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British Prime Minister Rishi Sunak confirmed plans for an independent football regulator to safeguard the future of English soccer clubs in his King's Speech on Tuesday.
The Independent Regulator for Football (IREF) will have the power to step in to address cash flow and other systemic issues within clubs, many of which are financially vulnerable.
"Legislation will be brought forward to safeguard the future of football clubs for the communities and fans," King Charles said of the Football Governance Bill in his speech.
A separate government briefing document said the fragility of the English footballing pyramid had been exposed in recent years.
"The collapse of Bury FC, the devastating impact of the pandemic on clubs, and the botched plan for a breakaway European Super League have all revealed the financial unsustainability of some clubs and the need for more accountability for fans," it said.
The Regulator will operate a licensing system which will apply to the top five tiers of English men's football with the power to act on issues including financial regulation compliance, corporate governance and fan engagement.
More stringent tests will be made on club owners, minimum standards of fan engagement will be introduced and clubs will not be allowed to join breakaway or unlicensed leagues.
Fair Game, a band of clubs campaigning to improve football governance, described the announcement as an "historic moment for football".
"It represents a real chance to end the cycle of overspending and mismanagement that has plagued our National Game and threatened the very existence of our clubs," Fair Game CEO Niall Couper said in a statement.
"Right now clubs like Sheffield Wednesday, Reading and Scunthorpe United are staring into the abyss.
"Reckless spending, disconnect between clubs and their communities, and lip service to equality standards must be consigned to the rubbish bin of history," he added.
"This transformation can only be achieved if the regulator has the teeth and resources to deliver."
English Football League Chairman Rick Parry called it a "landmark commitment" that will help ease the threat of supporters losing their clubs altogether.
"The football pyramid matters. It is a unique strength of the English game and something that must be protected and nurtured," Parry said.
Sports Minister Tracey Crouch, who stressed an independent regulator was crucial in her Fan-Led Review of Football Governance published last year, said she was "delighted" it was mentioned in the King's Speech.
"On the pitch, England football is admired the world over, but it is important that measures are put in place to ensure our national game is fit for the future, which is exactly what the Independent Regulator will do," Crouch said in a statement on X, formerly Twitter.
The briefing noted the Premier League's success globally, attracting more viewers and higher revenues than any of its international rivals in the 2021-22 season. The league's aggregate revenue was 5.5 billion pounds ($6.8 billion) compared to 2.8 billion pounds for Spain's LaLiga.
Clubs, however, are consistently losing money and relying on external funding with their debt levels rising.
Since the 1999-2000 season, 19 out of 23 Premier League seasons resulted in pre-tax losses for all clubs combined. Across the Premier League and second-tier Championship, net debt increased to 4.4 billion pounds in 2022.
($1 = 0.8138 pounds)