The new Labour government are set to introduce an amended version of the Football Governance Bill in the House of Lords today. It includes the establishment of an independent regulator in an effort to tackle excessive and reckless risk-taking in the game, as well as clubs deemed to be “living way beyond their means”. 

Proposals for a new body to oversee elite football in the UK were championed by former Conservative sports minister Tracey Crouch, who led a government-backed fan-led review into the industry. The original legislation was formulated under the previous government but was not ratified before the general election.

The Labour government has made a series of changes to the bill in an attempt to address systemic problems seen in the sector. Despite generating billions in revenue every year, football clubs consistently post losses to avoid paying tax, with reliance placed on funding from rich owners to keep the cash flowing.

“For too long, financial instability has meant loyal fans and whole communities have risked losing their cherished clubs as a result of mismanagement and reckless spending," Culture Secretary Lisa Nandy said on Wednesday. “This bill seeks to properly redress the balance, putting fans back at the heart of the game, taking on rogue owners and crucially helping to put clubs up and down the country on a sound financial footing.” 

The regulator will be handed powers over payments that the Premier League makes to clubs that are relegated from the top flight to the Championship in England. The Premier League and the EFL have clashed over the way the top flight should redistribute revenue to the rest of the football pyramid. The regulator will have “backstop” powers to “mediate a fair financial distribution” if the Premier League and the EFL are unable to reach an agreement.

But the requirement for the incoming Football Regulator to consider government foreign policy in club takeovers has been dropped from the new  Bill. Under the previous version, prospective takeovers by overseas buyers would have been required to tally with British foreign policy, for instance, to prevent rogue states from buying Premier League teams. 

The Premier League has defended “parachute payments” — worth tens of millions a year to an individual club — for encouraging teams to invest in their squads to ensure they are competitive. However, the English Football League has said payments skew competition and incentivise other clubs to overspend in order to keep up with those in receipt of the payments.

In response to the update, the Premier League reiterated its concern about the regulatory framework: “We believe rigid banking-style regulation, and the regulator’s unprecedented and untested powers to intervene in the distribution of the Premier League’s revenues, could have a negative impact on the League’s continued competitiveness, clubs’ investment in world-class talent and, above all, the aspiration that drives our global appeal and growth.”