such clubs are likely to now formally constitute fan advisory boards to ensure they have a framework in place to comply with the new fan engagement requirement.

Independence of the IFR

Notably, the requirement for the IFR to consider government foreign and trade policy when deciding whether or not to approve club takeovers has been removed from the new Bill. This allows the IFR to operate independently and, in theory, free from undue political intervention. This change is likely to have been a response to UEFA’s concerns that the introduction of the IFR could bring about government interference into football. UEFA had even threatened to ban English clubs, and the England national team, from their competitions unless the Bill was substantively changed in this regard.

Revenue distribution & parachute payments

The IFR will have backstop powers to ensure an agreement is reached regarding the distribution of revenue between the competition organisers in professional English football. Such an agreement would cover broadcasting revenue received by the Premier League. Under the previous Bill, parachute payments (being payments made to clubs recently relegated from the Premier League designed to help alleviate the financial impact of no longer playing within the Premier League) were excluded from the remit of the IFR’s backstop, but this has now changed. The Bill now permits all relevant revenue to be considered by the IFR as it seeks to fulfil its objective to promote financial soundness within the sport.

The following is a brief summary of some of the key features of the Bill:

1. Establishment of the IFR: The IFR will be tasked with regulating football clubs in England. The IFR will be responsible for overseeing club operations and governance, ensuring that financial practices are sound and that clubs are managed responsibly ensuring their financial resilience, and protecting the long term future of the sport.
2. Licensing regime: The Bill introduces a club licensing regime whereby the IFR will be the grantor of licences to clubs. Following a transitional period of three season, clubs must hold a full licence to operate a relevant team and therefore participate in competitions. To be granted a licence, clubs will need to demonstrate that they meet specific financial and operational standards.
3. Suitability of owners and directors: The Bill includes provisions for assessing the suitability of owners and directors of clubs. This includes background checks to ensure they meet honesty, integrity, and financial soundness criteria. The IFR will have the power to disqualify individuals deemed unsuitable from holding positions within English clubs. For the first time in English football, there will be a test of the competency of directors.
4. Reporting to the IFR: Clubs will be required to publish regular reports on their financial health (including undergoing regular audits and mandatory financial disclosure) and governance practices, thereby promoting transparency within the sport. Clubs will also have a duty to notify the IFR of any significant changes, and gain IFR pre-approval on decisions such as a sale or relocation of their stadium. The new Bill also now requires clubs to report on and publish information about the actions they are taking in relation to equality, diversity and inclusion.
5. Sanctions and enforcement: The Bill outlines a framework for sanctions against clubs or individuals who fail to comply with the regulations, including then power to conduct a “dawn raid”, impose financial penalties and ultimately revoke or suspend the operating license required to compete in English football competitions.

The Football Governance Bill is a significant development in the structural oversight of English football, and reforming the governance of football in the country. By requiring enhanced transparency and accountability, and empowering fans by increasing their involvement, the Bill seeks to create a more sustainable and equitable future for the sport.

The Bill is currently continuing its progress through the House of Lords and has yet to be debated in the House of Commons. As it progresses though Parliament, the debate surrounding the future of football governance will undoubtedly continue, with fans, clubs, politicians, international bodies and other stakeholders all playing a role in shaping the outcome.

We will be watching eagerly to monitor further developments to the Bill and are prepared to advise clubs on what they can do to get ready for the changes the Bill will bring.

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