Even though it was introduced by the previous government, the Football Governance Bill – which MPs passed yesterday and will create an Independent Football Regulator (IFR) – attracted strong opposition. Critics say that a regulator will damage the innovation so critical to making English football (especially the Premier League) such a powerful economic generator for the country. Fears of over-regulation and its effects are well grounded, but there are aspects of what the regulator could do that actually serve to strengthen markets and improve the property rights of brand owners. It is these that should be focused on in determining the proper scope of regulation.
We have developed an economic model that tracks three pillars that drive GDP per capita growth. That model (the Anti-Competitive Market Distortions or ACMD model) is based on Property Rights protection (PR), Domestic Competition (DC) and International Competition (IC). Anything that improves a country’s pillar scores will lead to GDP per capita gains. Not all regulation damages those pillar scores, only anti-competitive regulation.
The new regulator, if it serves to ensure financial soundness of individuals who buy clubs, will actually strengthen domestic competition and property rights. Over the past decade Bury, Macclesfield, Wigan, Derby and other clubs collapsed into administration under owners who lacked either capital or transparency, or both. Those failures destroy more than balance sheets: they wipe out community identity, eliminate local jobs and push cautious investors to safer leagues. The underlying distortion is obvious. A club can be purchased without an objective test of solvency or integrity, leaving supporters and creditors hostage to a single over-leveraged individual. The PR score is compromised because asset control can pass to parties unable to honour debts, while the DC score suffers because prudent clubs must compete against rivals financed by opaque, high-risk leverage, which ultimately weakens inter-club rivalry.
The IFR could fix that distortion. Every club in the top five tiers would need an annual licence keyed to two requirements: balanced budgets and a clean “fit and proper” assessment for controlling shareholders. Criminal convictions for fraud or bankruptcy anywhere in the world would bar ownership. Directors who breach the rules could be removed, and chronic offenders forced to sell. What the regulator should not do is cap transfer spending, set wage bills or mediate tactical decisions. Its remit should be gatekeeping, nothing more.
The case of Ebbsfleet United shows why this matters. In 2013, the National League club was bought by Kuwaiti businessman Dr. Abdulla Al Humaidi, best known for pursuing a £2.5 billion ‘Dartford Disneyland’ project. The project collapsed, and in 2023 a London court declared Al Humaidi bankrupt. Multiple fraud and money laundering allegations in Kuwait subsequently came to light. A UK judge also found him to be acting in breach of his bankruptcy by continued involvement in business dealings. He stepped down as chairman, but ownership remained in his family company and two close relatives took board seats. Under the IFR, Al Humaidi’s purchase would have failed at the first hurdle and the regulator could today compel a genuine change in ownership. That single intervention would raise the club’s PR score and improve DC across the league, because rivals would no longer compete against a team fuelled by speculative, non-transparent money.
Libertarians counter that markets punish bad owners eventually. Yet punishment after collapse is too late, especially given the roles football clubs play in their communities. Nor can markets price risks they cannot see. Screening before control changes hands is therefore a prerequisite for price discovery, not paternalism. Far from scaring away capital, credible rules lower borrowing costs and attract serious investors who prefer transparent competition. American private-equity funds, Middle Eastern sovereigns and media conglomerates already comply with stringent tests in other industries. They will welcome identical clarity in football, secure in the knowledge that rivals face the same bar.
Some rightly worry about ‘mission creep’, so it is important that the IFR is restricted. The regulator should only address ownership and solvency, act proportionately and publish clear criteria.
Our ACMD model also predicts that stronger domestic competition will raise international performance. Clubs protected from sudden insolvency can invest confidently in youth academies, stadium upgrades and global marketing. Sponsors, assured that league membership will not evaporate mid-season, will bid more aggressively for rights. Just as patent rights for pharmaceuticals protect the intellectual property right in the pipeline of research into new drugs, so financial soundness ensures that clubs can build those elements necessary to ensure brand strength.
The IFR should also streamline financial reporting for lower-league teams, cooperate with UEFA to avoid duplicate paperwork and embrace solutions to keep costs minimal. Clubs that already operate prudently will pass the test with minimal paperwork.
Property Rights secured, Domestic Competition sharpened and International Competition poised to gain: a regulator that simply screens out bankrupts and fraudsters lifts two ACMD pillars and leaves the third intact. That is not bureaucracy for its own sake, but corrective infrastructure for a billion-pound ecosystem. The market’s liberty rests on clear ground rules; the IFR must operate in such a way that provides these with the lightest possible touch.
