Football Governance Bill Reveals Scope of English Regulator's Proposed Powers | Football politics

Proposed powers for the Independent English Football Regulator (IFR) would allow the new body to access real-time financial information from within clubs, carry out enhanced due diligence on the financial resources of new owners and oblige owners inadequate to sell their shares in case they fail. key tests.

A fuller picture of the scope and power of a regulator has begun to take shape after the government published the Football Governance Bill ahead of its first reading in parliament on Tuesday. While there is clarity around high-level ambitions, parliamentarians have yet to decide and potentially tweak many of the details.

According to the Bill, the IFR's key responsibilities are to “operate a licensing regime and monitor and enforce requirements on financial regulation, club ownership and directors, fan engagement and protection of club assets.”

The licensing regime is the central means through which the IFR will seek to assess the financial health of clubs and their commitment to the other requirements within the regulator's mandate. The financial controls will be carried out in part through a live assessment of the club's finances and its ability to “demonstrate sound core financial practices.”

In the first instance, these licenses will be provisional and will last for three years, with the regulator committing to working with clubs to ensure they meet the minimum criteria. After this period, a permanent license would be granted but could, as a final sanction, be withdrawn in the event of what is described as “persistent and willful non-compliance”.

Regarding the test applied to owners and directors, the regulator will seek to work in three stages. The first will be a traditional assessment of “integrity, honesty (and) financial soundness,” and directors will also be expected to demonstrate their competency.

The second stage will allow for “enhanced due diligence” on the source of money from potential owners to stop the use of “illicit” money to buy stakes in clubs.

The third stage would require the submission of a business plan setting out how an owner would seek to manage their club in a sustainable manner.

These tests would be applied to all potential owners and directors before they could take up their roles. Existing owners and directors would require testing as part of the licensing process, and could also be scrutinized if there were concerns they could breach the regulator's conditions. Should the test fail, the regulator would have the ultimate power to force an owner to sell or “force divestment,” while also having the ability to ban people for life.

Regarding fan engagement and club assets, clubs will need to consult with fans on a regular basis, but will not necessarily be obliged to act on their concerns. However, clubs would be expected to obtain the consent of their supporters before changing aspects of the club considered essential to its heritage, such as the crest or colours. Any plan to sell a club's land must also be approved by the regulator.

Many of the specific details of the regulator's objectives and criteria are still to be determined, including crucial measures, such as cost controls, by which clubs are expected to ensure their financial sustainability. The Bill also recognizes the possibility that the framework under which any regulator operates could be affected by future changes within the football industry, such as a fall or shift in broadcasting revenue, or the inability of clubs to get ready credit.

EFL president Rick Parry, who has been the strongest voice within English football for the creation of the regulator, called the publication of the bill a “great, great day” and said it was right that the regulator had the ability to determine its own objectives and criteria.

“I've always felt that it's a bit like the 2005 gaming law when they created the gaming commission: it sets out the principles under which the regulator will operate but gives the regulator quite a bit of leeway and discussion to make some detailed decisions. “, he said. “We have no problem with that, because after all it is an independent regulator, (it would not be) appropriate to go back to parliament to make operational decisions. Clearly life is going to be different, but we have no problem with better regulation.”