New Licensing Regime

The Football Governance Bill will establish a licensing regime with all clubs required to obtain a licence to lawfully continue taking part in competitions specified by the Secretary of State.

There will be 2 types of operating licence: provisional and full. This two-stage structure recognises the importance of a transition period for clubs to familiarise themselves with the system and raise standards where necessary.

Clubs will first apply for a provisional licence, where they will need to provide some basic documentation. This includes a strategic business plan detailing financial information such as costs and sources of funding, and a personnel statement detailing the club’s owners and officers and their job roles. To obtain a provisional licence, clubs will need to demonstrate they are ready, willing, and able to comply with some core, baseline requirements - duties on all regulated clubs, and the mandatory licence conditions (see below).

By engaging appropriately with the IFR (Independent Football Regulator) and providing the necessary documentation, most clubs should be able to readily demonstrate this. The provisional licence will allow a club to continue operating while making progress towards meeting the higher standards required for a full licence. A provisional licence will apply for a maximum of three years initially, with the opportunity for extension if required.

In order to obtain a full operating licence, a club will need to satisfy the statutory test. This includes continuing to meet the freestanding duties, meeting the mandatory licence conditions, and meeting the higher, club-specific standards across three threshold requirements (financial resources, non-financial resources, and fan engagement). In addition, if any of the club’s existing owners and directors have been found unsuitable by the IFR and are still in post, it cannot grant the club a full operating licence.

Clubs will only need to initially apply for a provisional licence. Then, before the end of the provisional period, the IFR will assess a club for its full licence - the club will not need to actively apply for this. The ongoing approach to real-time monitoring and supervision of clubs will mean that once clubs are granted a licence, they will not need to re-apply for or renew their licence periodically. This should help minimise regulatory burden on clubs.

Provisional licence

Clubs must meet the following criteria to obtain a provisional operating licence.

Satisfy the IFR that it would comply with the “duties on regulated clubs” by:

• not playing in competitions that have been prohibited by the IFR
• notifying and obtaining the IFR’s approval before selling or relocating from their home ground or using their ground as collateral for a loan
• establishing the support of a majority of a club’s domestic fans before changing the crest or emblem and home shirt colours, as well as obtaining FA approval before any changes to club names
• keeping fans informed, as far as possible, of any developments in insolvency proceedings if the club is in administration
• providing an up-to-date personnel statement to the IFR identifying a club’s owners, directors and senior managers and their roles and responsibilities within the club
• informing the IFR of any material change in circumstances affecting the club that is relevant to the IFR’s functions
• gaining the approval of the IFR prior to the club appointing an administrator.

Satisfy the IFR that it will comply with the “mandatory licence conditions” by:

• submitting a financial plan to the IFR, detailing the club’s funding, revenues, financial risks and mitigations
• publishing a corporate governance statement showing how they are applying the Football Club Corporate Governance Code (this will set out corporate governance best practice for football clubs and will be published by the IFR following consultation with the FA and other relevant stakeholders)
• consulting a representative group of fans on issues of importance to the club such as club heritage and business priorities
• submitting an annual declaration to the IFR, including any material changes in circumstances or compliance over the past year

A provisional licence will allow the club to continue playing in the specified competitions for a fixed period of up to 3 years initially, with the possibility for the IFR to extend beyond this where necessary. Before the end of the provisional period, a club should reach the standard required to pass the test for a full licence.