King's Speech details plan to create independent regulator for English football clubs

In its consultation response, the Government reiterated its view that statutory intervention is needed and shed light on how it envisages the new independent regulator would operate. In his first King's Speech as monarch on 7 November 2023, King Charles noted that legislation creating the independent regulator will be introduced with a view to safeguarding the future of football clubs for the benefit of communities and fans.

Narrow scope

The Government’s recent consultation response acknowledges that stakeholders have expressed concerns that an independent regulator would exercise influence on matters beyond its remit. To address this risk, the Government has said that legislation will restrict the independent regulator so that its role and influence will be limited to ensuring that: (1) clubs have appropriate financial and non-financial resources; (2) clubs’ decision-makers are fit and proper custodians; (3) clubs consider the interests of fans on key decisions and issues of club heritage, and; (4) clubs compete only in regulator-approved competitions. The consultation response states that an independent regulator would intervene only where there is clear evidence of market failure that risks causing harm and cannot be solved through self-regulation. The independent regulator would not be empowered to intervene in sporting matters or commercial decisions, with the Government acknowledging that leagues, the FA and clubs themselves are better placed to act on those matters. So as to ensure the independent regulator would focus on achieving financial sustainability, the Government is considering explicitly excluding some matters from the independent regulator’s remit.

Sanctions

Given the narrowed scope of the independent regulator’s powers, the consultation response confirmed that the independent regulator would not have the power to enforce sporting sanctions that would directly affect sporting outcomes (such as points deductions). Instead, these sanctions would be implemented by the existing football authorities. The independent regulator would also not have the power to require leagues to take action against clubs, with its powers limited to sharing information to assist leagues in enforcing their own rules. The consultation response also noted that the independent regulator would be unlikely to enforce financial sanctions against financially vulnerable clubs, and would be highly unlikely to revoke a club’s license.

Independence of the regulator

The Government noted that a new independent body would likely be established to house the independent regulator so as to ensure its integrity and impartiality. There is a perceived need identified in the consultation response for the regulator to be independent of existing governing bodies (such as the FA), so as to be credible and to avoid conflicts of interest. Ensuring this separation should avoid politicisation, and would follow the approach taken with regulators in other sectors, such as the Financial Conduct Authority and the Competition and Markets Authority. Legislation would protect the operational independence envisaged in the consultation response.

King’s Speech and next steps

The King’s Speech emphasised that the independent regulator will aim to safeguard the future of football clubs for the benefit of communities and fans. As the Government prepares to introduce implementing legislation, further consultation with stakeholders will continue whilst fans will wait to see the effect of the most significant regulatory change in English football for decades.