LONDON – Mr Rishi Sunak’s government is planning to introduce legislation to establish an independent football regulator, after the English Premier League failed to agree on a deal to share revenues with smaller clubs, according to people familiar with the matter.

The Football Governance Bill, designed to help protect the financial health of smaller clubs and prevent bigger teams from joining breakaway tournaments, was signed off by the Prime Minister this week, the people said.

The decision follows a meeting on March 11, where Premier League clubs decided not to offer clubs in lower leagues a stake of broadcasting revenues, potentially worth about £900 million (S$1.53 billion) over six years, a decision which frustrated politicians. 

“The government is on the side of football fans, and we continue to engage with leagues and clubs ahead of the introduction of the Football Governance Bill,” a spokesperson for the Department for Culture, Media and Sport said.

“We have a clear plan to deliver a sustainable future for football, with fans at its heart, and our forthcoming legislation will deliver this through a tough new independent regulator.”

Caroline Dinenage, chair of the culture, media and sport committee, tweeted that it was “appalling” for the Premier League and its richest clubs to shelve the deal with the English Football League, and urged the government to push forward with establishing the independent regulator.

The new football regulator will have powers to monitor and enforce compliance with financial regulation requirements, corporate governance and club ownership. Clubs will also need to seek the regulator’s approval for the sale or relocation of its stadium.

The Bill, which the government is planning to introduce as soon as March, will need to pass through Parliament before it becomes law. Though the establishment of an independent football regulator is expected to gain cross-party support, it may take several months.

The government is keen to appear to be on the side of football fans, following the collapse of historic clubs such as Bury and Macclesfield Town in recent years.

The historical dominance of England’s most financially powerful teams, such as Manchester United, Manchester City, Liverpool and Arsenal, has disguised the underlying fragility of the English football pyramid, the government argued.

Poor governance and industry self-regulation has increased the risk of financial failure of clubs, with Championship teams incurring collective pre-tax losses of over £3 billion between 2010 and 2022, with levels of borrowing and debt increasing. BLOOMBERG