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English club owners will be required to inject funds, reduce debt or slash outgoings if they are deemed to be “high-risk” by the Independent Football Regulator.
Under new licensing proposals published today, clubs will have to demonstrate that they have the financial resources to withstand major shocks such as relegation or withdrawal of owner funding – or risk the “nuclear option” of being banned from competing.
IFR CEO Richard Monks insisted, however, that owners would not be told to sell players without exhausting other avenues for improving cash flow.
“We have three very strong powers to intervene,” he said. “The first one is about requiring the club to hold more liquid assets, the second is requiring to reduce debt, and the third, it is not a requirement to sell players, but it’s a requirement to reduce costs.
“We would always look to use the first two of those first, to say to the owners, ‘you’ve got to put some more funding in, because, frankly, you’re too high risk’, or ‘you need to reduce your debt because arguably, you’re too high risk’.
“But if we need to, we will use that third tool, which is about reducing their costs. Obviously, how they choose to do that is up to them.”
Owner background part of risk assessment
The new proposals follow feedback from an initial consultation last year, when the IFR formally began work. The licensing regime, designed to stop clubs going bust, will take effect from the 2027-28 season, giving clubs just over a year to finalise their preparations.
While the IFR will not have to consider the UK’s foreign policy when assessing the suitability of owners, Monks said it would assess any buyer’s risk profile as a result of their background.
“When we look at risk, we do look at the owner, we do look at funding. And as part of that assessment, we consider a very broad range of issues,” he said.
“For example, you have seen in the past with clubs, individuals who have been sanctioned, not necessarily by the UK Government, but by overseas government, and have been unable to fund the club for a particular period of time. We will be able to look at all of these issues.
“Almost the essence of our regime is that we can take that holistic assessment – and that includes the potential for that owner funding to be at least paused, if not totally stopped – and working with clubs to help them have a plan in place.”
Regulator already in talks over takeovers
The IFR will assume responsibility from the English Football League (EFL) for vetting club owners and directors from May so has asked for any takeovers and board appointments currently under discussion to be flagged by the end of this week.
That includes liaising with administrators over Arise Capital Partners, the US group named preferred bidder for financially stricken Sheffield Wednesday last week.
“We wrote to clubs earlier this month to formally require them to inform us of any ongoing discussions in terms of new owners coming in, or new directors being appointed,” said Monks.
“The reason we did that is that we don’t want a cliff edge. We don’t want an individual director or an owner to be 95 per cent of the way through the EFL process at the end of April – suddenly that ends, and our new process starts in May.
“Nobody wants that cliff edge, so we formally asked for that information from clubs. They have to provide that to us by the end of this week.
“Once we get that information in, we will start engaging with those prospective owners coming in, because yes, they might pass the EFL test and be in by the end of April but there’s a strong chance they won’t, and our test will apply.”
