One of a number of Bills that fell when the UK Parliament was dissolved ahead of the recent General Election but which reappeared in the King’s Speech setting out the new Government’s programme is the Football Governance Bill, which established an Independent Football Regulator (IFR). We’ve covered the proposals for this groundbreaking measure previously, so what follows is an assessment of where a measure that enjoyed cross-party support may go next.

The measure has prompted much lobbying, not least from the English Premier League (EPL), which runs the top division of English soccer. The EPL has made little secret of the fact that it doesn’t see an independent regulator as necessary, has attempted to kick the regulatory can down the road, and has argued strongly that its position as both competition organizer and regulator is not a conflict of interest.

It’s somewhat ironic that the efforts to delay the Bill may result in a new Government, one that may be looking for a popular measure that provides an early indication of its intention to implement change, passing a Bill that takes a stronger line on independent regulation than the one the previous Government tabled.

Eyebrows have been raised, too, by the EPL joining other domestic leagues in suing world soccer’s governing body FIFA over its plans to add more games to the schedule. The action claims FIFA has abused its power by taking unilateral decisions and that its position as both competition organizer and regulator constitutes – a conflict of interest!

Good regulation requires a combination of a clear, strong framework and the ability of regulators to interpret and apply that framework in real circumstances.

The view expressed by those backing regulation is that this is “ready-made legislation”, which means that unmaking and reassembling the Bill is, at best, highly unlikely. For clarity, we’ve linked to the wording tabled in the last session of Parliament, and drawn on discussions with sources close to the Bill’s progress to outline changes being pushed for.

It’s important to consider Parliamentary process here. Amendments to drafted Bills are quite hard to achieve because acceptance concedes that the original drafting could have been better. There’s also a chance amendments don’t reflect the horse trading that may have been needed to get to the original wording in the first place. However, some things can be pushed for in the knowledge that they are unlikely to be taken into the wording of the bill itself – what is known as the face of the Bill – but could, through a view expressed in Parliament by the Minister, be reasonably taken as guidance on the application of the Bill.

Good regulation requires a combination of a clear, strong framework and the ability of regulators to interpret and apply that framework in real circumstances while still sticking to the spirit of the legislation’s intention. Securing a general direction of travel from a Minister’s answer to a question or proposed amendment can also provide the necessary flexibility to deal with real life situations where the law applies.

Clauses under discussion

A simple initial change to Clause 8 of the Bill would add “supporters and supporters’ organizations” to the list of those whom the regulator is required to consult with.

Clause 10 sets out a requirement for the regulator to issue a State of the Game report setting out an overview of progress on regulatory objectives within three years. There is a feeling that the first report should be published within a year in order to sharpen focus, and that the issue of the quality of fan engagement should be a prominent part of it.

Clause 37 of the Bill states that in making a decision on club ownership “the IFR must … have due regard to the foreign and trade policy objectives” of the Government. This is a substantial piece of Foreign Office overreach, but also something that could open to the Bill to a criticism falsely levelled at it by its opponents that it is state interference in football in breach of FIFA and UEFA statute. Replacing the word “must” with “may” seems to be a sensible solution.

Clause 45 imposes a duty not to operate a team in a prohibited competition. This clause is aimed specifically at preventing a recurrence of the attempt by the EPL’s top six clubs to break away and join a European Super League. But there is no explicit requirement for clubs to consult fans about participating in potentially prohibited competitions, or over new ideas for the format of existing competitions. The Football Supporters Association (FSA) is keen to see this rectified.

Clause 46 addresses the issue of the disposal of a club’s home ground. There is currently no requirement to consult supporters, local stakeholders or competition organisers. This seems like an oversight that can easily be rectified, although the situation is more complex in cases where grounds are in separate ownership from clubs. Nonetheless, steps could usefully be taken to ensure relevant views are properly considered. The same principles apply to clause 48, which addresses the issue of relocation.

“The exclusion of parachute payments would cement the current grotesque inequalities in revenue distributions and undermine IFR’s ability to deliver its systemic financial resilience objective”.

The Football Supporters Association

Clause 55 is about the regulator’s ability to distribute revenue if other parties fail to agree, and as currently worded contains some serious flaws that need to be rectified if the Bill is to deliver what it intends. The most obvious issue here is the explicit exclusion of parachute payments made to relegated clubs from the scope the regulator has when considering revenue distribution. As the FSA says: “The exclusion of parachute payments would cement the current grotesque inequalities in revenue distributions and undermine IFR’s ability to deliver its systemic financial resilience objective.”

A link to the Hansard record of the debate on this clause (scroll down to clause 55) shows what was said, and this record reveals no sound reason for excluding parachute payments from the regulator’s remit. Including them would not mean abolishing them, but it would mean they should be taken into consideration in connection with revenue distribution.

A related issue in this clause concerns the definition of relevant revenue. Current wording refers to revenue “received by the relevant competition organiser.” Literal interpretation of that wording would mean that if a model in which broadcasting income was paid directly to clubs was introduced – and this is something the bigger clubs have been pushing for – then that revenue would not be included. It would make sense to include it.

The clause also doesn’t apply to income from UEFA or FIFA competitions, and again this fails to address a significant cause of financial inequality. There are obviously significant legal issues with any attempt in a UK Bill to specify where money generated from another jurisdiction goes, but it is both possible and desirable to require a regulator to consider a club’s total wealth when considering how to distribute English TV money.

Wording requiring the consideration of all money received directly by clubs would seem to be the obvious and simple solution here.

Backstop powers

In Clause 56, a simple amendment to allow the regulator itself to trigger so-called “backstop” powers when competition organizers fail to agree would seem to be a no-brainer for anyone serious about having an effective, independent regulator. It’s a little more difficult, but equally desirable, to enable the regulator to trigger backstop powers if a settlement is agreed that compromises the systemic financial sustainability objective that underpins the regulation.

There are a number of areas on the face of the Bill where specific mention of democratic Supporters Trusts and representative fan organizations would be beneficial. Producing a line-by-line exposition of how, why and when supporter groups should be involved is clearly impractical and, arguably, not even desirable. What there does need to be is a clear requirement framework and a workable method of making qualitative judgment on fan engagement. This would enable the regulator to take a robust line in judging whether fan engagement meets the standard required.

Currently, the only qualitative framework is the Premier League Fan Engagement Standard (FES), a lowest-common-denominator product of clubs wanting solutions ranging from ‘nothing at all’ through ‘as little as possible’ to ‘as much as we have to.’

It is vital the regulator has the confidence of supporters and the wider public, and gaining that confidence will depend in large part on its ability to ensure that there is genuine fan engagement.

Early signs are that amendments tabled by Labour MPs including new Sports Minister Stephanie Peacock, who chose last weekend’s FSA conference as the event at which to deliver her first speech, will form part of the freshly-tabled Bill. The government is apparently keen to get the regulator up and running by Christmas.

• Full disclosure – author Martin Cloake has worked with the FSA on the proposed legislation. Opinions expressed are his own.