The Football Governance Act
Date: 25th November 2024
Re: Football Governance Bill Review And The Consequences Of It
Analysis: The Football Governance Act is now law, having received Royal Assent following a tumultuous legislative journey. The bill would create an independent football regulator with the ability to intervene in the financial and governance structures of the sport to try to safeguard its clubs and bring more fairness to the distribution of money. Even though the regulator isn’t yet fully up and running, the shadow regulator is, and there is a mood of optimism that the biggest substantive to, such as the redistribution of finance from the Premier League to the EFL, can be sorted without having to be imposed upon.
Key Themes and Important Information:
- Passage into Law:
And the “Football Governance Bill” is now the “Football Governance Act”, following Royal Assent (the King’s signature) and formal recognition by both the House of Lords and House of Commons.
It’s the result of a “nearly five-year” legislative journey.
- Driving Forces Behind the Legislation:
Source of the Act The Act is largely a response to the fan-led review of football governance by Dame Tracy Crouch, which was commissioned in 2020 and concluded towards the end of 2021.
Three events had precipitated the review:
Threat of a breakaway: This highlighted the necessity of enhanced protection for fans, as well as more oversight over club decision-making.
Bury FC failure (2019) – The club’s ejection from the EFL and the subsequent administration brought the increasingly fragile financial state of the pyramid to the public eye in no uncertain terms.
And the financial and non-financial implications of the COVID-19 pandemic: This was another reminder of the financial vulnerability a lot of clubs are in.
The review had “morphed into many many other things” with significant input from football stakeholders, he said. - The Independent Football Regulator doesn’t have to:
The Act’s centrepiece is the creation of a football regulator independent of government.
Key Functions: Enhanced protection for the game and fans: This entails “more of a say over club badges [and] more of a say in the running of their clubs.”
Financial distribution intervention. The regulator will be handed a “backstop power” about being able to intervene in “the key area of financial distribution” if the Premier League and the EFL cannot agree on a valuing framework for monetary distribution.
Status of the Regulator in Practice: The independent regulator is still not operational. There is a “favoured candidate, a fellow called David Kogan”, who has been “grilled by members of parliament”.
A shadow regulator has been in place to ready the office to open for business immediately upon the appointment of a full regulator, since January.
- The Premier League and EFL Financial Dispute:
This is described as one of the “biggest things” that the regulator might have to tackle.
There’s been a long, back-and-forth two and throw between the Premier League and the EFL about a revenue stream that goes down the football pyramid.
Culture, media and sport secretary, Lisa Nandy, is still “very positive and hopeful that a deal is on its way without any necessity for the regulator’s intervention.
“But if there isn’t that agreement, then in the future the fans will have a backstop, there will be someone there who can step in and say we need to act, we need to take a view about a fairer financial distribution in English football, and then we need to make sure that gets implemented.”
Discussions between the leagues are considered “challenging” and “difficult” but “progressing.” - Hopes and Concerns for the Regulator:
“Light touch” approach: A combination of the regulator needing to be “light touch” and not to interfere too much (especially with the power of the Premier League), and the ‘hands on’ in the money-spinning sport of Boxing.
Protecting the “global product”: Concerns include the fact that over-regulation could “damage what is not only a national treasure but is a huge global product for UK plc,” perhaps slashing the billions of pounds it rakes in.
Striking a balance between protection and growth: The Act aims to “protect the Premier League but also protect all the other clubs.”
The precise effect and operation of the regulator, we won’t know exactly how that will work until it’s in place.
- Immediate and Future Implications:
Automatic: The Act’s enactment is not a trigger for immediate action. The governor has not been installed.
Coming soon: Owners and directors tests could be applied “relatively quickly.”
Future: The “backstop power” for finance distribution can’t physically happen overnight.
The hope is that football can “step up, come together and reach its agreement” and thereby escape the regulator’s intervention. - Specific Club Welfare:
The Act provides hope for clubs under financial strain. And when queried “Is it too late for Borham”(presumably a club in distress), Lisa Nandy replied “Certainly not,” raising a suggestion that stricken clubs may receive support.
.
