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9 September 2025

Regulating The Beautiful Game: The Football Governance Act

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Herbert Smith Freehills Kramer LLP

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The familiar black and white stripes of Newcastle United, the robin crest of Bristol City and the gleaming white trusses of the Emirates Stadium.
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The familiar black and white stripes of Newcastle United, the robin crest of Bristol City and the gleaming white trusses of the Emirates Stadium. All these features of the cultural sporting inheritance of the United Kingdom are now protected by legislation, as the Football Governance Act (the Act) has been passed. The Act represents the latest step in a sequence of events dating back to the suggestion that some English clubs may join a breakaway European Super League, with some of the most successful European sides. The proposals did not feature promotion or relegation, and fans protested. A white paper on the future of the game followed, and after that an initial bill was put forward by the then Conservative government. That bill was not passed before Parliament dissolved for the 2024 General Election, but the majority of the proposals were supported by Labour, and the Football Governance Act has now been passed.

The regime is now getting started with the recent launch of multiple consultations on various issues, including information gathering, enforcement and sanctions. It will be vital for those potentially affected to consider and respond to relevant consultations to ensure their voices are heard and can help to shape how the Act is applied going forwards.

In this post, we recap nine key features of the Act:

  1. Establishment of the Independent Football Regulator (IFR)

The Act formally establishes the IFR as the first independent regulator for English football. Prior to its formal establishment, a shadow football regulator was working while the Bill was passed. The impact assessment for the Act placed an emphasis on the fact that, as elite men's football in England had generally been self-regulating since the establishment of the Premier League, there was a risk of regulatory capture. The Act sets out the objectives of the IFR, which are:

  • To protect and promote the financial soundness of regulated clubs;
  • To protect and promote the financial resilience of English football as a whole; and
  • To safeguard the heritage of English football.

The IFR also has a number of secondary objectives, as follows:

  • Sporting competition;
  • The competitiveness of regulated clubs (including against overseas rivals); and
  • Growth of and investment into English football.

The IFR will make decisions on whether to grant operating licences to clubs (see below on the licensing regime).

2. Scope

The proposals mainly apply to clubs and leagues operating in the top five levels of the men's football pyramid in England. Women's football has been undergoing a separate process of reform, focused on the recommendations of an independent review conducted by Karen Carney. That review has, among other things, led to the top two tiers of the women's club pyramid (the Women's Super League and the Women's Championship) moving from the FA's ownership to being owned by the participating clubs themselves (similar to the men's Premier League).

3. Licensing regime for clubs in scope

The Act establishes a licensing regime for in scope clubs. Clubs will initially be able to operate with a provisional licence, which is intended as a transitional regime to allow clubs time in order to meet the conditions required for a full operating licence. The transitional provisions will last three years (although this can be extended by the IFR), with the expectation that clubs will have met the criteria for a full licence by the end of that initial three-year period. There are mandatory licence conditions, which apply to all clubs, and threshold licence conditions which set the conditions for clubs to move from provisional to full licences. The IFR also has the power to impose bespoke licence conditions on clubs where, in its opinion, a provisionally licensed club will not meet the threshold requirements by the end of the provisional period, or a fully licensed club is not meeting the threshold requirements. Some of the key requirements for a full licence relate to appropriate financial resources, appropriate non-financial resources (including for risk management) and requirements for fan engagement.

4. The owners' and directors' test

The IFR will operate owners' and directors' suitability tests, similar to the regimes operated by other regulators such as the FCA and the SRA. The tests will apply to all prospective new directors and owners, but will only be applied to incumbent directors and owners where the IFR has grounds for concern about the individual's suitability. The tests comprise:

  • Fitness tests for owners and directors to assess their honesty, integrity, financial soundness and, for directors only, their competence;
  • Source of wealth checks for owners; and
  • Prospective owners will also be subject to tests to assess whether they have sufficient financial resources. They must also supply the IFR with a proposed operating plan for the club, including the costs of that plan, and an explanation of how those costs will be funded and the source of funding.

Incumbent owners will not be tested on their financial resources or required to provide such a plan. The IFR's first decisions on the suitability of owners and directors will be keenly watched by the industry in order to get a sense of how the new regulator is applying these tests.

5. New duties for clubs and competition organisers

The Act contains a number of new duties for clubs and competition organisers. Perhaps the most high-profile of these relates to the incident that set this series of developments in motion, the possibility that a number of elite men's clubs may join a breakaway European Super League. Regulated clubs, and clubs that have been regulated within the past ten years, cannot participate in prohibited competitions. Prohibited competitions are specified by the IFR, according to criteria which include:

  • Whether the competition would harm the heritage of English football;
  • Whether it would jeopardise the sustainability of other English competitions and clubs in those competitions; and
  • Whether the competition would be fair and meritocratic.

Regulated clubs are now also subject to IFR pre-approval for any sale or disposal of the club's home ground. They must also establish the support of the majority of their fans in England and Wales prior to making any material changes to the club crest or emblem and predominant home shirt colours. The IFR will also have powers to charge a levy on licensed clubs in order to cover its running costs.

6. Backstop powers for financial distribution of broadcast revenue

One of the more controversial provisions during the passing of the Act related to the so-called backstop provisions for financial distribution of broadcast revenue between leagues (for these purposes, the Premier League, the EFL and the National League). Broadcast revenue tends to accrue to the top clubs and leagues, but there is a recognition that the elite clubs benefit from the financial health and wellbeing of all levels of the football pyramid.

Any of the three leagues could apply to trigger the backstop mechanism if at least one of the following conditions is met:

  • There is no distribution agreement in place between the relevant leagues;
  • There has been a material reduction in the relevant revenues received by the relevant league;
  • There has been a material change in circumstances affecting the relevant revenue; or
  • Five years have passed since the last agreement was entered into.

The process will involve the appointment of a mediator in order to facilitate the negotiation. If the mediation is unsuccessful, there will be a final proposal stage, in which the IFR would form a committee from its panel of independent experts.

7. Enforcement powers

Similar to other UK regulators, the IFR possesses enforcement powers. The IFR has a general power to request information from any relevant person for the purpose of exercising its functions. Before taking enforcement action, it must issue the person concerned with a warning notice. The IFR will be able to issue the following by way of sanctions:

  • Financial penalties, up to a maximum of 10% of the body's annual revenue;
  • Censure statements; and
  • In cases of persistent and aggravated non-compliance, the suspension or revocation of a club's licence.

8. Establishing a "Football Club Corporate Governance Code"

In scope clubs will be required to report on their corporate governance arrangements. They will need to set out how they are applying the code of practice that the IFR will develop in partnership with stakeholders. Clubs will be required to report on what action they are taking on equality, diversity and inclusion, and on their contribution to the economic and social wellbeing of their local community.

9. Appeal rights

Appeal rights against IFR decisions will be as follows:

  • By way of internal review, with the affected person able to request that fresh decision makers in the IFR review the decision;
  • Appeal to the Competition Appeal Tribunal (CAT) on judicial review principles; and
  • For the most punitive decisions, such as revoking an operating licence, to the CAT for a full merits review.

How the IFR uses these powers, and how its relationship develops with an industry that until now has not been subject to an independent regulator, will be closely watched by clubs and their advisers. If and when stakeholders take issue with IFR decision making, public law principles will become key for holding the IFR to account and challenging outcomes, as is already the case in many other sectors.

In the meantime, affected entities should consider the detail of consultations carefully and respond as fully as possible, again bearing in mind public law principles around consultation processes. For top tips on consultations as a means of shaping and influencing decisions, listen to our podcast here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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