By Will Grisley, of Birketts
In recent years, the financial landscape of English football has been shifting away from traditional lending streams, and the Football Governance Act 2025 (“FGA”) looks set to accelerate that trend.
The FGA, which received Royal Assent on 21 July 2025 and is coming into force incrementally, is intended to strengthen the sustainability and transparency of English football. Introduced with a view to improve the financial stability of clubs and to bring greater transparency of ownership structures, the FGA marks a significant regulatory overhaul.
The FGA establishes an Independent Football Regulator (“IFR”) and a mandatory licensing regime for clubs across the top five tiers of the men’s professional game.[1] The IFR’s statutory objectives include:
(a) to protect and promote the financial soundness of regulated clubs;
(b) to protect and promote the financial resilience of English football; and
(c) to safeguard the heritage of English football.
Section 46: IFR approval for home ground security
From a banking and finance perspective, section 46 of the FGA is particularly noteworthy. In broad terms, once section 46 is in force, clubs will need to seek IFR approval if they intend to dispose of, or create a security interest over, their home ground.[2] For the 116 regulated clubs that fall within its remit, the IFR will only grant approval if it is satisfied that the financial sustainability of the club would not be undermined by the proposed disposal or security.
The IFR will have the ability to refuse, revoke or attach conditions to licences for non-compliance of the approval process. While the IFR’s approach to exercising these powers remains to be seen, both clubs and lenders will need to factor this into any future financing arrangements.
The wider licensing regime
Beyond section 46, the FGA introduces a mandatory licensing regime for clubs in the top five tiers. To obtain and maintain an IFR licence, clubs must demonstrate sound financial planning, governance structures, and fan engagement. These requirements may influence lenders’ credit assessments and could lead to lenders imposing stricter controls on clubs in their debt facilities to ensure compliance with the licensing regime.
Practical implications for lenders and borrowers
IFR approval for stadium-related security creates risk for lenders who view the club’s home ground as a valuable asset that can be used as collateral. Clubs will need robust financial plans, and lenders will face enhanced due diligence obligations – both of which can increase cost and timing pressures. The government’s impact assessment estimated familiarisation costs to regulated clubs of £400,000 – £1.2 million and annual compliance costs of between £17.9 million and £35.8 million across the 116 clubs, highlighting the scale of the regulatory burden.
A lender taking (or relying on) stadium security will also want comfort that the club is able to grant that security without triggering licensing consequences. Once fully operational, it is reasonable to expect IFR approval to become an explicit condition precedent for any deal involving security over a home ground interest.
Football clubs operate in a uniquely volatile environment. Matchday revenues and income through broadcasting rights are seasonal and the inherent risk of relegation make cash flow critical. As financing arrangements are often an integral part of a club’s financial strategy, navigating the new requirements of the FGA will be an important factor in the selection of such financing arrangements going forward.
An alternative to traditional debt financing?
The question therefore arises: is there an alternative to traditional debt financing which may be less impacted by the FGA?
Receivables financing offers a potential solution.
Receivables financing is a financial arrangement that enables clubs to unlock immediate liquidity by selling rights to future income streams (at a discount) or borrowing against them. Transfer fees, parachute payments and sponsorship deals are often payable to clubs in several instalments. Through receivables financing, clubs can accelerate access to cash that would otherwise arrive over a number of years.
In a typical transfer scenario, the transfer fee is payable by the buying club to the selling club in multiple instalments. Receivables financing enables the selling club to assign its rights to the future income stream to a lender, with the lender paying the club an upfront amount at a discounted rate. The buying club would usually then be notified of the assignment, and payments of the transfer fee redirected to the lender, who would become the legal recipient of those payments.
While receivables financing is by no means a novel concept in football finance, this structure now presents an opportunity for clubs to alleviate some of the regulatory hurdles tied to stadium security and IFR scrutiny by using alternative collateral (an income stream) as security instead of physical assets such as the club’s ground.
Regulation of receivables financing
It is worth noting that receivables financing is not free from regulatory oversight. Such arrangements are regulated by the Premier League and English Football League. For example, both leagues only permit the assignment of transfer fee instalments to bodies classified as “Financial Institutions.”[3] While this restriction applies to transfer-related receivables specifically, the underlying policy intent is to prevent assignments to potentially unregulated lenders. Clubs will also need to satisfy the IFR’s broader financial sustainability requirements, which continue to apply to borrowing more generally through the licensing regime.
Conclusion
While the FGA seeks to protect and promote the sustainability of English football – a welcome introduction for many – for clubs and lenders, alternative financing strategies could soon take centre stage. In a sector where liquidity dictates success on and off the pitch, receivables financing may emerge as an increasingly attractive option.
Please do get in touch with your usual contact in the Banking & Finance Team if you would like to discuss any of these issues in further detail.
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At present, the statutory scope of the FGA is limited to the men’s professional pyramid and does not extend to the women’s game, although future regulatory expansion in this area remains a live policy discussion. ↑
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Section 46(1) FGA 2025. The provisions of the FGA are being introduced incrementally, and statutory instruments have brought certain parts of the FGA into force. At the time of writing/publication, section 46 has not yet come into effect. Section 46 is expected to be brought into force alongside the IFR licensing regime later in 2026, but there is currently no confirmed or published commencement date. ↑
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Defined in 2025/26 EFL Regulations (Regulation 1.1) and Premier League Handbook 2025/26 (Rule A.1.109). ↑
