A Fairer Future for Football
IT CAN BE DONE!
Fair Game’s 11 Steps for a Successful Independent Football Regulator
STEP ONE:
Fairer Financial Flow in Football
A FAIRER future for football can only come with a fairer financial flow. The current system is detrimental to a vast majority of clubs below the Premier League, and has already led to the expulsion of clubs like Bury and Macclesfield from the Football League, while others like Bolton Wanderers, Derby County, and Wigan Athletic have faced financial crises.
To deliver a long-lasting culture change, Fair Game’s comprehensive research has concluded that football needs a fair financial flow that rewards well-run clubs, addresses the existing imbalance in distribution, and crucially is part of the remit for the Independent Football Regulator (IFR).
However, the Bill appears to absolve the regulator of any immediate responsibility over financial flow. Only the Premier League (PL) or the English Football League (EFL) can propose a financial deal. And only the PL or the EFL can trigger backstop powers.
It is only after the backstop has been triggered and meditation has failed that the regulator can call for further proposals and then act as an arbitrator choosing one which best meets the sustainability criteria set out by the new “State of the Game” survey.
In the final proposal stage the IFR would form a committee from its panel of independent experts. This committee would have an opportunity to set out the parameters of the proposals and the issues it expected them to address; both parties would make a final proposal. The panel would choose the proposal that was most consistent with its financial sustainability and resilience objectives whilst also taking into account the impact on investment, club competitiveness, sporting competition and the commercial interests of both parties.
Following this, the committee would make a legally enforceable order requiring the parties to comply with its decision.
This process is still focused on only two groups - the Premier League and the EFL - and ignores several key stakeholders in football and would only at the very last stage turn to its independent experts.
The EFL's voting structure is weighted heavily towards the Championship, and the National League aren't even at the table. And as for fans and the communities clubs are based in they are not even in the footnotes.
The current approach spelt out in the Bill is wrong and risks ignoring large sections of the football pyramid where financial stresses are most severely felt - the clubs that go bust or into administration are nearly always in the lower echelons of the football pyramid.
If the IFR is going to achieve its primary objectives of achieving the financial sustainability of the football pyramid, then at first glance Part Six of the Bill needs an extensive rewrite. It cannot allow the decision on football’s financial future to lie primarily with organisations who have such strong vested interests in the outcome.
The IFR should be driving fair financial flow from the centre of the pitch, not from the sidelines, and it should ensure that money goes to well-run clubs.
RECOMMENDATIONS
This can be done in four simple steps:
Ensure the IFR has full control over the financial flow in football
A "State of Play" survey accurately measures how well a club is run
Applying a fairer divisional distribution of broadcasting revenue based on average divisional attendance
Split the divisional pot according to how high a club in that division scores
Fair Game has already delivered proof of concept with its interactive Fair Game Index, which measures the top 92 clubs across four criteria (financial sustainability, good governance, fan engagement and equality standards), and 87 touchpoints.
We will advocate for the Bill to include that all clubs under the IFR’s remit must submit full accounts and provide real-time financial reporting. This is an essential step to deliver the data needed to provide early warnings of when a club is hitting “difficult times”, for example, in the case of Reading FC.
Clubs across the pyramid must also have adequate support and training to implement the changes.
Based on 21/22 Companies House accounts, 39 of the 89 clubs that filed accounts are technically insolvent (44%)
STEP TWO:
New Regulator Free of Vested Interest
FAIR GAME welcomes the introduction of an independent regulator wholeheartedly. However, it must also be free from vested interest, have the required resources, and have clearly defined powers to be effective.
In the guiding principles of the IFR, the Bill does say it “should act as transparently as reasonably practicable”, which is welcome. However, that is the only mention of transparency in the entire 130-page document.
There is no mention of “vested interest”.
Tackling vested interests must be at the heart of the IFR to ensure it has proper independence.
RECOMMENDATIONS:
This can be done by implementing Fair Game's recommendations for good regulation.
The document draws on recommended best practices from various organisations, including the OECD, the Financial Conduct Authority and the National Audit Office.
It is imperative that the Board of the IFR is free from vested interests (notably a board member should not work for an organisation that is funded mainly by either the Premier League or the EFL).
The Football Creditors Rule prioritises all football debtors when a club goes into administration. The Wayne Rooneys of this world will keep their £90k a week. Whereas the modern day butcher, baker and candlestick maker - the plumber, the caterer and the printer - may only get 1p in the pound – or nothing at all
STEP THREE:
New Governance Code for Football
ESTABLISHING a compulsory “Football Club Corporate Governance Code” is crucial to address the broken culture within our national game.
The code must include a commitment to long-term sustainability, fan engagement and equality standards, and a culture shift that embeds integrity, clear accountability, and transparency within football’s ecosystem.
The Bill stresses that every licensed club will be required to publish a corporate governance statement showing how is it applying the Corporate Governance Code of Practice (this will set out corporate governance best practice in the sport and will be published by the IFR following consultation with industry). The details of this need to be spelt out as soon as possible and support provided to clubs to be able to adjust to the new regulatory framework (a point outlined in our section on providing adequate support for clubs).
There must also be clarification on the IFR's enforcement powers to avoid rendering it toothless except in extreme circumstances, and to make it clear to fans and clubs what the consequences are for transgressions.
There will also be a new State of the Game report, which must be published within three years of IRF becoming operational. The report will include a broad assessment of the financial health, market structure and economic issues in the football industry and the scope of which will be developed by the Shadow Regulator in consultation with the football industry and fans
A Governance Code and a Code of Practice are both mentioned in the Schedules of the Bill and look promising, but will obviously need to be properly fleshed out when the IFR comes into existence.
RECOMMENDATIONS:
This can be done by fully implementing the Fair Game Governance Code for English Football found here.
The code is based on the UK Corporate Governance Code, with references to the Wates Code for Larger UK Private Companies, the Sport England Code for Sports Governance, the Charity Governance Code, the EPL Charitable Fund and EFL Trust Capability Code of Practice, the National Housing Federation Code of Governance, and the Fan-Led Review of Football Governance.
31% of the top 92 clubs in 2021/22 were spending more than they earn on players’ wages - that figure rises to 68% when you look specifically at the Championship
STEP FOUR:
There is Adequate Support to All Licensed Clubs
THE proposed changes in the Bill are essential in delivering realistic long-term sustainability to football. However, they can only come into being by ensuring the necessary support for licensed clubs.
The current IFR proposal does not include any obvious reference to support clubs in the implementation of the new rules.
There must not be any extra financial burden on clubs lower down the pyramid, particularly those that are already struggling to survive. Support must be provided by the IFR. This should come from ring-fenced funding, training and collaborative intervention.
RECOMMENDATIONS:
This can be done by ring-fencing a percentage of a club's licence fee. To ensure the burden does not disproportionately affect smaller clubs, the fee must be a percentage of revenue, not a flat rate.
Of the £3.19bn of TV revenue distributed to the top seven divisions each year, only 12% goes to clubs outside the Premier League. In the 2022/23 season, the £3.19bn was split as follows:
● 88.242% to Premier League clubs;
● 7.348% to the five clubs receiving parachute payments;
● 3.285% to the other 19 clubs in the Championship;
● 0.622% to League One clubs;
● 0.415% to League Two clubs;
● 0.058% to National League clubs;
● 0.015% to National League North clubs; and
● 0.015% to National League South clubs.
For every £1000 of TV revenue, £882 goes to Premier League clubs, £6.22 to League One clubs and just 15p to National League South sides
STEP FIVE:
A New Owners’ and Directors’ Test
THE Bill is especially strong when it comes to a new Owners and Directors’ Test, particularly over the issue of criminality. Football owners and directors should be pillars of our society and role models for their communities.
The Bill actually spells out three different tests. And the IFR will have powers to test and remove incumbents should they be found to be unsuitable.
A fitness test (owners and directors) to assess an individual’s integrity, honesty, financial soundness and, in the case of directors, competence, to ensure they are a suitable custodian to run or own a football club. This draws on similar ‘fit and proper persons’ tests applied by other regulators including the Financial Conduct Authority (FCA), HMRC, and the Solicitors Regulation Authority.
A source of wealth test (owners) to mitigate against the risk of illicit finance in football and ensure the financial sustainability of clubs and the pyramid.
To ensure the financial sustainability of clubs, prospective owners must have sufficient financial resources. They must also provide the IFR with their proposed plan to operate the club, an estimate for those costs, how those costs will be funded and the source of such funding.
The first of these tests is the most interesting when it comes to issues around criminality, ethics and human rights. The proposed fitness test appears to address most of those concerns. It lists the following as requirements for an owner or a director:
has the requisite honesty and integrity;
has the requisite competence, and whether, on the balance of probabilities, the individual has engaged in conduct outside England and Wales which would, if done in England and Wales, amount to the commission of a serious offence;
whether the individual is or has been a party to proceedings (other than criminal proceedings) in any court or tribunal;
any action of a regulatory or disciplinary nature that is being or has been taken in relation to the individual (whether or not by the IFR and whether or not in England and Wales);
whether the individual is prohibited from entering the United Kingdom;
whether the individual is a designated person as defined by section 9(2) of the Sanctions and Anti-Money Laundering Act 2018;
such other matters relating to honesty and integrity as may be specified for the purposes of this paragraph in rules made by the IFR.
All the above are welcome and must be made clear and transparent in the test.
However, the Bill also makes reference to the IFR having "regard to the foreign and trade objectives" of the Government. To ensure the sustainability of football clubs is protected, the Bill must, therefore, also explicitly rule out state-ownership of football clubs which would instantly become vulnerable to the whims of the Government of the day. The alternative would be to remove the clause entirely.
The other question mark is over the level of transparency of the process.
The IFR needs to tighten up the proposals in the Bill and ensure they are more transparent.
RECOMMENDATIONS:
This can be done by implementing the recommendations from our manifesto document found here, including the following:
The process must be completely transparent and reviewed annually.
Sources of funding must also be made fully public and transparent.
The focus of the test must extend beyond financial behaviour to encompass ethics and human rights. After all, football club owners are role models.
Anyone committing what would be deemed a serious criminal offence under English law should be barred from being an owner or director of a football club in the English football pyramid. Crucially, this must include offences committed overseas.
Serious consideration should also be given to Amnesty International’s proposed amendments to the Owners and Directors’ Test. The Bill must also explicitly rule out state-ownership of football clubs.
Since the start of the Premier League, there have been 64 incidents of clubs in the top four divisions going into administration
STEP SIX:
Protection of Club Heritage
A COMMITMENT to setting a minimum standard for fan engagement and requiring majority fan support for changes to club heritage is essential.
At the centre of the original fan-led review was the need to ensure fans have the final say over a club’s heritage. Here the Bill is mixed.
The Bill states that the third objective of the regulator is heritage, stating that it will “safeguard the traditional features of English football that matter most to the fans and local communities of clubs”.
However, while it prohibits regulated clubs from making any material changes “to the crest or predominant home shirt colours of a relevant team operated by the club unless the club has taken reasonable steps to establish that the changes are supported by a majority of the club’s fans in England and Wales”, when it comes to changing the club’s name, that is an issue for the Football Association, with no mention of fan consultation. This needs to be rectified.
RECOMMENDATIONS:
This can be done by ensuring the IFR has the power to protect a club's badge, name, and home shirt colours, with recognised fan groups having the power of veto over any changes.
These powers should be enshrined in individual club's articles of association as part of a club's licence.
In 2012 the owners of Cardiff City, the Bluebirds, changed the club colours to red. And in 2013 Hull City’s owners looked to rename the club Hull City Tigers. Both came without consulting fans
STEP SEVEN:
Addressing “The Wimbledon Clause”
THE IFR must have powers to approve any sale or relocation of a stadium to stop a repeat of the situation at Derby County and the relocation of Wimbledon FC to a town in Buckinghamshire — and crucially, the fans must have the final say.
There are still concerns over whether this has been adequately addressed.
The Bill states that a club can only be moved if the IFR is confident that a move:
(a) would not undermine the financial sustainability of the club, and;
(b) would not cause significant harm to the heritage of the club.
The question is how do they judge? When Wimbledon were relocated the decision was taken by an independent three-man commission with no veto from the supporter base. This ambiguity must be addressed otherwise the unpalatable Wimbledon scenario could be repeated.
RECOMMENDATIONS:
This can be done by ensuring the IFR has the power to ensure designated fan groups have the final say. This should also be enshrined in a club’s articles of association as part of their licence.
In September 2003, Wimbledon FC was relocated to Milton Keynes in Buckinghamshire, 56 miles from its long-standing base in South London.
STEP EIGHT:
No to a European Super League
THE Bill prevents clubs from joining breakaway leagues, such as the recently proposed European Super League. This aligns with Fair Game's principle of protecting the football pyramid's integrity and ensuring competitiveness across all levels.
The Bill states that clubs must “not play in breakaway competitions that have been prohibited by the IFR” to obtain a provisional operating licence
It is essential that this is not watered down as the Bill progresses through parliament.
In 2021, the owners of Arsenal, Chelsea, Liverpool, Manchester United, Manchester City and Tottenham Hotspur agreed to join a 12-strong European Super League
STEP NINE:
Top Seven Divisions Covered
THE IFR must recognise the historical importance of clubs beyond the top five divisions. The current iteration of the Bill fails to adequately protect the National Leagues North and South, leaving our grassroots game without the protections it deserves.
At the moment the regime is intended to only cover clubs in the top five tiers of English men’s football.
However, it goes on to state that only clubs competing in competitions specified by the Secretary of State in secondary legislation will need a licence. At present, the intention is that the Secretary of State will specify only the Premier League, EFL Championship, League One and League Two, and the National League.
RECOMMENDATIONS
This can be done by stating in secondary legislation that the IFR’s remit oversees all men's professional clubs down to National League North and South.
In the 2022/23 season, each weekend 890,944 people watched football in the top seven divisions of the English men’s football pyramid, of which:
● 45.16% went to a Premier League match;
● 6.57% to a Championship match hosted by a club receiving parachute payments;
● 18.89% to other Championship matches;
● 14.31% to a League One match;
● 7.81% to a League Two match;
● 4.60% to a National League match;
● 1.45% to a National League North match; and
● 1.20% to a National League South match.
More people will watch a National League match each weekend, than attend a Chelsea home game at Stamford Bridge
STEP TEN:
Include Equality, Diversity and Inclusion
THE modern landscape of football requires a strong commitment to inclusivity at all levels. Integrating EDI into the regulatory framework ensures that football clubs reflect the diversity of their fan base and leverage the wide range of perspectives for better decision-making and community engagement.
Fair Game’s 22-page report, The Gender Divide That Fails Football’s Bottom Line: The Commercial Case for Gender Equality, spelt out explicitly both the moral and financial reasons for why the IFR must have the powers to hold clubs to account for their failings in Equality Standards.
Key points include the positive impact of board diversity on financial performance. Additionally, enhancing gender equality can significantly increase female fan attendance and engagement. Women's football is also rapidly growing, presenting significant commercial opportunities, and the rise in women’s sports sponsorship reflects changing sponsor attitudes.
Equality standards are not explicitly mentioned in the Bill but it is essential that it is part of football’s governance going forward.
RECOMMENDATIONS
This can be done by ensuring EDI is part of the Regulator’s remit, and is included in both the Governance Code and the “State of Game” report. This can arguably be achieved under the first draft of the Bill.
The Bill states that the State of Game report should include:
an overview of the main issues that the IFR considers to be affecting English football;
an assessment of whether any feature, or combination of features, of English football jeopardises, or risks jeopardising, the IFR’s ability to advance one or more of its objectives; and
information about any other matters relating to the state of English football, so far as relevant to the exercise of the IFR’s functions under this Act, that the IFR considers appropriate
In addition, the Bill also says that the IFR “must have regard to the most recent football governance statement published by the Secretary of State,” and the statement “may not contain any policies that are inconsistent with the purpose of this Act or with the IFR’s objectives.”
The first objective of the Bill is, Club financial soundness - to protect and promote financial sustainability of individual clubs, ensuring that clubs take sensible financial decisions and consider the long-term when taking risks.
Our research clearly states that both equality standards and environmental sustainability should be an essential part of making sensible financial decisions and particularly when considering the long-term sustainability of the game.
In the first football governance statement after the next General Election, the new Secretary of State must spell out that measures on equality standard and environmental sustainability have to be included in the State of Game report.
In the Fair Game Index, of a maximum score of 100, Lincoln City finish first on equality standards, scoring 6.54 out of 10. Huddersfield Town are second with 6.50 and Southampton third with 6.25
STEP ELEVEN:
Environmental Sustainability
IN LIGHT of global environmental challenges, integrating sustainability into the football industry is an ethical choice and a strategic necessity.
The Government has firm commitments to making the nation carbon neutral, and there are also increasing funding streams that support clubs going “green”, which will allow them to become financially sustainable in the long term.
The IFR should enforce standards for environmental management, encouraging clubs to adopt green practices.
RECOMMENDATIONS
This can be done by ensuring the IFR can enforce standards for environmental management as part of its remit. As mentioned above with Equality Standards, this can be achieved by ensuring that an incoming Secretary of State explicitly calls for environmental sustainability to be included in the State of Game report.
Football as an industry needs to work hard on sustainability. Shrewsbury Town's annual energy bill alone is a whopping £180,000 a year
To Summarise
The changes proposed by Fair Game are not only possible but essential for the sustainable and ethical future of English Football.
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Stronger backstops for fair financial flow
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