Yesterday, the Government published its White Paper on the reform of Football Governance in England. This follows the completion of the Independent Fan-Led Review of Football Governance, the Report into which was published at the end of 2021 (see our previous article).
The White Paper is the culmination of a process that was intended to empower football fans, but does it achieve that goal? It is clear from the Government’s proposals that the real power will lie with the new independent Regulator – an outcome that will not be welcomed by many in the game, including the fans themselves.
Independent Regulator
The White Paper adopts the controversial proposal to create an Independent Regulator for English Football and sets out the structure of a new system operated by the Regulator. All clubs in the top five tiers of English football will need a licence to operate as a professional football club. This is a marked departure from the previous system of industry self-regulation.
The White Paper accepts the proposal to impose a new, stricter owner’s and directors’ test. Owners and directors would also be required to provide business plans to the Regulator and would be subject to more rigorous due diligence in respect of the source of their wealth.
Fan engagement
The White Paper adopts some, but not all of the proposals, aimed at encouraging greater fan influence in club decision making. A minimum standard of fan engagement would be imposed on clubs as a licensing condition. The Report had proposed that the Article of Association for each club should provide for a ‘Golden Share’ which would be held by a Community Benefit Society for the benefit of the club’s supporters. This Society would have a veto right on decisions regarding certain aspects of club heritage, such as the badge or colours. Since the publication of the Report, the Football Association has introduced new rules under which a club must consult with its supporters and evidence that a majority are in favour of such decisions. The White Paper has declined to adopt the ’Golden Share’ approach proposed by the Report and will instead require that clubs comply with the new FA rules.
The Report suggested that the ‘Golden Share’ veto right should extend to the decision to join a new competition not affiliated to FIFA, UEFA, or the FA; an issue which has been much publicised following the proposed European Super League. The new FA rules do not cover the decision to join a breakaway league. The White Paper proposes to deal with this issue by imposing a licensing condition that a club may only compete in competitions approved by the Regulator.
Finances and distribution throughout the pyramid
The Report raised concerns about financial inequality across the pyramid and made proposals intended to address this. Some of the more controversial proposals, such as the introduction of a levy on transfers which would be paid by Premier League clubs and distributed amongst the lower leagues, do not initially appear to have been carried over. The White Paper prefers a football-led solution to this problem, with the Regulator granted ‘last-resort’ powers to intervene. These powers are yet to be finalised.
The last of the five proposals that we considered was the recommendation to introduce pilot programmes to allow the sale of alcohol within the sight of the pitch during matches in the National League and League Two. The White Paper does not take a definitive view on this and proposes to continue to engage with stakeholders on this issue. This attitude is in stark contrast to the position in Scotland, where the Scottish Government is currently consulting to restrict alcohol advertising and promotion at sporting events (on top of the existing ban on alcohol at football matches).
The Government will now consult with stakeholders on the proposals in the White Paper, which will inform its final proposals for legislation. This is scheduled to take place in early 2023.
For more information please contact Matt Phillip Partner and Head of Sports Law, at Matt.Phillip@shepwedd.com or Ross Simpson, Solicitor in our CDR team at Ross.Simpson@shepwedd.com.