On March 30, 2023, the Premier League unveiled a series of significant amendments to its Owners and Directors Test (OADT), thereby expanding its scope and impact. The revised version of the OADT was officially released on April 6, 2023, taking immediate effect. The OADT is detailed in Section F of the Premier League Handbook, governing individuals seeking ownership or directorship roles within Premier League clubs. This evaluation applies upon the occurrence of a control transfer or director appointment and remains an ongoing assessment.
The primary purpose of the test is to outline conditions under which a person is ineligible to become an Owner or Director of a football club. This discourse delves into the following areas:
**Novel Disqualifying Events**
The list of disqualifying events, catalogued in Section F of the Premier League Handbook, has grown from 18 items to 28 items. Several noteworthy new disqualifying events are as follows:
The range of criminal offences that result in disqualification has been significantly expanded. This encompasses convictions for various acts, including violence, fraud (including tax evasion, electoral fraud, bribery, and money laundering), corruption, perverting the course of justice, serious breaches of the Companies Act 2006, and hate crimes.
A person possessing an unsatisfied court order for monetary payment is considered disqualified.
Those subject to suspension, bans, or disqualifications imposed by specified UK regulatory bodies or equivalent entities overseas are ineligible. These include the Charities Commission, Ofcom, the Financial Conduct Authority, the Prudential Conduct Authority, the Gambling Commission, HMRC, or equivalent bodies.
Persons facing multiple suspensions, bans, or disqualifications from sporting, professional, or regulatory bodies are also ineligible.
Individuals removed as trustees of pension schemes or who contravened pension regulatory systems are disqualified.
Directors or Relevant Signatories of clubs or teams in other sports removed from leagues or competitions due to reasons other than relegation or sporting merit are disqualified.
Individuals associated with entities subject to UK sanctions are disqualified.
Persons subjected to potential disqualifying events are ineligible.
**Significant Adjustments to Existing Disqualification Events**
While some changes are not entirely novel, there have been material expansions to existing disqualification events, such as:
Individuals with two or more disqualifications, regardless of current status, are ineligible to be club Owners or Directors.
Exclusions for spent convictions regarding certain criminal offences have been removed if a person has been convicted of two or more such offences.
The list of insolvency events has grown to encompass a broader range of insolvency-related scenarios, such as if there is a new disqualifying event for a person who has been a Director (or equivalent) in at least two entities that have been subject to or suffered unconnected events of insolvency (or in a single entity which has been subject to or suffered two or more unconnected events of insolvency) in the immediately preceding ten years
The rule disqualifying Directors from clubs expelled from English football leagues now includes Relevant Signatories and covers a longer retrospective period which has been expanded to 12 months, instead of only 30 days.
**Fresh Procedures**
New procedural alterations accompany changes in club ownership control:
An Independent Oversight Panel will be instituted to review Director disqualifications and change of control determinations.
The Premier League Handbook now incorporates "Acquisition Material," required from potential club owners for control change approval.
Enhanced due diligence on existing Directors will be conducted annually to ensure OADT compliance.
The League will uphold a public Directors register.
An annual report will be published, outlining disqualifications of Directors in anonymized form.
The Premier League has also updated the definition of "Control" to include ownership of a 25% interest in a club (based on voting rights), although this change has yet to be included in the Handbook.
Despite the expansion of the list of disqualifying events, the author contends that it remains fundamentally a "tick-box" list. While there are areas involving some subjectivity, such as cases where the League's Board must determine whether an overseas activity would be deemed a criminal offence in the UK, the list essentially adheres to objective criteria. This approach simplifies management and avoids requiring the Premier League or the Independent Oversight Panel to make significant subjective judgments concerning potential owners or directors. The author ponders whether the League might eventually adopt a more subjective evaluation system for owners and directors, akin to what is seen in some US sports leagues such as the NBA Ownership tests laid out in Article 5 of the NBA Constitution and By-Laws, and explores the potential implications. However, the White Paper underlines the importance of maintaining an objective OADT.
The focal point of media coverage surrounding the revisions has largely revolved around the inclusion of human rights abuses as disqualifying events. Curiously, the term "human rights" is conspicuously absent from Section F. Instead, the prohibition related to human rights falls under the general sanctions provision, referencing the UK Sanctions defined in the Sanctions and Money Laundering Act 2018 and its associated regulations. One set of regulations under the 2018 Act is the Global Human Rights Sanctions Regulations 2020. Consequently, individuals/entities on the Global Human Rights Sanctions List are rendered ineligible for the OADT. However, it's crucial to note that this list is relatively short, featuring fewer than 100 entities/individuals at the time of writing. In contrast, the General Sanctions List encompasses around 4,000 entities/individuals, expanding weekly and posing challenges for delisting once listed. While being on these sanctions lists would have previously hindered individuals/entities from being Directors or Owners of Premier League clubs, the new disqualifying event streamlines the League's handling of sanctions applications for club-involved individuals.
Interestingly, the updated criteria do not include Politically Exposed Persons ("PEPs") in the disqualifying list. The White Paper does acknowledge the Independent Regulator's role in identifying PEPs. However, recognizing that not all PEPs pose equal risks to being directors or owners, particularly domestic PEPs, the White Paper refrains from suggesting an outright prohibition. Instead, it implies that PEP involvement at a club will necessitate heightened corporate governance standards. Detailed specifics are not outlined in the White Paper regarding this approach.
While the list of disqualifying events has been expanded, it largely maintains an objective nature. The inclusion of human rights abuses, although not directly mentioned in Section F, is covered through the general sanctions provision. The list's relatively limited scope contrasts with the extensive General Sanctions List. Notably, Politically Exposed Persons are not directly disqualified, with their involvement likely leading to more stringent corporate governance requirements.
In conclusion, these alterations arrive amidst ongoing scrutiny of English football's corporate governance, with impending reforms highlighted in the UK Government's White Paper "A Sustainable Future – Reforming Club Football Governance." The OADT changes appear to try and pre-empt scrutiny from potential new regulators. While the revisions fill gaps identified in the White Paper, further changes are anticipated in the coming years but may be too late to fight off the proposed Independent Regulator for English Football.
The modifications are extensive, possibly a response to previous experiences with club owners and directors and align well with the need to ensure responsible club ownership. These changes may be the start of a more comprehensive shift in evaluating owners and directors, and their impact on English football. Whether this will be enough to fight off the advances of the Government's White Paper will be a different question, and may see a serious indentation to the FA Premier League's current independence.