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English soccer regulator will have financial backstop powers as clubs call for powers to block state ownership

Soccer-led solution on financial distribution remains preferable, but UK governement notes 'slow progress' on an agreement.

8 September 2023 PA

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The UK government remains committed to giving the regulator targeted backstop powers to impose a financial settlement on English soccer, if the sport’s authorities cannot agree one amongst themselves.

A soccer-led solution on financial distribution remains preferable, but the government’s latest response document said, but it again noted the ‘slow progress’ being made in reaching an agreement.

The Premier League, the English Football League (EFL) and the Football Association (FA) remain in talks over a ‘New Deal For Football’ which includes financial distribution, as well as cost control mechanisms and discussions around the domestic calendar.

A senior source involved in those talks told the PA news agency on 7th September that all sides were working towards an agreement and that there was an awareness that a deal needs to be struck soon.

The document did not offer any new detail on the precise nature of the backstop powers a regulator would have, though as in the whitepaper one option being looked at is binding final offer arbitration, where the sides would submit their proposals and the regulator would assess them all and impose one.

Fair Game, an organisation which has long called for reform of the game and the introduction of an independent regulator, gave a cautious welcome to the government response but believes the regulator should take a more active role in managing financial flows in the game.

Its chief executive Niall Couper said: “A system where the game receives UK£3.19billion of TV revenue each year, but clubs in League One can’t afford to pay their energy bills, the hiring of a kit manager in the National League is considered a luxury, and indeed a club’s very survival is a daily concern, is clearly flawed.

“At the moment, for every UK£1,000 of television revenue, UK£882 goes to Premier League clubs, but UK£32.85 to most Championship sides and just 15p to National League South clubs.

“The omission of equality standards and environmental standards from the regulator seems short-sighted and we would urge the government to allow the regulator to have the powers to look at those areas in the years ahead.”

EFL chair Rick Parry welcomed the UK government’s response, adding: “As a consistent supporter of the independent regulator’s introduction, it is important that delivering financial sustainability for men’s English professional football will be its focus, and we now look forward to seeing legislation introduced to parliament.

“We are pleased that so many EFL clubs were able to have their voices heard as part of this stage of the process and, as we enter this important moment for the game, the EFL remains committed and ready to engage constructively with the government alongside the game’s stakeholders to help deliver the financial and regulatory reset our game urgently needs.”

The government said in its response it was ‘minded’ to set up new standalone body independent of existing bodies, and of itself.

‘From now until the legislation is brought forward, we are continuing to work with stakeholders, as well as leading experts, to further develop the design of the policy [on the regulator] and the details of the accompanying legislation,’ it stated.

According to the Guardian, a number of top-flight clubs have asked the government to block nation states from owning English teams as part of a new regulator’s brief to stable oversee ownership.

The government’s update on the arrival of an independent football regulator comes at the end of a consultation process with stakeholders and confirmed implementation will be addressed ‘when parliamentary time allows’. According to The Guardian, some leading top-flight clubs used the consultation period to individually lobby the government on state ownership, a process separate to any Premier League submissions.

Wit the suitability of prospective owners and directors set to be one of the regulator’s key roles, the government said its consultation process had revealed support for an ‘ethics and integrity’ component within any owners’ and directors’ test (ODT) and that ‘some stakeholders suggest that the ODTs should limit state ownership’.

The Premier League updated its ODT during the off-season but that did not mention state ownership and an apparent split has developed with some of its clubs on the issue appears to have arisen following the takeover of Newcastle United by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF).

The Premier League said it received ‘legally binding guarantees’ that the Saudi state would not have control over Newcastle in the event of any deal, but this has been tested by the revelation in US legal briefings related to the dispute in golf between LIV Golf and the PGA Tour that described PIF as ‘a sovereign instrumentality of the Kingdom of Saudi Arabia’. Yasir al-Rumayyan, the chair of Newcastle and governor of PIF, was also described as ‘a sitting minister of the Saudi government’. This revelation led several Premier League teams to believe the guarantees had been breached.

In addition to the wrankles over ownership suitability, anti-discrimination group Kick It Out has said it will continue to push for the new independent regulator to be able to hold the game accountable for its lack of diversity.

There are fresh indications that equality, diversity and inclusion (EDI) matters will be beyond the regulator’s remit, after the government issued its formal consultation response to the football white paper which it published in February.

The latest government document on English soccer reform talked about the need for the regulator to have a ‘tightly defined’ scope, focused on financial sustainability.

‘Although the regulator is not designed to tackle every issue in the game, we recognise the desire for more action to be taken across a number of areas in football,’ the response stated.

‘This is why, outside of the regulatory framework, the government is working with key stakeholders to address these.’

However, Kick It Out intends to keep pushing for EDI requirements to form part of the new governance code which the regulator will oversee.

“For too long football has not been held to account for the lack of diversity in boardrooms, coaching and refereeing, and the absence of any transparency when it comes to reporting incident and workforce data,” Kick It Out chief executive Tony Burnett said.

“Kick It Out have been actively engaged with the Department for Culture, Media and Sport throughout the consultation process to ensure that EDI is at the heart of football’s governance and we will continue that dialogue moving forward.

“We are working on submissions to arm the regulator with appropriate tools to support the drafting of the football club governance code to include appropriate EDI requirements, including mandatory transparency reporting of employee representation and discrimination data as a minimum requirement.”

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