The Football Governance Act has already become a highly contested piece of legislation.
The Football Governance Bill was originally introduced to Parliament in March 2024 by the previous Conservative government alongside a fan-led review of the game.
However, the Labour government continued with the legislation and made some structural adjustments in turn. The Act received Royal Assent on 21 July 2025, introducing a plan for major change in the industry, despite industry professionals raising some concerns.
The main purpose behind the legislation is to establish a new independent regulator for English Football (the IFR).
The IFR would ensure the financial sustainability of football clubs, with greater enforcement and monitoring of economic regulation, as well as striving to allow fans to have a greater say in how their clubs are run.
The act came after a period of high financial issues faced by English football teams, including Derby County, Bury and Reading, whose fans were left to suffer the consequences of high-risk-taking and “reckless mismanagement”.
Influenced by recent instances, securing the long-term financial sustainability of football clubs’ ownership structures was at the heart of the Football Governance Bill’s origins.
The new regulator is set to hold exclusive powers over financial regulation, fan management and ownership verification across the Football Pyramid.
This includes stronger Owner and Director tests to ensure more sustainable ownership models; tougher financial regulation and backstop powers to ensure a fair distribution of finances between the leagues.
Outside of the financial aspect, the regulator’s powers also focus on the heart of football: the fans. The IFR will enforce new standards to ensure fan engagement is involved in club decision-making, also prioritising the protection of key club heritage aspects such as their football badge and stadium location. This aims to reduce the distance between fans and their club’s ownership and to ensure that owners face oversight from their fan bases.
Most notably, the regulator bars clubs from joining closed-shop competitions and breakaway leagues. This addition to the legislation stems from the proposed Super League in 2021, in which six English clubs originally registered to participate.
The highly unpopular proposal would have completely reshaped English and European football, threatening the heritage of the game as we know it.
The Bill has had high backing from fan bases and members of the industry, with the legislation ensuring the game remains true to its supporters.
While the Act has now received Royal Assent, its journey through Parliament was not smooth sailing, with various criticisms from MPs, Lords and Industry Professionals raised throughout the legislative process.
The Premier League stated in October 2024 regarding the early proposals of the legislation that it risked “weakening the competitiveness and appeal of English Football”. However, since the legislation has been fine-tuned and become law, the Premier League has not issued an updated response.
One concern that was raised by Brighton’s Paul Barber to the Times in January this year was the risk to “Parachute payments”, and the effect it can have on high-spending, high-risk clubs.
Parachute payments are given to teams when they are relegated to ensure the club can cope with significant financial losses.
The payments have ensured that clubs can invest higher within the season with a reduced risk if they were to be relegated.
Barber told the Times: “Parachute payments being reduced or even abolished would certainly have an impact on investment.
Then there are the potential unintended consequences. The cost of regulation is going to have to be borne in most cases by Premier League clubs.
We’ve two choices with those costs. We either stop doing some of the things we’re already doing, whether that’s academy, women’s, girls’ football or whatever, or we pass those costs on to fans.”
Within the final bill publication, it states that parachute payments will not be abolished; however, they will be included in financial distribution measurements if an expert committee determines they are relevant to the financial sustainability of the football pyramid.
Yet lower down the Leagues, support has been more common, with the English Football League Chairman Rick Parry praising the bill for allowing more clubs to rise and fall throughout the football pyramid without the threat of financial catastrophe.
The regulator is expected to come into effect by the end of this year.
Featured image via Lauren Hurley / No 10 on Flickr.
