Avoiding a VAR check: How the Independent Regulator for English Football can score the winning goal
Legislation is finally being introduced for an Independent Regulator for English Football (IREF) to oversee the professional men’s game, two years after the Crouch Review was published and following extensive stakeholder consultation this year on a Government White Paper, which built on the Review’s recommendations.
The Kings’ Speech confirmed that the government will bring forward a football governance bill within the next year to ‘safeguard the future of football clubs for the benefit of communities and fans’ and create a statutory independent regulator based on three primary duties: club sustainability, systemic sustainability and cultural heritage.
But major events could have a more profound impact on the future of football in England before the IREF is even established:
Everton was given an unprecedented 10-point deduction after being found to have breached the English Premier League’s (EPL) financial rules. Those relegated from the EPL during the time-period in question are now asking for compensation
Manchester City was charged with 115 counts of breaching financial fair play (FFP) rules after a 5-year investigation and is waiting to hear its fate, while Chelsea will likely face further scrutiny of deal payments made under former owner Roman Abramovich
The Court of Justice of the European Union (CJEU) will rule in December on the European Super League and whether UEFA and FIFA’s statutes controlling international club competitions in Europe contravene EU competition law
EPL clubs will vote on their proposed offer to the English Football League (EFL) on a future revenue share agreement (widely understood as an attempt to see off any intervention by the IREF)
Hopes that the IREF’s impending establishment might be enough to influence these events for the better might be wishful thinking. Analogies with interventions such as terms of trade for independent production and pensions regulation point to a complex interplay between regulatory approaches and outcomes.
As we have previously stated, the IREF will face tensions between its proposed strategic purposes and duties. IREF will also face tension between its role and that of other football authorities; how will the IREF react if EPL points deductions for breaches of FFP become a source of the very financial instability that it is trying to counter?
In addition, the IREF will be judged in the court of football fan opinion. The uproar from Everton fans over their club’s extraordinary EPL-imposed sanction resulted in an early day motion being tabled in Parliament just two working days later, which branded the points deduction ‘grossly unjust’ and called for the immediate establishment of an independent regulator. Although it is not certain, some believe that the IREF will view such cases very differently.
In ensuring the operational independence and accountability of the IREF, government has said that it will look at existing independent regulators like the FCA, Prudential Regulation Authority, The Pensions Regulator (TPR), the CMA and Ofcom as models.
Terms of Trade in the production sector could be a useful reference. Terms of Trade provides a regulatory framework for the commissioning of programmes to help support a sustainable and diverse production sector and high-quality and distinctive content for UK viewers.
Indeed, the threat of intervention was enough to get the parties to make agreements before the regulator was in position to intervene – something for policy makers and those the IREF is due to regulate, to think about.
The high-level structure is also informative. O&O helped HMG, Ofcom and subsequently Pact (UK trade association for independent producers) to design and then implement the Terms of Trade.
We could see, applied to men’s professional football, the statutory framework – core requirements for the parties and the powers of the regulator – being set out in legislation. The IREF may then provide guidance on the principles and objectives that clubs’ conduct should meet while clarifying, for example, key definitions, the clubs’ rights and obligations, or review and monitoring procedures.
The football authorities representing the clubs (which currently have self-regulatory codes covering areas under the new regulator’s remit) might then develop voluntary umbrella codes that provide further detail and certainty to clubs as to how the rules will apply in practice. These could be reviewed and agreed by the regulator. Clubs could also produce their own codes of practice, based on the umbrella codes, but which would reflect their own specific needs and preferences.
The recent Ofcom regulation of Video Sharing Platforms (VSPs) also follows a tiered approach and specifies that the codes of practice developed by the regulated entities (in our case, the clubs) should be clear and accessible for users (here read fans) and other stakeholders. This principle could help facilitate transparency and fan engagement with the good financial management of their clubs. Ofcom monitors and enforces compliance of VSP providers with their own codes of practice and may issue sanctions for breaches.
Another model for structuring the relationship between the IREF and football authorities can be found in pensions, where an MOU governs the cooperation and coordination between the Prudential Regulation Authority (PRA) and The Pensions Regulator (TPR) in carrying out their objectives and responsibilities. For example, the PRA regulates firms that may provide work-based pensions regulated by the TPR. The MOU is also intended to increase transparency for the public, Parliament and the regulated entities.
The IREF and existing football authorities could enter into similar MOUs on any areas of related or overlapping competencies. How well this works in practice will truly be tested if something drastic happens; for example, the TPR came under intense scrutiny in 2018 after the collapse of Carillion and a select committee report found it had been ‘feeble’. How would a football authority balance any objectives and duties as outlined in an MOU against the interests of its clubs?
Events will continue to shape the expectations of the regulator before it has even been established. The IREF, and government in legislating, will avoid a VAR check if they can navigate the high expectations of fans and balance the different requirements of those in the footballing world. Though the whistle is yet to be blown, pre-season has begun.
O&O is poised to help you figure out how the new IREF could affect you. To find out more get in touch with aaron.d’souza@oando.co.uk or helen.keefe@oando.co.uk.