Football Shaken-Up As New Regulator Is Appointed

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Football Shaken-Up As New Regulator Is Appointed

The old grandfatherly advice is never to mix sport with politics. However, the UK Government’s recent announcement has implications for football, and it appears tired of the crises engulfing the sport which has inflicted widespread damage, ranging from the:

  • European Super League Proposal debacle,
  • Impact of the war in Ukraine on Chelsea F.C.,
  • ownership issues and takeover at Newcastle United F.C.,
  • the plight of Bury F.C. and its solvency issues, and
  • recent administration of Derby County Football Club.

Those closest to the game have campaigned for an independent regulator to govern the industry. Highlighting the case of Bury Football Club, it had somehow evaded scrutiny by not declaring its accounts to an auditor, self-audited, and inexplicablymisrepresented that it was relying upon a non-existent loan from an owner. Campaigners hope the new regulator will address similar problems.

New Announcement

The UK Government appears to be addressing the concerns raised in the ‘2021 Fan-Led Review of Football Governance: securing the game’s future as published on 24th November 2021. Campaigners seemingly would not be disappointed as the one envisaged will wield greater power, be on a statutory footing, and be non-partisan.

What Do The Influential Voices Hope To Achieve By Introducing A New Regulator?

Aligned with the November 2021 Report the UK Government aims for the newly established independent regulator to be:

  • current, agile, and creative
  • able to take difficult decisions
  • employing elite staff
  • bold enough to use the Parliamentary powers granted to it and
  • able to implement real change.

Those closest to the game hope that the new regulatory body will:

  • provide a platform for football fans to have a real say on how their clubs operate
  • support the aim of financial stability throughout football’s structure
  • develop football club corporate governance requirements which oblige proprietors and directors to be subject to an integrity test;
  • safeguard the fans from the antics of seemingly shameful owners who have short-changed the fanbase; and
  • have the power to check football club financial accounts to assess how much money is being spent in real-time.

Unanimous Support?

The catalog of problems engulfing the game has led to calls for an independent regulator and the UK Government has answered campaigners’ prayers. However, is the support unanimous? The answer is ‘no’. The Institute of Economic Affairs questioned the need for a new regulator and is ‘worried’ about the unintended consequences of the new reforms. Professor Len Shackleton believes that because the new regulator would be handed tougher powers in comparison to many successful companies which have traded beyond their means for years legitimately the new powers would be:

  • unnecessary; and
  • disproportionate.

He compared today’s critics to Norman Chester from back in 1968. Mr. Chester also railed against the enormous amounts of money spent by clubs. Professor Shackleton claimed that the 2021 Review ignored how resilient football clubs are and said clubs existed in a natural cycleobserving that 100% of the 92 clubs from 1968 survived despite their respective financial troubles. He was also concerned about the competition law implications when curtailing the amounts of money clubs are permitted to spend and will be a barrier to new clubs. Professor Shackleton also criticized the new rules for being too excessive as they will place more restrictive controls on football clubs than the comparatively lenient Financial Conduct Authority imposes on financial institutions.

The new regulator will no doubt face much criticism in the coming months and the reader should stay tuned for further developments.

The Legists Content Team

ASSESSING FIRMS

#Allen&Overy #CliffordChance #HoganLovellsLLP #NortonRoseFulbrights #Slaughter&May #WilkieFarr&Gallagher #Ashurst #Clyde&Co #Debevoise&PlimptonLLP #HerbertSmithFreehillsLLP

THE ARTICLE WAS WRITTEN USING THE FOLLOWING SOURCES

[1] Dorries, Nadine et al. – Government takes next steps towards delivering major reform od football in England – 25 April 2022 - Government takes next steps towards delivering major reform of football in England - GOV.UK (www.gov.uk)

[2] 2021 Fan-Led Review of Football Governance: securing the game’s future as published on 24th November 2021

[3] Does English Football Need an Independent Regulator? - (72) Is a football regulator necessary? - YouTube

[4] Institute for Economic Affairs – Is a football regulator necessary? - (72) Is a football regulator necessary? - YouTube

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