New football regulator must be ‘watertight’ to survive club legal challenges

Football’s new independent regulator will need to be “absolutely watertight” in order to withstand legal challenges from clubs, according to the man set to lead it.

The English game has become increasingly litigious in recent times, with the Football Association’s accounts published last week identifying the threat of legal challenges as one of the principal risks and uncertainties it faces.

The Premier League has faced two challenges from Manchester City to its rules governing commercial deals, and from Leicester over its jurisdiction with regards to its profitability and sustainability rules (PSR).

The regulator will operate a licensing system for the 116 clubs in the top five tiers of English football with a principal remit to ensure clubs are run sustainably and are accountable to their fans.

David Kogan is set to chair the watchdog, having been identified as the Government’s preferred candidate last month, and addressed MPs on the Culture, Media and Sport committee on Wednesday about the challenges it will face.

“Every decision that is taken as a consequence of this (Football Governance Bill) by the regulator is going to have a multitude, no doubt, of potentially litigious clubs and lawyers looking at what we do,” he said.

“So we have to be absolutely watertight in what we do, but clearly we may have to bear costs of legal actions that we can’t forecast.

“You have to prepare for the worst. ‘Prepare for the worst’ in this instance will be there are very wealthy clubs, there is a very wealthy league.

“The regulator has to be geared up for legal challenge, and the way it does that is by doing its work properly and going through the full accountability process, by being as watertight as it can about what it’s seeking to do.

“And then, if you get legal challenge, you have to have the financing to be able to meet that legal challenge.”

The regulator will also have ‘backstop’ powers to impose a financial settlement between the Premier League and the EFL on splitting television revenue, should they be unable to agree one themselves.

However, Kogan – himself a veteran of negotiating TV deals for both those leagues and many others – says he hopes “rational thinking” will prevail.

“People talk about the ‘nuclear option’ of the backstop,” Kogan said.

“Actually, I prefer to think of it more of a sort of tactical weapon. You don’t use nuclear options, because if you do – well, you all die.

“I see (the backstop) as a tactical weapon, but it is one I would urge the world of football not to invoke.

“We have got time. There is probably at least a year where there is time for the world of football to agree (a deal) among themselves, and the more they agree among themselves, the less we have to be involved, I think the better.”

Kogan said it was right that parachute payments should form part of the ‘State of the Game’ review examining football’s financial flows, and that any analysis that did not include them would not “hold water”.

“They’re also relevant, I assume, to any future relationship between the Premier League and the EFL over any future distribution arrangements,” he said.

“So you absolutely have to include them as part of the analysis. What conclusion you reach in that analysis is too early to tell.”

He also said he could see a “series of fiscal cliff edges” in the football pyramid which he felt had become “sharper and more stark” in recent years.

He wants the regulator to operate a helpdesk to assist clubs, and wants it to be an “asset” to the game rather than football’s “cop”.

Kogan already faces calls from the Conservative Party for an urgent investigation after he revealed to MPs that he had donated to the campaigns of Prime Minister Sir Keir Starmer and Culture Secretary Lisa Nandy in the 2020 Labour leadership contest.

Labour have previously responded to accusations of cronyism regarding Kogan’s selection by pointing out he was also asked about chairing the regulator by the previous Conservative Government.