The Independent Football Regulator: Challenge or opportunity?

On Monday 19 January, LCP’s Sport Analytics and Advisory practice hosted an evening of informed discussion and debate on the subject “The Independent Football Regulator: Challenge or opportunity?”

The evening attracted over 100 attendees from across the football industry, including club representatives, legal practitioners, football finance professionals, and members of the media. The event generated detailed and wide-ranging discussions, inspiring critical thought in relation to the Regulator, and generated several points of further interest.

How did the Regulator come about?

The first panel – consisting of Chris Anderson, Bill Bush, and Tom Greatrex and chaired by LCP’s Sir Steve Webb – raised a number of interesting points in relation to the rationale for the IFR’s creation. It was widely acknowledged that football clubs, as important community institutions and cultural assets, require protection from insolvency and potential liquidation. However, it was noted that the financial fragility of many clubs, coupled with the threat to restructure the industry through the creation of restricted competition (eg the European Super League initiative), means that independent regulation is perhaps the most suitable form of governance.

What will be the Regulator’s key challenges?

There was also extensive discussion as to the challenges the Regulator will have in exercising certain functions in the wider climate of the football industry. This included an analysis of the IFR’s position in preventing English clubs participating in breakaway or restricted competitions, should the industry witness the emergence of competitions with such features, licensed by existing international governing bodies.

Equally, points were made pertaining to the IFR’s challenge – should its financial mediation powers be activated – in controlling inflation around player wages. In particular, there appears to be an inherent challenge in finding resolutions to the financial distribution of funds from the Premier League to the EFL, should the release of such funds serve only to contribute towards further inflating the already over-heated player market in the lower divisions.

Evidence-based regulation

The second panel – consisting of Patrick Davis, Miguel Delaney, Nick De Marco and David Riley (the General Counsel of the Regulator) – participated in a lively and detailed discussion facilitated by Adrian Goldberg on the IFR’s key considerations, raising several points of particular interest. Notably, it was highlighted by David Riley that the IFR will be taking decisions using a firmly evidence-based approach. This is of crucial significance, given that the Regulator will be open to challenge in public courts (including to Judicial Review) and that a wide range of stakeholders, including fan groups, are likely to have standing.

Several points regarding ownership of clubs were also discussed. This included an interesting debate on whether the Regulator’s powers should extend to challenging owners that are perceived to be harming the wider pyramidal system, rather than doing any direct damage to a specific club.

Industry impact

The third panel – consisting of Phil Alexander, Tim Greenwell, Tom Markham, and Zoe Webber and chaired by Ashley Mould of LCP – discussed the impact of the IFR on stakeholders across the industry. From a club level, significant points were noted on the need for the Regulator to avoid duplicating the regulatory regimes already in existence; perhaps most notably those from the Premier League and EFL. The discussion also extended to the scope of the Regulator in including the National League, and more broadly, how investment may be affected by regulation.

Key takeaways

One of the significant strengths of the evening was the range of stakeholders appearing as panellists, and also in the audience, with a wide range of expertise and viewpoints on offer. As a result, there are a number of holistic takeaways from the event that should be noted.

The first of these is the importance for the IFR of establishing legitimacy. It was noted that the IFR has already started engaging actively in its attempts to establish itself in the industry – this is crucial for a body which has such a broad range of statutory powers. What is particularly encouraging to note is the importance the new regulatory body has placed on relationship building, proportionality, and credibility. It is by sticking closely to this trifecta of principles that the new body will be successful in entering a challenging market, beset with internal tensions.

Second, the IFR’s remit will not extend to competitive balance, which will remain the recourse of leagues and competition organisers. Instead, the IFR will be focused on ensuring financial and cultural sustainability within those competitions.

Finally, the IFR may have to be flexible in its approach, should its financial redistribution powers be activated. It should be cautious of resolutions that would simply result in inflating the market for wages and player transfers, and should look instead for a solution that encourages spending on areas that promote long-term growth.

Overall this event was unique in its ability to dissect the detail of a fast-moving and critical topic. Taking in a range of expertise, the discussions were successful in provoking critical thought, and providing transparency and clarity in relation to the strengths of and challenges for the Regulator.