British football club insolvency: regulatory reform inevitable?

The article documents the high incidence of insolvencies occurring in recent years among professional British football clubs which has led to a select committee of the House of Commons to call for a change in insolvency law to make illegal the so-called “football creditors rule”. The rule has been cited as a major cause of financial mismanagement (and the high level of insolvencies) in professional English football. The article considers the 2012 High Court decision in HMRC v The Football League which represented an unsuccessful attempt by Her Majesty’s Revenue and Customs to obtain a declaration from the High Court that the football creditors rule contravenes the basic principles of insolvency law, the pari passu rule and the anti-deprivation principle which are described in detail. The article also analyses the governance of English football and considers whether self-regulation should give way to legislation to prevent the insolvency malaise that afflicts the professional game in England. The article concludes by assessing whether the Financial Fair Play rules introduced in 2012, which may mitigate the harmful effects of the Football Creditors Rule, are a long-term solution to the indebtedness of top flight professional football clubs.