The recent meeting with Martyn Henderson, Chief Operating Officer (COO) for the Independent Football Regulator (IFR), provided some valuable insights, some answers to members queries, and a chance to demystify the Regulator’s role and powers.
Following the Football Governance Act receiving Royal Ascent in July, the IFR will be legally established on 1 November and will regulate the top five tiers of men’s English Football. The Act effectively recognises that fans are key stakeholders in the national game, and consultation with them will be a requirement of the club licences. And the Act provides scope for fans to provide feedback to the Regulator about how well fan engagement with their club works.
The key function of the IFR will be to regulate clubs in order to maintain their financial stability and longevity. There are some misconceptions around what will be within the scope of the IFR under the new law. The focus is on clubs, who runs them and how they are run but not explicitly the leagues or competitions that the clubs play in.
What is in scope:
- 116 clubs in top 5 leagues (Step 1)
- Financial Regulation
- New Owners, Directors and Senior Executives regime
- Fan engagement requirements
- Corporate Governance Code
- Protections for club heritage (stadium, badge, kit colours)
- Distributions (via a ‘backstop’ mechanism).
What’s not in scope:
- Clubs competing in Step 2 – leagues below the National League
- Women’s football
- Match scheduling
- VAR
- PSR/FFP
- Sporting sanctions, e.g. points deductions
- Customer service.
The key instrument for regulation will be the club licensing scheme and all 116 clubs will be required to apply for a licence every three years.
It is claimed there will be stronger due diligence, and enhanced tests for owners, directors and senior executives than those currently employed by the leagues.
All clubs will be provisionally licensed by the beginning of the 27/28 season.
Each club will have a designated supervisor, who is part of the IFR team, to offer guidance and support, and monitor and report on a club’s compliance with the terms of the licence. The IFR will roll out consultations and more information on licensing in the coming months.
Engagement and consulting with the fanbase – clubs will need to have ‘adequate and effective’ means by which it regularly consults its fanbase and takes those views into account when making decisions on the relevant matters, which are defined as:
- The club’s strategic direction and objectives
- The club’s business priorities
- Operational and match-day issues, including ticket pricing
- The club’s heritage
- The club’s plans relating to additional fan engagement.
There will not be a ‘one size fits all’ solution to how fan engagement is implemented and operated. It is expected that the IFR will publish guidance outlining its expectations for the standards clubs should meet.
It is hoped that the fan engagement standards currently in place in the Premier and Football Leagues will be improved upon as minimum standards. However, it will be up to fans and supporter groups to be actively involved with the dialogue and engagement plans a club agrees to, and to provide feedback to the IFR in helping to judge if this is working. The key phrase is ‘adequate and effective’ – which it is hoped will be focussed on the views of supporters.
Club finance – Given that the IFR’s key role will involve the financial stability of clubs, supporters may find it hard to understand why financial fair play (FFP) or profit and sustainability rule (PSR) will not be part of the Regulator’s scope.
One of the main scare stories in the press, was that the Act would lead to expulsion from UEFA and FIFA. The Act is clear to differentiate regulating clubs from leagues, competitions or national football bodies i.e. the FA – therefore avoiding any likely conflict with membership of UEFA and thus FIFA. As such, financial regulations, match scheduling, refereeing (including VAR) and other playing conditions and rules, will remain the remit of the leagues and the FA. Given the impact PSR and parachute payments are having on the sustainability of some clubs, it will be interesting to see how this plays out in the coming seasons.
The IFR transition team is roughly split up into four main areas:
- organisational set up
- research and analysis
- scoping of regulatory policy
- engagement with industry.
The IFR’s first phase of consultations have begun this year, with the recent launch of the ‘Owners, Directors and Senior Executives’ consultation. Representations are being sought from owners, directors and fan organisations. A set of guidelines is due to be delivered by December. Another key aspect of the IFR’s work is the State of the Game Report, which is expected to be published within 18 months of the Secretary of State formally specifying which competitions are within scope of the IFR through secondary legislation.
Foxes Trust will continue to monitor developments with the IFR. We have already begun raising with LCFC, as to what impact the new legislation will have. The Trust will undertake to interact with the Football Supporters’ Association regarding responses to consultation requested by the IFR.
As is often said, ‘the proof will be in the pudding’, but it is hoped that the IFR will be able to prevent another club disappearing from the football pyramid.