UK Law and Practice Contributed by: Jamie Singer and Flora Peel, Onside Law
formality and cost associated with operating as a company. 4.2 Corporate Governance While there are no existing governance laws that apply exclusively to sports organisations in the UK, there are a number of published codes, regulatory frameworks and applicable laws that, together with public scrutiny, encourage and/or require good governance. As sport evolves into a multibillion-pound industry, there is increasing pressure on sport bodies at all levels to demon - The Code for Sports Governance (the “Code” ), published by UK Sport and Sport England in 2017, accelerated better corporate governance of sporting bodies. The Code sets out certain governance requirements under five principles (structure, people, communication, standards and conduct, and policies and processes). Cru - cially, sports organisations must satisfy the rel - evant requirements in order to receive central public funding. A revised Code was published in December 2021, with a focus on governing bod - ies developing a diversity and inclusion action plan, as well as increasing welfare and safety in sport. strate good corporate governance. Sport-Specific Governance Codes The Sport and Recreation Alliance (the umbrella body for sport and recreation in the UK) has also produced a Voluntary Code of Good Gov - ernance, setting out seven principles of good governance that it recommends sports bodies should implement in order to perform their role effectively. Owners’ and Directors’ Tests Several sports bodies in the UK, notably the three main English football governing bodies – the Football Association (FA), Premier League
and English Football League (EFL) – have each established an Owners’ and Directors’ Test (ODT). ODTs seek to protect the image and integrity of the relevant league, as well as the interests of its other stakeholders, by preventing unsuitable individuals from becoming an owner or a direc - tor of a club. The ODTs are a prominent feature of football in England and regularly make the sporting head - lines due to their controversial nature. For exam - ple, the following came to light in recent years. • The Saudi Arabian Public Investment Fund (PIF), together with PCP Capital Partners, acquired Newcastle United FC for a reported GBP300 million. The deal had initially fallen through in July 2020, seemingly due to the acquirers’ failure to comply with the Premier League’s ODT. With disputes continuing in the background, it was finally announced in October 2021 that PIF, PCP Capital Partners and RB Sports & Media had completed the acquisition of the club, with PIF holding an 80% stake. Due to PIF’s close ties with the Saudi Arabian government, and human rights concerns regarding that government, the takeover was only allowed after the Premier League received assurances that the club would not be under Saudi Arabian control. • The adequacy of the EFL’s ODT is also in the spotlight due to events at Reading FC, cur - rently in League One (the third level of English professional football). The club recorded pre- tax losses of GBP146 million over five years. The EFL has a set limit of GBP13 million pre-tax losses annually, accumulating GBP65 million maximum over five years. Reading’s losses were more than double this threshold,
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