The Football Regulator

[chinapig]

White paper now expected in February:

https://www.bbc.co.uk/sport/football/64411515

[ExiledAjax]

1 hour ago, chinapig said:

White paper now expected in February:

https://www.bbc.co.uk/sport/football/64411515

"Around Valentine's Day" is what I heard last week.

[chinapig]

22 minutes ago, ExiledAjax said:

"Around Valentine's Day" is what I heard last week.

Tracey Crouch may get a few cards from secret admirers then.

[ExiledAjax]

Just now, chinapig said:

Tracey Crouch may get a few cards from secret admirers then.

No doubt Donelan will claim them though.

[chinapig]

Potential progress between the PL and the EFL. Though I'm not holding my breath:

https://www.theguardian.com/football/2023/jan/27/efl-urges-premier-league-to-halve-financial-gap-with-championship

[ExiledAjax]

24 minutes ago, chinapig said:

Potential progress between the PL and the EFL. Though I'm not holding my breath:

https://www.theguardian.com/football/2023/jan/27/efl-urges-premier-league-to-halve-financial-gap-with-championship

Not a mention of anything about the gap between Champ and L1 or L1 to L2 though. I think that has to be addressed as well. 

[Mr Popodopolous]

Been leaked or maybe 'leaked' to The Sun a document for it.

https://www.dailymail.co.uk/sport/football/article-11703467/Government-football-charter-LEAKED-owners-unable-prove-source-wealth-BARRED.html

[chinapig]

8 hours ago, Mr Popodopolous said:

Been leaked or maybe 'leaked' to The Sun a document for it.

https://www.dailymail.co.uk/sport/football/article-11703467/Government-football-charter-LEAKED-owners-unable-prove-source-wealth-BARRED.html

See also here:

https://www.theguardian.com/football/2023/feb/02/mps-urge-football-clubs-to-back-fan-recommendations-over-sustainability

@ExiledAjaxthe Sustainability Index also gets a mention.

[ExiledAjax]

2 minutes ago, chinapig said:

See also here:

https://www.theguardian.com/football/2023/feb/02/mps-urge-football-clubs-to-back-fan-recommendations-over-sustainability

@ExiledAjaxthe Sustainability Index also gets a mention.

Cheers, and to @Mr Popodopolous as well, (hope you don't mind if I read the Guardian article over the Mail's). Although even that one is a bit of a mish-mash article built from 4 or 5 recent ones with a bit at the start that's new. I did, for once, open the Sun's article as well. Poorly informed and full of confusion over what is the Football Charter and what is the Whitepaper. This Charter seems like a propaganda piece of fluff. The meaningful document will be the Whitepaper and subsequent "Football Reform Bill" or whatever they'll name it.

Without diving into politics I'd honestly quite like Labour to be properly cross-party on this. Powell doesn't need to get chippy, and the dithering and delay is frustrating but is a symptom of the government turmoil we saw last year... turmoil she presumably was glad to see.

This should be an easy vote winner for any MP with a football club or a large number of football fans in their constituency - ie basically every MP.

Should be a good couple of weeks.

[Mr Popodopolous]

Dunno if it's worthy of a thread in itself but...

Wonder if PL clubs are trying to tie this to extra revenue.

Edited February 2, 2023 by Mr Popodopolous

[ExiledAjax]

25 minutes ago, Mr Popodopolous said:

Dunno if it's worthy of a thread in itself but...

Wonder if PL clubs are trying to tie this to extra revenue.

Wonder...wonder!? I'd say it's absolutely certainly part of the "package".

It's also bollocks.

This in particular is mega-bollocks "There is also an appetite for EFL clubs to commit to housing a certain number of loan players from the top flight at any one time, although it is not clear how this would be enforced.".

SecondTier pod are ok and I don't think they'd tweet something they hadn't verified, but what's the reputation of "FootballInsider"? Are they actual journalists or just fishing for clicks?

[Mr Popodopolous]

4 minutes ago, ExiledAjax said:

Wonder...wonder!? I'd say it's absolutely certainly part of the "package".

It's also bollocks.

This in particular is mega-bollocks "There is also an appetite for EFL clubs to commit to housing a certain number of loan players from the top flight at any one time, although it is not clear how this would be enforced.".

SecondTier pod are ok and I don't think they'd tweet something they hadn't verified, but what's the reputation of "FootballInsider"? Are they actual journalists or just fishing for clicks?

Football Insider is hit and miss, seems alright for financial related issues.

The price itself wasn't so well written, think what thst bit means is an appetite from PL clubs for EFL clubs to do this, doubt there is a great appetite from EFL clubs however.

Sure this sort of thing was mooted a while ago, a big NO hopefully.

[ExiledAjax]

3 minutes ago, Mr Popodopolous said:

Football Insider is hit and miss, seems alright for financial related issues.

The price itself wasn't so well written, think what thst bit means is an appetite from PL clubs for EFL clubs to do this, doubt there is a great appetite from EFL clubs however.

Sure this sort of thing was mooted a while ago, a big NO hopefully.

Yeh it comes up every now and then. It's the start of B teams and multi-club ownership within a single country. If the EFL has any dignity at all then they have to resist it in every way they can.

[Mr Popodopolous]

3 minutes ago, ExiledAjax said:

Yeh it comes up every now and then. It's the start of B teams and multi-club ownership within a single country. If the EFL has any dignity at all then they have to resist it in every way they can.

Has to be done. Line in the sand, very much a hard no- yeah thin end of the wedge as you say.

[cidered abroad]

46 minutes ago, Mr Popodopolous said:

Dunno if it's worthy of a thread in itself but...

Wonder if PL clubs are trying to tie this to extra revenue.

They flood the four leagues from Championship to National league with young kids who are earning thousands of £'s a week and who would pay these wages?

Of course the greedy barstewards would expect the club to contribute a big percentage. That would do wonders for the team spirit with possibly one 19 year old earning more than the rest of the squad collectively. 

What a brain dead idea. No benefit to those clubs who are forced to use Premier loaners.

 

[Mr Popodopolous]

1 minute ago, cidered abroad said:

They flood the four leagues from Championship to National league with young kids who are earning thousands of £'s a week and who would pay these wages?

Of course the greedy barstewards would expect the club to contribute a big percentage. That would do wonders for the team spirit with possibly one 19 year old earning more than the rest of the squad collectively. 

What a brain dead idea. No benefit to those clubs who are forced to use Premier loaners.

 

I hope the 72 collectively tell them what they can do with this concept.

[chinapig]

The White Paper has been delayed again.

https://www.bbc.co.uk/sport/football/64539586

[ExiledAjax]

23 hours ago, chinapig said:

The White Paper has been delayed again.

https://www.bbc.co.uk/sport/football/64539586

Presumably because of the reshuffle. Donelan moving to Head of IT and Lucy Frazer coming in to head a "slimmed down" DCMS. I imagine Frazer would want to get her feet under the desk before heading up something as big as the Whitepaper. Hopefully it is just that rather than a radical redraft, as the leaked version looked pretty positive.

[Bristol Rob]

Isn't the white paper due out this week?

[ExiledAjax]

11 minutes ago, Bristol Rob said:

Isn't the white paper due out this week?

It is expected this week yes. The only thing really holding it up now is finding time in the Ministers' diaries for an announcement. I have heard that Sunak wants to be personally part of the announcement, so his diary needs to be considered as well. But yes I heard last week that it was expected to be this week.

[ExiledAjax]

So, the White Paper is here. You can read it here: https://www.gov.uk/government/news/bold-plan-to-protect-long-term-future-of-english-football

Headline summary features of the Government's plans are:

• New independent regulator to help prevent repeat of financial failings seen at Derby County, Bury and Macclesfield Town;
  • Clubs in the top 5 divisions will need to obtain a license form the regulator prior to competing in domestic competitions;
• Strengthened owners’ and directors’ test to protect clubs and their fans from unscrupulous owners
  • this will run in parallel to, and will not replace, the current PL and EFL tests.
  • There isn't much suggestion that it will include any moral or ethical test of owners, so it may simply be an extension of the current objective tests we have;
• Fans given greater say in running of clubs, and key heritage such as team names, badges and stadia at core of new plans; and
  • No real say as to how this might happen, but given the White Paper essentially agrees with the original Review, and that Review strongly recommended Golden Shares, I suspect that is the route that the Regulator will expect clubs to take;
• Powers to block English clubs from joining unpopular breakaway leagues like the European Super League.

All good, and all expected, and all without any real substance.

On finances the position remains that football is to sort the distribution out itself. However, if the football authorities cannot reach an agreement the regulator would have targeted powers of last resort to intervene and facilitate an agreement as and when necessary. So I don't expect a solution to the financial distribution any time soon. That's a shame, but I think ultimately the backstop powers will be used, perhaps not immediately, but at some point in the next few years.

I was posting yesterday about governance in relation to Scudamore's role at our Club. governance is going to be a big part of the new regulator's powers. The regulator will have a remit to ensure club directors demonstrate good basic financial practices, have appropriate financial resources and protect the core assets of the club and will aim to improve governance through the introduction of a Football Club Corporate Governance Code. So we should be looking to be absolute certain that our governance is up to scratch.

[Hxj]

In my view the whitepaper is a perfect example of governmental white-wash.  It's full of 'ifs', 'buts' and 'maybes'.

 

[Mr Popodopolous]

What I am wondering is how this white paper if implemented as planned, dovetails with existing EFL financial regs.

For example, a sustainable Business Plan seems likely to be required- but how does that fit in with losing £39m  adjusted losses over 3 years?

Granted we will probably be moving towards the 90-80-70 pct of turnover for football and amortisation as the replacement for P&S but surely by definition if an owner needs to put in anything at all, be it cash or revenue then the business isn't altogether sustainable? In the course of ordinary business I mean, not post Covid, or loss of a big sponsor etc.

Especially cash in the above paragraph. Revenue snd profitability can be a bit of a red herring..

Escrow 2-3 years in advance?

Of course there would also hopefully be a notable redistribution of how wealth is spread, which would resolve many issues.

Edited February 24, 2023 by Mr Popodopolous

[ExiledAjax]

5 minutes ago, Mr Popodopolous said:

What I am wondering is how thus white paper if implemented as planned, dovetails with existing EFL financial regs.

For example, a sustainable Business Plan seems likely to be required- but how does that fit in with losing £39m  adjusted losses over 3 years?

Granted we will probably be moving towards the 90-80-70 pct of turnover for football and amortisation as the replacement for P&S but surely by definition if an owner needs to put in anything at all, be it cash or revenue then the business isn't altogether sustainable? In the course of ordinary business I mean, not post Covid, or loss of a big sponsor etc.

Escrow 2-3 years in advance?

It will sit alongside any league rules around financial sustainability. Whether the current rules or some future system, this will compliment it. The White Paper says that any Regulator requirements will be coordinated with pre-existing financial rules to minimise the potential compliance burden on clubs and deliver a system which allows the Regulator to fulfil its statutory duties.

The WP also goes at lengths to say that the first step ibn any enforcement by the Regulator will be made on an "advocacy" basis. Essentially that means that should the Regulator think a club is potentially non-compliant, the first step is to work with the club on a collaborative basis, to seek to "sort out" any defects. The WP describes this as engaging constructively with regulated parties, resolving issues and encouraging compliance through advice, soft influencing and informal engagement.

On financial regulation specifically the White Paper says as follows:

1. Financial sustainability regulation would be the Regulator’s core focus, delivered through the first licence condition: ‘appropriate resources’. It would be based on improving financial resilience, to protect the long-term sustainability of clubs for the benefit of their fans and communities.
2. Clubs would be required to:
   1. demonstrate good basic financial practices;
   2. have appropriate financial resources or ‘buffers’ to enable the club to meet cash flows including in the event of a financial shock; and
   3. protect the core assets and value of the club - such as the stadium.

"Appropriate resources" is a key phrase used throughout the WP. It means that the club must have adequate financial and non-financial resources and controls in place, to meet committed spending and foreseeable risks. Demonstrating this to the regulator would include planning for adverse circumstances - including relegation and the withdrawal of owner funding. Also the WP says that the Regulator will make objective, risk-based decisions on what constitutes adequate financial resources according to each club’s specific circumstances and its risk level. If a club lacks sufficient resilience, the Regulator may require the club to improve its financial resources, such as by building up its readily available liquid assets or seeking greater assurances on owner funding. So yes escrow sums, owner bonds, or simple "rainy day" funds may be required - but it will be quite specific to each club.

Stadiums will be quite closely protected, with sales of stadia needing prior written approval from the Regulator.

On debt the WP says that the Regulator would be able to place controls on excessive debt where it could threaten the viability or value of the club. The Regulator would determine the appropriate limits and controls when setting that club's Specific Licence Conditions. They expect that these limits may need to be waived in exceptional circumstances, if agreed with the Regulator in advance. For example, a high-interest loan might be the only way to help a club survive to the start of the next transfer window, when players could be sold, debt repaid, and the club downsized.

The WP gives a broad example of how this might work in practice:

In general there's quite a clear ambition to make the licenses issued to clubs, and the conditions needed to be complied with, quite specific to each club. There will only ever be (subject to league structure changes) 116 regulated entities. That's a very small number compared to most industries. I think the intention is that this will allow a fairly small team of people to have quite involved and intensive supervision of these entities.

[Kid in the Riot]

I think the White Paper is really encouraging, the Fan Engagement and Club Heritage section in particular. Long overdue mind.

[Mr Popodopolous]

Grounds for cautious optimism? Maybe it could hasten a better redistribution than we currently have.

One thing that could be done is pool Parachute Payments with Solidarity into one pot and distribute accordingly- that would smooth the gaps in the Championship for one. That's a starting point, an easy win.

I can understand more easily the PL concerns about wider redistribution but it's all PL money anyway the Parachute Payments and Solidarity Payments, should have been done when Covid hit.

Edited February 26, 2023 by Mr Popodopolous

[Mr Popodopolous]

https://news.sky.com/story/premier-league-offers-efl-30m-a-year-sweetener-to-seal-football-new-deal-12839581

The offer of extra revenue up from £95m to £125m. In conjunction with better cost controls.

If we pool Parachute Payments and Solidarity Payments and distribute by divisional weightings- a mechanism that I have suggested for a while this could see a significant smoothing of the cliff edge. The question is would the PL do this or more accurately would PL clubs vote for this.

[ExiledAjax]

In the latest edition of "Shit try and look busy or someone will ask us about the money" we see that the PL has introduced some additions to its Owner's and Director's Test. The headline parts are changes are aimed at political owners and those who've shat all over various human rights.

However perhaps more interestingly we also see changes to widen the types of insolvency that bar you, widen the list of other regulators that being barred from will bar you, and allowing the league to stop you being an O/D where you are under investigation for conduct that would result in a ‘Disqualifying Event’ if proven. That last one is good as currently you're only barred if you have an unspent conviction.

Generally quite good extensions, and its almost certain that the EFL will follow suit shortly.

Full PL statement here:

Premier League clubs unanimously approved a number of changes to the League’s Owners’ and Directors’ Test (OADT) at a Shareholders’ Meeting today.

Following a comprehensive review of the OADT, and consultation with clubs and a range of stakeholders, clubs agreed the following Rule amendments and reforms to the OADT assessment process, which will come in with immediate effect:

Decisions taken by the Premier League Board under the OADT will be subject to review by a new Independent Oversight Panel

The threshold for ‘Control’ will be lowered to 25 per cent from 30 per cent

Club Chief Executives to be brought within scope of the OADT, as will a new concept of ‘Relevant Signatories’, being individuals responsible for signing a range of key regulatory documents

Owners’ and Directors’ Declaration form (Form 4) to be tailored to address individual and corporate directors

A range of new Disqualifying Events have been added to the test, including:

- A new Disqualifying Event for individuals/companies subject to Government sanctions

- A new Disqualifying Event for human rights abuses, based on Global Human Rights Sanctions Regulations 2020

- Extending the list of criminal offences resulting in disqualification, to include offences involving violence, corruption, fraud, tax evasion and hate crimes

- Extending the list of regulatory authorities, suspension from which will result in disqualification, to include the Charity Commission, FCA, Prudential Conduct Authority, HMRC and Gambling Commission

- Broadening the scope of the insolvency provisions, to enable the League to take action against individuals involved in previous insolvencies in a wider range of circumstances

- A new power for the League to stop those who wish to become ‘Directors’ where they are under investigation for conduct that would result in a ‘Disqualifying Event’ if proven

Greater clarity and transparency over the due diligence to be conducted by the League on a takeover, with an agreed, published list of ‘Acquisition Materials’ that must be provided to the League to facilitate its due diligence

Additional annual due diligence to be undertaken by the Premier League on incumbent Directors to ensure ongoing compliance with the OADT

A range of increased transparency measures, including the requirement to publicly disclose individuals/companies disqualified under the OADT and an obligation on the League to create an annual report of compliance

Following the adoption of these measures, the League will now consult with its clubs and other stakeholders on a further, final package of reforms, to be considered by clubs at the League’s AGM in June.

[chinapig]

On the human rights front it reads to me that it applies to individuals not states, subject to clarification from the PL. If so somebody who did not personally, for example, murder a journalist would not be barred even if they held a position of power in the state concerned.

https://www.bbc.co.uk/sport/football/65128593

From this BBC report:

"[The] Global Human Rights Sanctions Regulations are already the law of the land so this is nothing new," said Crouch in response to the Premier League's announcement.

"Improvement always welcome but still don't go as far as white paper."

Amnesty UK's economic affairs director Peter Frankental added: "It'll make little difference unless powerful individuals linked to serious human rights violations overseas are definitively barred from taking control of Premier League clubs and using them for state sportswashing.

"Would, for instance, a future bid involving Saudi or Qatari sovereign wealth funds be blocked by this rule change? It's far from clear that they would."

[ExiledAjax]

42 minutes ago, chinapig said:

On the human rights front it reads to me that it applies to individuals not states, subject to clarification from the PL. If so somebody who did not personally, for example, murder a journalist would not be barred even if they held a position of power in the state concerned.

https://www.bbc.co.uk/sport/football/65128593

From this BBC report:

"[The] Global Human Rights Sanctions Regulations are already the law of the land so this is nothing new," said Crouch in response to the Premier League's announcement.

"Improvement always welcome but still don't go as far as white paper."

Amnesty UK's economic affairs director Peter Frankental added: "It'll make little difference unless powerful individuals linked to serious human rights violations overseas are definitively barred from taking control of Premier League clubs and using them for state sportswashing.

"Would, for instance, a future bid involving Saudi or Qatari sovereign wealth funds be blocked by this rule change? It's far from clear that they would."

It will presumably apply to whoever is the "Relevant Person". Essentially the person who owns the 25% (new threshold) of the shares. As, officially, none of the current clubs are owned by states, rather individuals with links to states,* yes it probably wouldn't block a purchase unless that individual had or was under investigation for, personally breach(ing) said human rights rules.

It's better, but it's still all far from good enough really.

*Links like being the deputy PM of the UAE in Man City's case. You know, just a small link.