English football’s new autonomous regulator will block clubs from joining a breakaway European Super League.
The UK government has approved the proposal for a regulator that was proposed by a fan-led review last year.
Preventing the demise of historic clubs is one of the objectives, along with enhancing supporter participation and implementing a new test for club owners and directors.
The significant move seeks to protect the cultural heritage of English football.
The primary objectives of the proposed new regulatory agency will be:
- Stopping English clubs from participating in closed-shop competitions, which are deemed detrimental to the national game
- Preventing a repeat of the financial failures experienced by numerous organizations, including Bury and Macclesfield.
- Introducing a more stringent owners’ and directors’ test to protect clubs and fans
- Giving supporters the ability to prevent club owners from changing a club’s name, logo, and traditional kit colors
- ensuring an equitable distribution of funds from the Premier League down the English football pyramid
“The English game remains one of the UK’s greatest cultural exports, with clubs and leagues around the globe emulating its success,” the government said before releasing its white paper on football governance, a policy document that outlines proposed legislation, on Thursday.
“Therefore, the government is currently taking the necessary and targeted measures to ensure that this continues for future generations.”
When the proposals were made in April of last year. It was believed that the Premier League was wary of a governing body.
According to the league, a regulator must not have “unintended effects” that could hurt its global appeal and success.
What will the regulator cover?
European independent divisions
Six English clubs – Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, and Tottenham – were among a dozen from across the continent that announced plans to establish a European Super League in April 2021.
It triggered a turbulent few days in English and European soccer.
Fans quickly demonstrated their anger at the plan outside English clubs’ stadiums – with similarly vitriolic protests taking place across Europe – forcing the Premier League clubs to back down and apologize.
The debate over the future of top-level European football has persisted despite the U-turn.
“The regulator will have the authority to prevent English clubs from joining new competitions if they do not satisfy predetermined criteria,” stated the government in consultation with the FA and fans.
“That criteria could include measures to prevent clubs from participating in closed-shop breakaway competitions. Such as the European Super League, which damage the domestic game.”
Financial security and fan input
As part of an application procedure, a new licensing system will require every club, from the Premier League to the National League, to demonstrate that it has a sustainable business model implemented by responsible stewards.
Without a license from the governing body, clubs will not be permitted to compete.
The regulator will also have the power to ensure that supporters have a greater say in strategic club decisions.
Owners must ask fans before changing the team’s name, crest, kit colours, or stadium.
According to the government, it will “put fans back at the center of how football is managed.”
Additional tests for shareholders and directors
The criteria for determining the suitability of English club proprietors and directors have long been scrutinized.
The governing body will add a “enhanced” test to the Premier League, Football League, and Football Association procedures.
According to the government, it will result in “ensuring effective custodians of clubs, stronger due diligence on sources of wealth. And a requirement for robust financial planning.”
The Premier League’s owners’ and directors’ factors have been criticised, most recently after the Saudi Arabia-backed takeover of Newcastle.
Amnesty International urged the league to modify the test to resolve human rights concerns, as the Saudi government has been accused of violating human rights.
Sheikh Jassim bin Hamad Al Thani, the chairman of one of Qatar’s largest banks, has submitted a bid for Manchester United, which has prompted concerns among human rights and LGBTQ+ groups.
Existing requirements that prevent someone from becoming an owner or director of a Premier League club include criminal convictions, a ban by a sporting or professional body, or violations of critical football regulations such as match-fixing.
More equitable distribution of resources
The regulator can impose a new financial settlement, forcing the Premier League to disperse more funds throughout the pyramid.
Rick Parry, chairman of the English Football League, desires a 25 percent share of aggregated broadcast revenue with the Premier League, merit-based payments across all four divisions, and the elimination of “parachute payments” to teams relegated from the top flight.
However, the EFL has informed its clubs that it is “not sanguine” of obtaining the settlement it seeks.
While negotiations between the bodies are ongoing, the new regulator will compel arbitration if an agreement cannot be reached.
“The Premier League remains the envy of club competitions worldwide, and the government remains fully behind its sustained success,” the government stated”.
To ensure the financial sustainability of clubs at all levels, however, a solution driven by the divisions and their clubs is required, and the government continues to favor this outcome.
“However, if the football authorities are unable to reach an agreement, the regulator would have targeted powers of last resort to intervene and facilitate an agreement as needed.”
The Premier League has stated that it already gives away 15% of its revenue, and in 2020 it also agreed to a £250 million rescue package to assist EFL clubs to deal with the financial difficulties caused by the Covid-19 pandemic.
Parachute payments are solidarity payments made to relegated teams to help them adapt to lower revenues. In the first year after relegation, clubs receive 55% of the amount each Premier League team receives as a share of broadcast revenue, followed by 45% in year two and 20% in year three.
The payments have been criticized for producing ‘yo-yo’ clubs and financial disparity between Championship sides.
Why was this action required?
There is disagreement over whether or not a regulatory body should be established in English football.
However, its creation is viewed as one of the most significant changes to the game’s governance since Sheffield FC’s founding in 1857.
Former sports minister Tracey Crouch led the fan-led study the year before after several high-profile crises in the sport.
After Bury was kicked out of League One due to the failure of a takeover proposal, the government initially pledged a fan-led review in its 2019 general election manifesto.
The review was accelerated due to the Covid-19 pandemic, which caused matches to be played behind closed doors and negatively impacted revenue, as well as the abortive attempt to launch a 12-team European Super League in 2021.
Concerns have been raised about the financial disparity between the Premier League and the Championship, with clubs in the second division violating profitability and sustainability rules to gain promotion.
What has been the response?
The “bold new plans” would place fans “back at the center of football,” according to UK Prime Minister Rishi Sunak.
“English football has been bringing people together since its inception more than 165 years ago, providing a source of pride for communities and inspiration to millions of fans across the country,” he said.
We are aware that there are genuine threats to the viability of clubs of all sizes. Despite the sport’s prosperity both at home and abroad.
“The new plans will preserve the illustrious history and traditions of our most beloved clubs and ensure the future of the beautiful game.”
Stuart Andrew, minister of sport, told: “There is much to be proud of in English football. It is enormously successful in many areas. But there is no denying some serious problems do exist”.
The fan-led review spent a considerable amount of time getting evidence about the experiences many fans had with their clubs and it’s evident some of them are not being managed well.
“We had assumed football would sort this problem out themselves, but frankly they haven’t.”
Labour applauded the establishment of an independent regulator, but shadow culture, media, and sport secretary Lucy Powell MP argued that the Conservative government should have released the white paper earlier.
“Fans crave a voice in the future of their organizations and the sport. We cannot afford any additional delay “She stated.
“The government should introduce legislation immediately, or assume responsibility for any clubs that fail, spiral into decline, or are acquired by unsuitable new owners in the years they’ve squandered bringing the regulator into existence.”
The Football Supporters Association’s chief executive, Kevin Miles, stated that the organization “warmly greeted” the introduction of a regulator.
Miles stated, “The football governance white paper addresses our core concerns around ownership, rogue competitions, and sustainability.”
“We support any proposals that give fans a larger say in the management of their clubs.”
The Premier League acknowledged the government’s “commitment” to preserving the league’s success, but cautioned: “It is essential that regulation does not harm the game or its ability to attract investment and grow interested.”
A statement added that the league would work “constructively” with stakeholders to ensure the regulator “does not lead to any unintended consequences that could impact the Premier League’s position as the world’s most-watched football league.”
Steve Parish, co-owner of Crystal Palace, stated that there would be “a great deal of intense detail to sort out” from the proposals.
“It is unprecedented; we will be the only sporting industry regulated by the government,” he told.
The news release and white paper have great broad outlines, but the devil is in the details.
The English Football League stated that it supported the enhanced regulation proposals.
“The EFL has made it abundantly clear that the English game requires a fundamental financial reset to be sustainable,” read a statement.
“The white paper represents a once-in-a-generation opportunity to address the systemic problems that football has been unable to resolve for the past 30 years.”
Mark Bullingham, the chief executive officer of the Football Association, cited the recommendation to increase financing for grassroots football as being crucial to the sport’s long-term viability.
Maheta Molango, chief executive of the Professional Footballers’ Association, stated, “The white paper appropriately focuses on ensuring our game advances with well-run clubs operating on a more sustainable financial footing.”
“We will work to ensure that the essential mechanisms and structures that exist to protect players’ rights and conditions are properly understood and maintained as part of any future financial reforms in the game.”
