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A new independent football regulator will have powers to vet owners, scrutinise club finances and block English teams from joining breakaway competitions, under plans to be unveiled on Thursday by the UK government.

The body, which will be enshrined in law, will aim to put financial sustainability at the centre of men’s football by forcing clubs to show that they have “sound business models” and “good” corporate governance for approval to compete.

Ahead of the publication of the government’s football white paper, prime minister Rishi Sunak said its proposals would “put fans back at the heart of football” and “safeguard” the sport for future generations. 

The creation of the regulator was one of several recommendations presented to the government in the Fan-Led Review of Football Governance, which was published in November 2021 and led by the then sports minister Tracey Crouch.

The review also called for a new approach to corporate governance, improvements to equality and diversity, and greater financial regulation at clubs.

Under the plans to be announced on Thursday, club owners and directors will be subject to new tests and “stronger due diligence” on their sources of wealth.

The Premier League, which has previously argued against the need for a regulator, said it “recognise[d] the case for change in football governance” but warned against any moves that might erode its position as football’s richest club competition.

“It is vital that regulation does not damage the game fans love to watch . . . or its ability to attract investment and grow interest in our game,” it said.

The English game is famed for its “pyramid” system, whereby clubs can rise and fall as they compete to reach the top division. But the financial gap between the top flight and the rest has led to calls from the English Football League, which runs the three divisions below the top tier, for the Premier League to share more of its income with less well-off sides.

Although the government would prefer the leagues to agree on the future financial distribution of the Premier League’s revenue by themselves, the watchdog would have “last-resort” powers to intervene if a deal could not be struck.

The collapse of historic clubs such as Bury in 2019 and Macclesfield Town in 2020 led to calls for stricter regulation of the sport. Other clubs, such as Derby County, have had near misses after running into financial difficulties.

Those calls gained ground after six top clubs — Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur — attempted with a wider group of European teams to set up a breakaway European Super League in April 2021.

That version of the ESL rapidly collapsed after protests from fans and criticism from then prime minister Boris Johnson, prompting the launch of the fan-led review.

Ministers responded to the Crouch review in April last year, but the white paper was delayed amid government turmoil sparked by the demise of the Johnson and Liz Truss premierships. 

In the meantime, several leading clubs have changed hands. US investors Todd Boehly and Clearlake Capital acquired Chelsea from sanctioned Russian oligarch Roman Abramovich for £2.5bn in May last year, while new owners have arrived at AFC Bournemouth. The Glazer family has also initiated a process to explore the sale of Manchester United

The white paper comes less than two weeks after the Premier League accused Manchester City, the champions, of breaking financial regulations over a number of years. The club denies all wrongdoing.

The EFL welcomed the plans, calling them “a landmark moment for the future of our game”.

“Going hand-in-hand with financial reform, the League is supportive of proposals relating to enhanced regulation and looks forward to consulting with government on matters including club licensing, the owners and directors test and heritage protection in the period ahead,” it said.

 

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