Football's independent regulator will have power to settle ongoing row over financial distribution – Sky Sports
Football
Football independent regulator will have power to settle ongoing row over financial distribution between Premier League and English Football League; regulator’s ‘backstop powers’ will be confirmed on Tuesday when Football Governance Bill is introduced to Parliament
Tuesday 19 March 2024 11:20, UK
Football’s independent regulator will have the power to settle the ongoing row over financial distribution between the Premier League and the EFL.
The Government has long warned the football authorities the regulator would have ‘backstop powers’ to intervene and those powers will be confirmed on Tuesday when the Football Governance Bill is introduced to Parliament.
“These powers mean that if the leagues fail to agree on a new deal on financial distributions, then the backstop can be triggered to ensure a settlement is reached,” a Government announcement on the Bill said.
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Precise details over the point at which the powers would be triggered – and what those powers would look like – have not yet been confirmed but the Government said in a consultation response last September that one option it was considering was binding final offer arbitration.
Under that system, the two leagues would each submit their proposal, the regulator would assess them against predetermined criteria, and then would choose and impose one as the binding arrangement.
There had been hope that the Premier League’s clubs would make a formal offer to the EFL at a meeting last Monday, but none was forthcoming and instead, the Premier League said its clubs were focused on first agreeing new financial rules for the top flight.
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A Premier League statement said on Monday night: “The Premier League will now study the Football Governance Bill, working closely with Government, parliamentarians and key stakeholders. We agree it is vital that football clubs are sustainable, remain at the heart of their communities and that fans are fundamental to the game.
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“The Government has consistently stated that it wishes to support the Premier League’s continued global success which generates funding to help sustain the entire football pyramid. With our clubs, we have advocated for a proportionate regime that enables us to build on our position as the most widely watched league in the world.
“Mindful that the future growth of the Premier League is not guaranteed, we remain concerned about any unintended consequences of legislation that could weaken the competitiveness and appeal of English football.
“The Premier League remains fully committed to delivering its world-leading funding to the wider game, through £1.6 billion distributed to all levels of football across the current three-year term. This significant investment will continue and includes longstanding contributions to EFL and National League clubs, as well as women and girls’ football, and the grassroots of the game.”
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EFL chair Rick Parry said: “The EFL welcomes today’s arrival of the Football Governance Bill to Parliament in what we hope will be an important milestone to help us secure the long-term financial sustainability of England’s football pyramid.
“If delivered on the right terms, this landmark legislation can help fix the game’s broken financial model by offering the independent input ultimately needed to help ensure that all clubs can survive and thrive in a fair and competitive environment.
“The establishment of the Independent Football Regulator will be at the heart of this reform, and we are encouraged that the Regulator will be given backstop powers to deliver financial redistributions should the game be unable to agree a deal itself.
“In recent years, we have been working with Government and across Parliament on a cross-party basis. It is clear there is an appreciation of just how important professional clubs are to their communities and why they must be protected.
“We are pleased that the Government has stated its commitment to the State of the Game Review which will provide the basis for the Independent Regulator’s work in making the game financially sustainable.
“The League looks forward to contributing to that Review while simultaneously working with EFL clubs, parliamentarians, and officials to ensure that the Football Governance Bill is fit for purpose and can deliver the best regulatory regime to safeguard our game for generations.
“Finally, on behalf of the EFL I would like to thank MPs, Peers, fans and all those who have helped get the Bill to Parliament and we will continue to work collaboratively in the months ahead.”
An FA spokesperson said: “We welcome the commitment to strengthen independent financial regulation in football. We will continue working with the Government and other stakeholders as the Bill goes through the parliamentary process.”
Top-flight clubs were accused by Culture, Media and Sport select committee chair Dame Caroline Dinenage of making an “empty promise” while the EFL said it was “clearly disappointed” at the “repeated failure” to put forward any new funding offer.
Premier League sources insist the EFL pushed back on 15 separate points when the Premier League made a proposal covering increased funding and cost controls to the EFL last September.
EFL chairman Rick Parry told MPs in January that the funding offer under discussion would give his competition 14.75 per cent of the net media revenues earned by the EFL and the Premier League.
This has been projected to be worth an extra £900m to the EFL over six seasons.
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The regulator’s primary purpose, once established, will be to safeguard the financial sustainability of clubs in England through a licensing system. This will cover clubs from the National League up to the Premier League.
The Government has said the regulator will have the ability to fine clubs up to 10 per cent of turnover for non-compliance.
It will also have the power to block clubs from competing in unapproved competitions, a nod to the outrage among fans caused by England’s ‘Big Six’ seeking to form a European Super League in April 2021.
The Government intends the regulator’s licensing regime to be “proportionate” and said it will involve a system of provisional and full licences, to give clubs time to transition.
The regulator will have the power to assess prospective new owners and directors and disqualify them where they persistently or wilfully fail to comply with licensing conditions, the Government said.
Prime Minister Rishi Sunak said: “For too long some clubs have been abused by unscrupulous owners who get away with financial mismanagement, which at worst can lead to complete collapse – as we saw in the upsetting cases of Bury and Macclesfield Town.
“This Bill is a historic moment for football fans – it will make sure their voices are front and centre, prevent a breakaway league, protect the financial sustainability of clubs, and protect the heritage of our clubs big and small.”
In an interview with Sky Sports, West Ham United owner David Sullivan was quick to announce his dismay at the introduction of an independent regulator, which has received cross-party backing.
“The government has shown an inability to run anything. You would think they would have more important things to worry about at the moment.
“We already have a regulator for energy, water, trains etc and we have the worst and most expensive services in the world!
“We are now going to be forced to pay for something we don’t want. I wonder how many overpaid employees this new football quango will employ?
“The Premier League is the best league in the world so why change a winning formula?
“I hope the government don’t wreck something that works.
“This means we will be competing with teams from leagues in Europe who give a fraction of the money Premier League clubs give to both the EFL and grassroots football.
“If over the coming seasons the Premier League ceases to be the best league in the world it will be down to an interfering government.
“The Premier League currently gives away £1.6bn to the wider game and good causes. It contributes £7.6bn to the wider UK economy, creating 94,000 jobs. No other sports league in the world does this.
“Yes, there is a lot of money in the Premier League, but all that money is spent on creating the best and most competitive league in the world and as a result, two-thirds of Premier League clubs lose money.
“Between the 20 clubs there is almost £2bn of debt, so there really isn’t “available cash” to give away. But if we do give more away that money must be used to make them clubs sustainable, so what restrictions will be placed on how clubs about how they can use and spend the money? If they can spend it on players, wages or dividends how, does that make them more sustainable?
“Why should the Championship get 75 per cent of the money we pass down? What about sustainability of League One and League Two clubs? And the thousands of non-League clubs? Many Championship owners are richer than the owners of Premier League clubs – why should they be subsidised by the Premier League?”
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