LONDON

Following a slew of controversies regarding acquisitions, new tournament plans, and allegations of financial rule-breaking, the United Kingdom government confirmed plans on Thursday to establish an independent regulator to oversee soccer clubs.

Clubs that do not meet certain requirements, such as “breakaway, closed-shop” leagues, will be barred from participating in tournaments by the regulator.

It comes after plans for a new European Super League in 2021 were met with widespread opposition from fans. Due to the extent of the backlash, the venture, which was seen as a way for major clubs to increase revenue through guaranteed participation in an international tournament, collapsed shortly after it was announced.

The new body’s confirmation was leaked, but a government report confirmed it on Thursday.

“stronger due diligence on sources of wealth and a requirement for robust financial planning” are two additional ways in which the government wants to intensify the screening process for club owners.

Human rights groups have previously demanded that potential owners of Premier League clubs be investigated. It follows the securing of Newcastle Joined in 2021 by Saudi Arabia’s sovereign abundance store. Currently, prospective owners who have violated major football regulations or have been convicted of a felony are out of the running.

The government, on the other hand, stated that the new regulator will concentrate on financial checks, which will be “aimed at identifying links to criminality or corruption.”

It was described as “the most radical overhaul of football governance since the rules were first invented in a London pub back in 1863,” according to U.K. Member of Parliament Stuart Andrew in the House of Commons on Thursday.

In addition, the regulator will be responsible for ensuring that clubs at all levels, from the Premier League to the National League, demonstrate a sustainable business model. As part of this process, club owners will need to apply for a competition license. It comes after financial difficulties at Derby County, Bury, and Macclesfield Town, among others.

The so-called “pyramid” of English soccer, through which any club can theoretically ascend or descend, will also be examined to ensure that money flows from the Premier League.

Andrew stated that soccer is “more than just a sport” in England. However, he emphasized that the professional game was plagued by “systemic issues,” as demonstrated by the fact that 62 clubs had gone bankrupt since the Premier League was established in 1992.

Andrew stated, “All too often we hear of flagrant financial misconduct, unsustainable risk-taking, and poor governance driving clubs to the brink.” This would result in the dissolution of long-standing communities and damage to the economies of the surrounding area.

The new rules will also require fans to have more input and, potentially, veto power over important club decisions regarding stadiums, badges, kit colors, and renaming.

Manchester City, the Premier League’s top team, was accused earlier this month of repeatedly violating its financial rules, particularly by failing to accurately declare revenue and manager and player compensation. It has forwarded its findings for review to an independent commission.

At the time, the club said that it was surprised by the news but welcomed the investigation to put the matter behind it.

The Premier League has publicly stated that it wants to strengthen its own independent regulation, contradicting previous reports that it opposes having an independent regulator.

It acknowledged the “case for change in football governance” and called the white paper a “significant moment” for English football in a statement released on Wednesday.

“Guideline should doesn’t harm the game fans love to watch in the most profound expert pyramid on the planet, or its capacity to draw in speculation and develop interest in our game,” the Head Association said.

In addition, it stated that it would collaborate with stakeholders to guarantee that any regulator would not “affect the Premier League’s position as the most-watched football league in the world, reduce its competitiveness, or put the unrivaled levels of funding we provide at risk.”

monetary problems

Senior analyst Daniel Harraghy of Ampere Analysis made the observation that during the most recent January transfer window, clubs in the Premier League spent more than three times as much as all of the other big five European leagues put together.

In an email to CNBC, he stated, “Clubs may argue that regulations applying restrictions on their ability to acquire leading talent will impact the league’s position as the most attractive competition with the highest quality of players.”

He went on to say that, despite having a high turnover rate, a lot of soccer teams in the United Kingdom, and Premier League teams in particular, were still making operating losses year after year.

He stated, “Clubs are investing heavily beyond their means further down the pyramid, where income is much lower, gambling on promotion to higher leagues with greater financial reward.” While proprietors can cover these misfortunes temporarily, it makes a temperamental plan of action where the degree of expenditure becomes unreasonable and clubs are put under huge monetary strain.”

“A large number of football clubs will need to make some significant changes to their business models and spending habits to ensure long-term profitability.”