An overview of the Government’s Fan-Led Review

Just over a year ago, the Trust ran a survey of the Forest fanbase following the announcement of the Project Big Picture proposals by leading Premier League clubs. Over 600 responses were received and more than nine in ten Forest fans called for a fan-led review of the game. The UK Government has now completed this review and released recommendations including an Independent Regulator, backed by around five in six Forest fans. The Trust has released this overview of the Fan-Led Review and outlines what it means for supporter dialogue and supporters' trusts. We'll keep you up to date with progress.

What is the Review?

The independent review was announced by the then Culture Secretary, Oliver Dowden, on 19th April, 2021. It is a comprehensive examination of the English football system with the aim of exploring ways of improving the governance, ownership and financial sustainability of clubs in the football pyramid, building on the strengths and benefits that our game already provides the nation.

There were three key points of crisis leading to the Review:

1. The collapse of Bury FC
2. Covid-19 and its impact on football
3. The attempt to set up the European Super League (ESL) in April 2021

Who was involved and how were fans consulted?

The Review has been led Tracey Crouch MP supported by a panel and assisted by officials. The panel comprised representatives of fans including the Chief Executive of Football Supporters’ Association (FSA) and other members from the football community.

Evidence was heard from a wide range of football stakeholders including:

• Representatives of supporters of more than 130 football clubs
• Football Supporters’ Association
• Kick it Out
• The Football Association (FA)
• The Premier League
• The English Football League (EFL)
• National League
• The Professional Footballers Association
• Football club owners including the ‘Big Six’ and others throughout the pyramid

Evidence sessions were held with experts in finance and other relevant areas including the Beautiful Game, FA Equality Now and Fair Game.

An online survey was conducted with over 20,000 responses. Preliminary findings were issued on 22nd July, 2021.


The key findings of the review

• The incentives in the game are leading many clubs with fragile finances which were further exposed by Covid-19
• Many clubs are poorly run, with reckless decision making chasing an illusion of success and a disconnect between the intertest of fans and owners
• Regulation and oversight of the game at the domestic level is not up to challenge of solving the structural challenges and specialist business regulation that will be needed

What are the Strategic Recommendations of the Review?

There are ten strategic recommendations:

1. A new independent regulator for English football (IREF) – to ensure the long-term sustainability of football.
2. IREF should oversee financial regulation in football – to ensure financial sustainability of the professional game.
3. IREF should establish new owners’ and directors’ tests for clubs – replacing the three existing tests to ensure that only good custodians and qualified directors can run these vital assets.
4. Football needs a new approach to corporate governance – to support a long-term sustainable future of the game.
5. Improvement in Equality, Diversity and Inclusion (EDI) – IREF to regularly assess EDI plans.
6. Supporters should be properly consulted by their clubs in taking key decisions – by means of a Shadow Board.
7. Additional protection for key items of club heritage – to recognise that football clubs are a vital part of their local community.
8. Fair distributions are vital to the long term health of football – The Premier League should guarantee its support to the pyramid and makes additional and proportionate contributions to further support football.
9. Women’s football should be treated with parity – and be given its own dedicated review.
10. The welfare of players exiting the game needs to be better protected – this is an urgent matter particularly for young players.

Why is an Independent Regulator so important?

There are several reasons for an Independent Regulator:

1. Conflict between current regulators e.g.
a. Premier League require 14 of 20 clubs to approve a rule change.
b. EFL require a majority of (72) clubs + a majority of (24) clubs in the Championship.
2. Lack of resource – taking too long to resolve issues is a big concern.
3. Missed opportunities – and a lack of action for reform.
4. Lack of one voice – as evidenced by Covid-19 leading to further uncertainty.
5. Lack of accountable leadership – the sub-standard regulatory system has overlaps and underlaps, with varying levels of oversight including the Premier League, EFL, National League, and the FA.
6. The need for action.

The Review concluded:

1. The men’s game is at the financial precipice.
2. Corporate governance in clubs can be poor.
3. Short-term interests of owners and the long-term interests of fans are not always aligned.
4. The current system of regulation is poorly designed – it is slow to act, there is a conflict of interest, and there is a lack of clear regulatory leadership.
5. Fans have lost faith in the football authorities.
Four options were considered:
1. Leave it to the market – let poorly run clubs to collapse.
2. Allow a football-led solution to continue (self-regulation).
3. Co-Regulation.
4. Independent Regulation.

After considering best practice in other important industries the Review concluded an Independent Regulator would be the best option:

• It would focus on the long-term interests of fans, clubs and the wider game
• It would be more adaptable and flexible, and be free to take action
• It provides a holistic solution – avoiding gaps and duplication, and seeing the bigger picture
• It will provide focus in a complex area with an ability to recruit the relevant skills and experience

Independent Regulator for English Football (IREF)

An independent regulator established in statute ensuring operations and decision taking are independent from government and political interference, with a clear remit.

Its duties will include:

• A duty to assess, report and act on the health of finances in football, and on distributions and flows in the game
• Having regard to English football’s position as the premier global location of domestic football
• Undertaking its work in a timely manner
• Ensuring equality, diversity and inclusion is a key part of the set-up of clubs

The initial focus will be on financial sustainability requirements.

Regulation will be delivered through a licensing system applicable to the Premier League, EFL and National League i.e. to Step 5.

The club will be the license holder – but senior leadership will also be important.

IREF will create license conditions which will need to be flexible to respond to future changes.

IREF will have powers relating to regulations and license requirements, including information requests, with interim powers for suspected breaches.

A statutory timetable will be established for investigations; and sanctions will be agreed.

IREF will have its own board and a chair (independent of clubs) appointed by a panel of experts. It will have its own staff who will have an understanding of the football industry, and also the range of professional services required to fulfil its role.

The Board will be accountable for its actions, decisions and how it operates. It will be accountable to government, and prepare an annual report setting out its operational and financial performance.

IREF will be sustainably funded by license fees on a sliding scale based on broadcasting revenue – each club in the same league will pay the same fee. It is understood that government will fund set-up costs.

Shadow regulation will be introduced when the legislation receives Royal Assent.

What role will supporters’ trusts play in the future?

Supporter engagement is a key aspect of the Review – the proposal is that this will be through the licensing rules.

The Review considered several options:

• Fans’ forum
• Structured dialogue
• Fan-elected director
• Supporter advisory/shadow board
• Supporter shareholders

A mandated Shadow Board is recommended with the following conditions:

1. Written Terms of Reference based on a standard IREF template allowing local flexibility
2. Consist of 5-12 members appointed under a democratic process.
3. Appoint a chair from its members on a seasonal basis.
4. Have reserved seats for representatives from key supporter groups including representatives of the body holding the Golden Share, equality, diversity and inclusion representatives, youth supporters and international supporters (if relevant).
5. Members should be subject to retirement by rotation – ensuring turnover and experience on the Shadow Board.
6. Hold at least quarterly meetings with club executives, with guaranteed attendance from the club CEO or equivalent twice per year.

Issues for the Shadow Board:

1. The club’s strategic vision and objectives.
2. Short, medium and long-term business plans.
3. Operational matchday issues of concern to supporters.
4. Any proposals relating to club heritage items.
5. Marketing, merchandising, and sponsorship plans and performance – strategy not specific contracts etc.
6. Stadium issues and plans.
7. The club’s plans for broader supporter engagement.
Notes – Shadow Boards should…
1. receive suitably redacted club board papers ahead of meetings.
2. be seen as a minimum level of consultation.
3. be solely focused on business (not playing) matters.

Golden Share

There is a recommendation that it should be a license condition that all licensed clubs should include within their Articles of Association a Golden Share requiring democratic consent to proposed actions relating to identified heritage items. Each Golden Share right should have circumstances in which it will not apply.

Characteristics of Golden Share:

1. No financial value or capable of being transferred or otherwise disposed of other than to than to an alternative supporter’s body meeting the required criteria.
2. It does not convey ownership rights nor rights to attend an AGM, or rights to vote on any ordinary or special company resolution.
3. The rights of the Golden Share cannot be varied without the written consent of the owner of the share and the Independent Regulator.

Issues linked to Golden Share:

• Sale of club stadium
• Re-location of the club outside of the local area
• The club joining a new competition that is not affiliated to FIFA, UEFA, and the FA
• Club badge
• First Team home shirt club colours
• Club Name

Who holds the Golden Share?

A Community Benefit Society (CBS) formed under the Cooperative and Community Benefit Societies Act 2014. A CBS has:

1. Is incorporated and has legal personality.
2. Has community benefit written into its governing documents and must conduct business for the benefit of its local community.
3. Must operate on a democratic one-member-one-vote basis.
4. Cannot distribute profits among its members.
5. Are subject to regulation by FCA.
6. Are an asset locked organisation.

Nottingham Forest Supporters’ Trust would qualify as such a body.

What are the next steps?

The Review recommendations require legislative approval which will take 6-9 months. In the meanwhile, there is ongoing dialogue in the media. Whist EFL support the proposals there is opposition from the Premier League and FA.

The Trust will monitor progress of the Bill and update members periodically.

Where can I read more?

The Fan-Led Review of Football Governance: securing the game’s future is available at
https://www.gov.uk/government/publications/fan-led-review-of-football-governance-securing-the-games-future

If you have any question, please contact us.