News & Views

Football's future - The Football Governance Act 2025

With the new season fast approaching, a change in the regulatory framework governing football in England is also moving ever closer. Men's professional football clubs will now be subject to a regime of statutory regulation, overseen by the new Independent Football Regulator.

What is happening and when?

The Football Governance Act received Royal Assent yesterday and became law. The Act which was prompted by the attempted breakaway of the European Superleague, and the financial turmoil facing many football clubs, blows the final whistle on a long running process of the draft bill being passed back and forth between the Houses of Parliament during successive governments. 

What are the proposed changes?

Independent Football Regulator (IFR)

At its heart, the Act establishes an Independent Football Regulator which will aim to ensure the financial stability and sustainability of English football, ensuring that clubs have sound corporate and financial governance in place.

The legislation contained in the Act provides only a framework with minimum requirements for the IFR to operate within. It is for the IFR to consider and develop the detail of the standards which clubs must meet, through rules and guidance that the IFR publishes. The IFR also has broad discretion to take account of the different circumstances of each club, which is expected to play out on a proportional and reasonable basis, and will vary significantly between the various divisions in the English professional game.

The IFR does not displace the role of the Premier League, the English Football League (EFL), the National League or the Football Association in regulating English football. However, the IFR and various leagues will be under duties to cooperate and consult with one another as part of the new regulatory framework.

Licensing

One of the key tools which the IFR will use in pursuit of its objectives will be a new licensing regime for clubs. Every club will need to hold a licence to be able to operate a team in any of the top five tiers of English men’s professional football. To obtain a licence, the club must satisfy the IFR that it meets its financial and corporate governance standards and fan consultation and engagement. 

Furthermore, the IFR may impose additional discretionary licence conditions on a particular club, requiring it to take further specific actions. It will be up to the clubs to determine how they meet the licence conditions imposed.

Suitable owners and directors

If any licensed club changes ownership, stringent tests are now in place to make sure that anyone looking to own or run a club is suitable, with checks on honesty, integrity and financial soundness classed as an overarching fitness test for owners and directors, as well as a source of wealth and financial plans and resources tests for owners only.

Prospective owners and directors must pass all applicable elements of these tests before they can take up a role at a club. The IFR also has the power to remove an existing owner or member of senior management within a club if suitability requirements are not met or even disqualifying them from holding such positions in any regulated club for a specified or indefinite period.

Financial distribution between the leagues

Under the measures in the new Act, the IFR will have “backstop powers” to step in and help mediate if the Premier League, EFL, and the National League can’t agree on how broadcasting revenues are shared. Practically, this is likely to be intervention as a last resort via an expert panel, and negotiation and mediation between the clubs should be undertaken prior to any imposition by the IFR.

The overall goal of the backstop powers is to result in a more equitable distribution of wealth across the football pyramid. This includes bringing “parachute payments” into the scope of the IFR’s consideration for fairer distribution. These plans look to provide the IFR with the ability to effectively safeguard the future of the game.

Heritage protection and fan engagement

Clubs will be required to have an effective framework to regularly meet and consult a representative group of fans on key strategic matters at the club, and other issues of importance to supporters, such as ticket prices. The IFR can intervene if consultation is ignored.

The IFR will also look to safeguard club heritage by approving certain key decisions taken by football clubs including joining a breakaway league, selling, or relocating a club’s home ground, going into administration, and making ‘material’ changes to club names, crests, and home shirt colours.

What will be the result? 

The planned changes by the Act seek to address longstanding financial instability in English football, a lack of transparency to the supporter bases, and an element of control over the key decision makers’ conduct within clubs. The IFR will also publish a "State of the Game" report within 18 months of the legislation being introduced, and every five years thereafter, to assess the health of English football.

The shift towards regulation will not come as a surprise to many owners and directors of clubs, however how the legislation plays out through the IFR’s rules and guidance, as well as communication with the IFR will undoubtedly lead to further twists and turns both commercially and legally for clubs. 

For further information, please email Phil Bowers or call 0151 906 1000.