A new independent football regulator will have powers to vet owners, scrutinize club finances and bar English teams from participating in breakaway competitions, under plans to be unveiled on Thursday by the British government.
The body, which will be enshrined in law, will aim for financial sustainability at the center of men’s football by forcing clubs to demonstrate that they have a “good business model” and “good” corporate governance to be approved in order to compete.
Before publishing the government’s football white paper, prime minister Rishi Sunak said the proposal would “put fans back at the heart of football” and “preserve” the sport for future generations.
The creation of the regulator was one of the recommendations given to the government in the Fan-Led Football Governance Review, which was published in November 2021 and was chaired by sports minister Tracey Crouch.
The review also calls for a new approach to corporate governance, improvements to equality and diversity, and greater financial regulation at clubs.
Under plans to be announced on Thursday, club owners and directors will be subject to new tests and “stronger scrutiny” of their sources of wealth.
The Premier League, which has previously argued against the need for regulators, said it “understands[d] the case for a change in football governance” but warned against any move that could erode its position as the richest football club competition.
“It is important that regulation does not harm the fans of the game who enjoy watching . . . or the ability to attract investment and increase interest in our game,” he said.
The English game is famous for its “pyramid” system, where clubs move up and down as they compete to reach the top division. But the financial gap between the top flight and the rest has led to a call from the English Football League, which opens three divisions below the top tier, for the Premier League to share more of the income with the less well-off sides.
Although the government would prefer the leagues to agree the financial distribution of Premier League revenue on their own, the watchdog will have “last resort” powers to intervene if a deal cannot be reached.
The collapse of historic clubs such as Bury in 2019 and Macclesfield Town in 2020 has led to calls for stricter sporting regulations. Other clubs, such as Derby County, have almost missed out after falling into financial trouble.
The call gained ground after the top six clubs – Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur – experimented with a wider group of European teams to form the European Super League which ended in April 2021.
The ESL version quickly collapsed after protests from fans and criticism from prime minister Boris Johnson, which led to the launch of a fan-led review.
Ministers responded to Crouch’s review in April last year, but the white paper was delayed amid government unrest triggered by the demise of the Johnson and Liz Truss premierships.
In the meantime, several leading clubs have changed hands. US investor Todd Boehly and Clearlake Capital bought Chelsea from approved Russian oligarch Roman Abramovich for £2.5 billion in May last year, while new owners have arrived at AFC Bournemouth. The Glazer family have also begun the process of exploring the sale of Manchester United.
The white paper comes less than two weeks after the Premier League accused Manchester City, the champions, of breaching financial regulations over the years. The club denies all wrongdoing.
The EFL welcomed the plan, calling it a “landmark moment for the future of our game”.
“In addition to financial reform, the League supports proposals related to better regulation and looks forward to consulting with the government on issues including club licensing, owner and director trials and heritage protection in the future,” he said. .