the football governance bill

mind the gap: football’s growing divide

  • Europe 2012

    Each year, UEFA calculates the total revenue for each of Europe’s top divisions.

    In 2012, the Premier League was responsible for 24% of the combined revenue of the top 10 European divisions. The Bundesliga was second with 17%.

  • Europe 2023

    By 2023, the Premier League’s dominance of Europe’s revenue had grown significantly.

    A massive 31% went to the Premier League. A total that almost matched the combined revenue of the Bundesliga and La Liga.

  • UK 2007

    Every football club files its account with Companies House each year.

    Using this data, in 2007, 74% of the total revenue of the nation’s top 92 clubs went to the Premier League, and 16% to the Championship; 6% to League One and just 4% to League Two.

  • UK 2012

    By 2012, the Premier League’s share of the domestic revenue of the top 92 clubs had grown to 76% with the other divisions slipping back.

  • UK 2023

    By 2023, the Premier League domestic dominance has risen from 74% to 83%.

    At the same time, the Championship’s share had fallen from 16% to 11%, League one from 6% to 4%. And the League Two’s share had halved to just 2%.

introduction

The Football Governance Bill is making its way through parliament. The Bill will, for the first time, look to fix football’s ills and introduce a new Independent Regulator and it could be boon for local economies.

There is no doubt football is broken. Fair Game have proposed seven tweaks that would improve the Bill. The seven would address the following issues:

  • The financial divides between divisions are getting wider across the pyramid;

  • Vested interest is rife;

  • Clubs don’t have the cash to implement the proposed changes;

  • The Owners and Directors’ test is not fit for purpose;

  • The proposed State of the Game report is too infrequent;

  • Fans have little say in the protection of history and traditions of clubs; and

  • Equality standards are no more than lip service.

At the heart is a system that benefits the elite and has left the cherished football pyramid on the brink of ruin, putting the local businesses and communities that depend on their local football club at risk.

Only a Bill that fixes the economic divide can deliver the ambition of a fairer future for football and one that turns football into a force for good.

Addressing the deeply flawed financial flow in the game could see extra money flooding into the towns and cities that have lower league football clubs.

Currently 95% of the £3.2bn annual broadcast revenue stays with 26 clubs (the Premier League and parachute payment clubs) - a vast majority of which goes either into the pocket of players, transfer fees or billionaire owners.

Addressing that flow and giving more money to lower league clubs could see better stadiums, more women's teams, stronger academies and investment in community programmes. 

All of these are assets that can boost hard-hit local economies

In short, an effective football regulator is bang on the growth agenda - as long as it is right touch not light touch.

a Fairer Financial Flow in Football

Why it Matters?

There is no incentive to be a well-run club. In fact, under the current arrangement, the very opposite is true.

Each year the Premier League receives £3.2bn in media rights. They control how it is distributed throughout the pyramid. 

The Premier League's remit is to protect the interests of its stakeholders - namely the 20 owners of its clubs. They do not need to care about the wider interests of football in England.

In 2007, the Premier League introduced “Parachute Payments” a payment given annually to clubs relegated from the top flight. Since then, the financial divide within the Championship and between divisions has grown wider every year. 

Nearly every club in the Championship now spends more money on players’ wages than it gets in revenue. And a vast majority of clubs rely on an owner-benefactor just to survive - 58% of clubs in the top 92 are now technically insolvent. Clubs often prioritise the wages of a third-choice left-back over stadium improvements, community projects, or backroom staff - all of which benefit a club in the long term. 

In short, the financial flow in football is deeply flawed and does not encourage a sustainable approach.

How to fix it?

Ensuring a fairer financial flow in football is integral to the purpose of the Regulator and largely centres around the distribution of income that arises from the broadcast deal.

The mechanisms to create a fairer financial flow are being put in place by the Bill - the only missing piece of the jigsaw is connecting the dots between them.

  • The new regulator will create a new State of the Game report that will put a spotlight on the financial health of the game. The reports findings are currently for information purposes only.

  • The proposed Bill also gives “backstop powers” to the regulator if a new financial distribution deal cannot be agreed between leagues.

The solution is to add into legislation a guarantee that any proposed distribution must set out how it will address the problems raised by the State of the Game report to the satisfaction of the Regulator. And where that fails, the Regulator will have the power to impose a deal.

support for all licensed clubs

Why it matters?

The Bill does not include any guarantees that clubs will be given any assistance in transitioning to the new regime, nor in their continued compliance with its requirements. There is a particular concern that smaller clubs will face a disproportionate compliance burden.

Many football clubs at the top of the game employ hundreds of backroom staff, but that number drops off dramatically the further down the pyramid you go. Indeed, some clubs in League One and League Two operate with fewer than 30 full-time staff. In the National League, clubs are lucky to have a pool of more than five full-time staff. They all live hand to mouth, and ensuring full compliance with a raft of new regulations could take up a significant amount of time, which would impact on the club's day-to-day operations.

Without proper support, it could spell the death knell for dozens of smaller clubs.

How to fix it?

The Regulator has a duty to provide “provision” to support clubs for an extra level of reassurance, the Bill should spell out exactly what form this will take, namely:

  • financial support;

  • training; and/or

  • support staff. 

replacing bad owners

Why it matters?

The Bill introduces a new owners and directors test. It requires clubs to obtain a “determination of suitability” for new owners and directors and gives the Regulator the power to monitor the suitability of incumbent owners and directors. 

However, if the Regulator disqualifies an incumbent owner, it is not clear how the owner might be forced to sell their shares. 

It could, in the case of a difficult owner (or one who is unable to find a buyer at all – or at the right price), result in a situation where the club is unlicensed and therefore unable to participate in the competition in which it plays. 

It is also not clear how the Regulator would force a director to resign from the board of a club. When an owner or a director fails to meet the required standards, provisions must be put in place to ensure the club’s future is secure. This is not the fan-focused outcome that the Regulator is intended to seek.

How to fix it?

There are two simple changes to the Bill that will address this issue.

  1. The Regulator should ensure that clubs have sufficient reserves to meet ongoing operational costs in the event that an owner is disqualified.  This should be included in the secondary legislation/the Regulator’s rules which implement the financial plans condition in Schedule 5 to the Bill; and

  2. The Regulator should insist in its licence criteria that clubs must include a mechanism for the resignation of a director in a club’s Articles of Association in these circumstances (a Clause 43 order would be time-consuming and open to legal challenge). 

proper fan consultation

Why it matters?

The Bill itself is the direct result of the Fan-Led review, yet there are three notable areas where fans’ views are not taken into account:

  1. Disposal of a home ground (including its use as security) required the approval of the Regulator, which must be given if it would not undermine the club’s financial sustainability.  It does not require any fan consultation (section 46) or any assurance that there would still be a home ground for the club to use;

  2. Relocation of a club required regulatory approval (which must be granted if it would not undermine the financial sustainability of the club and would not cause “significant harm to the heritage of the club”) but did not require any fan consultation (section 48); and

    Changing the crest or home shirt colours required the club to “take reasonable steps to establish that the changes are supported by a majority of the club’s fans.” Changing the name required the approval of the FA but not fan approval.


How to fix it?

Adding in relocation, changing the club name or sale of the ground into areas where fans must be consulted is an easy amend to the Bill and would honour of the spirit of the Bill and recognise why it was introduced in the first place.

Other areas to consider

Frequency of the Report: It is important that the Regulator delivers the first State of the Game report while the iron is hot and that regular reviews take place to maintain its ability to bring about valuable change.  The Bill currently requires the first State of the Game Report to be published within 18 months of the Bill passing, and for all subsequent Reports to be published every five years.

Vested Interest: It is essential that the Regulator is free of any vested interests. This is the case on the board, on the expert panel and any committee established by the board. While board members will be covered by paragraph five of the Cabinet Office's Code of Conduct for members of board of public bodies and Public Law principles (which can be found here), extra assurances should be secured.

Human Rights & Modern Slavery: The Bill introduces a new owners and directors test. It requires clubs to obtain a “determination of suitability” for new owners and directors and gives the Regulator the power to monitor the suitability of incumbent owners and directors. However, the new test does not explicitly mention human rights or modern slavery.

reach YOUR MP

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📢 I’m calling on my MP [@YourMP'sHandle] to support @FairGameUK recommendations for the #IFR Bill 🏟️

  • Fair financial flow

  • Support for small clubs

  • End vested interest

  • Fan consultation

#FairGameUK #FootballReform