What powers can the Independent Football Regulator use against Manchester City?

An independent commission has ruled that Manchester City is guilty of a swathe of breaches of the Premier League’s financial rules, as well as a raft of non-cooperation charges. Most notably, the commission found that sponsorship arrangements represented “sham” contracts disguising owner investment which artificially inflated the club’s sponsorship income by hundreds of millions of pounds. This enabled the club to spend more money than it otherwise could, while remaining in compliance with the Premier League’s spending limits. Manchester City continues to deny the charges, saying that it has “irrefutable proof” of its innocence. Sanctions will be determined by a separate panel, pending appeal.

However, that may not be the end of the matter. The Independent Football Regulator (IFR) has released a statement saying that the decision “raises serious issues” and citing its powers to “assess the suitability of owners, directors and executives”.

The powers to which the IFR refers are set out in Part 4 of the Football Governance Act 2025. It may assess incumbent owners and officers of clubs where it “is in possession of information that gives it grounds for concern” about whether the owner or officer meets the “fitness criteria” that apply to owners and officers of clubs. Those criteria include a requirement to have the “requisite honesty and integrity” to be an owner or officer of a football club. The IFR must, in making this assessment, take into account a range of factors, including “whether the individual is or has been a party to proceedings (other than criminal proceedings) in any court or tribunal” and “any action of a regulatory or disciplinary nature that is being or has been taken in relation to the individual.” The Act also gives the IFR the power to issue rules on this issue and, interestingly, it has done so. It has added to the list of factors relevant to an “honesty and integrity” assessment, which includes:

• “whether the individual, or a sporting entity where they are or have been a controller or in a position of responsibility, has:
  • been the subject of disciplinary or enforcement action by any sporting authority or competition organiser, or
  • failed to comply with a direction, order, or other requirement set by any sporting authority or competition organiser
• whether the individual, or a sporting entity where they are or have been a controller or in a position of responsibility, has:
  • misled the IFR, a competition organiser, or other regulatory body, or
  • not been open and co-operative with the IFR, a competition organiser, or other regulatory body.”

In reaching a decision on this question, the IFR must take into account any determination that has been made either by the relevant competition organiser (for example, the Premier League) or that the IFR otherwise considers relevant to its determination (which might include the independent commission). 

If the IFR finds that such a person fails to meet the criteria, then it can issue (among other things):

• A “disqualification order”, which disqualifies the person from being an owner or officer of a club.
• A “removal direction” under which the owner or office must take all reasonable steps to cease to be an owner of the club. In the case of officers, the IFR can direct the club itself to remove the officer.

The IFR has supplementary powers to reinforce these powers in the event of non-compliance.

These rules are plainly relevant to Manchester City’s case and the IFR will need to consider whether it plans to utilise these powers.

The independent commission’s decision also comes at an interesting time for the licensing regime. As a reminder, all clubs will require a licence from the IFR to operate a team. The application window for licences opens in November. There are no licensing conditions which specifically pertain to the suitability of owners and officers, but the IFR has the power to impose discretionary conditions on licences given to football clubs. Additionally, clubs are required to demonstrate that they have adequate financial resources to operate their clubs. It remains to be seen what impact, if any, the independent commission’s decision has on Manchester City’s current finances and whether they would impact on any assessment as to City’s satisfaction of the licensing conditions.

It is unavoidable that the IFR will need to tackle the Manchester City issue in one way or another. It will be fascinating to see how it approaches the case, both through the licensing regime and in the exercise of its wider powers.

If you require advice on the Football Governance Act 2025 or the Independent Football Regulator, please contact Ben Thomas and Helen Fry.

The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice on which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please contact the Bates Wells team if you require further information.