Clubs face 10 per cent revenue fines under new football regulator

Football clubs face being fined up to 10 per cent of their turnover if they fall foul of a new independent regulator after Rishi Sunak finally announced the publication of a “historic” new Football Governance Bill.

As revealed by Telegraph Sport, landmark legislation imposing statutory oversight on the game in England will be formally launched by the Culture Secretary, Lucy Frazer, at Leyton Orient on Tuesday after the Government’s patience snapped over the Premier League’s failure to deliver on its £900 million support system for the game.

The decision to prioritise a Bill that had fallen increasingly down the pecking order leaves top-flight clubs in danger of being forced by the new regulator to give away even more of their vast wealth.

It also emerged on Monday that a regulator brought in following the launch of the doomed European Super League and the collapse of clubs like Bury would be able to fine teams up to 10 per cent of turnover for “non-compliance” with their statutory obligations.

According to the Deloitte Football Money League, the top 14 English sides all enjoyed turnovers in excess of £198 million in 2022-23.

The Prime Minister said: “Football has long been one of our greatest sources of national pride. Up and down the country, it brings people together in celebration or commiseration.

“But 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.”

The Bill will see all clubs become subject to a formal licensing regime, which will include protections against financial mismanagement, breakaway competitions, stadium relocations, and changes to club names, badges and colours against the wishes of fans.

The legislation’s publication comes just over a week after a two-hour meeting of Premier League clubs failed to secure backing for a so-called ‘New Deal For Football’, instead prioritising reform to their own spending rules.

Telegraph Sport has been told the regulator is unlikely to impose a solidarity deal on top-flight teams before June, when they meet to discuss those new rules, but any further delays would risk one being fast-tracked.

Kevin Miles, the chief executive of the Football Supporters Association, said: “The regulator must be given the power to impose a financial settlement in the interests of the sustainability of the game as a whole. It is far too important to be left to the squabbling between the vested interests of the richest club owners.”

There will be considerable opposition from within the Premier League to the regulator, with many clubs fearing the new bill will fail to tackle football’s real problems while imposing costs that will harm clubs’ competitiveness.

A proposed New Deal settlement had support from some of the most wealthy clubs, as well as some of those who may soon be in the EFL. Others, however, have privately said they would be forced to borrow money because costs are already committed and there is no free cash flow.

It is also argued that the industry is already having to mitigate the impact of Brexit on clubs being able to recruit young talent from Europe.

There is a feeling that the potential for the regulator to intervene in a private contract between leagues is profoundly un-Conservative and has been excessively influenced by EFL chairman Rick Parry.

An interim fund, understood to be worth £40 million, was suggested at a recent Premier League but was not put to a vote, despite apparently having considerable support among member clubs. It all comes at a time when there is serious internal disagreement over proposed new rules governing Associated Party Transactions, which are intended to ensure that commercial deals are not unfairly inflated and so protect financial rules on spending.

The Premier League said in a statement: “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.”

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.”