New football club licensing regime needs to be ‘strong, transparent and proportionate’

In their joint response to the consultation from the Independent Football Regulator (IFR) on its proposed club Licensing Regime, LCP and the Law Debenture Corporation plc (LawDeb) are calling for the new club licensing system to be strong, transparent and proportionate.

The club licensing regime is designed to improve financial stability across English men’s club football. All 116 clubs in the top five tiers will need a licence to compete from the 2027/28 season.

In their consultation response, LCP and LawDeb have raised several points that they believe need to happen for the regime to be efficient and effective:

• The IFR should outline more clearly how proportionality will work across the five tiers, given the new regime will need to cover organisations of greatly variable size and resource. More detail would provide greater clarity for clubs and a clearer roadmap of what obligations they will have.
• The IFR should require higher levels of security from club owners for potential future losses, through either greater levels of liquid assets held within clubs, or with legally binding guarantees and/or contingent assets – though this will need to be phased in carefully.  
• Stress testing should acknowledge the costs and risks of moving up the pyramid through promotion, as well as down through relegation.  
• The IFR’s Club Code should strengthen board governance: through requiring a minimum board size of at least three directors; mandatory director training on the structure and culture of club football in England; and IFR-led boardroom diversity monitoring 
• Club strategy and corporate social responsibility should form part of supporter groups’ advisory remit 

Aaryaman Banerji, Head of Football Governance at LCP commented:

“The club licensing regime is a central part of the Independent Football Regulator’s role. It will be critical in fostering greater financial discipline across the football pyramid and in protecting key stakeholders, including fans. For that reason, it is vital that the new licensing system is built on a strong and transparent framework. LCP and LawDeb believe the recommendations set out in this consultation response can play an important role in shaping that regime for the better.”

Patrick Davis, Head of UK Corporate Secretarial Services at LawDeb, added:

“Getting the Club Code right — and ensuring that directors are equipped to act in the best interests of their clubs while reflecting the unique culture of English football — will be essential to an effective club licensing regime. Our recommendations for a minimum of three directors on the board of any regulated club, along with mandatory training for directors on the structure and culture of club football in England, should significantly strengthen this.”

LCP and LawDeb recently published a joint report, Football Governance in Transition, which analysed the board composition of the 116 regulated clubs and called for reforms to improve board diversity, director competence, and minimum governance standards.

LCP and LawDeb have also submitted responses to IFR consultations covering Information Gathering and Enforcement, the Owners, Directors and Senior Executives (ODSE) Regime, Sanctions, and Internal Reviews which can be read here.