Part 6

Distribution of revenue

Introduction

Part 6: overview and interpretation
56
1
This Part makes provision for a specified competition organiser to apply to the IFR for the triggering of a process under which—
a
specified competition organisers are required to enter into mediation in connection with the distribution of relevant revenue received by one of the organisers, and
b
if those organisers do not reach agreement during that process, the IFR may make an order as to the distribution of that revenue.
2
In this Part, “relevant revenue” means revenue received by a specified competition organiser—
a
as a result of the sale or acquisition of rights to exploit the broadcasting of football matches included in a competition organised by the specified competition organiser, or
b
from any other source specified, or of a description specified, in regulations made by the Secretary of State.
3
Before making regulations under subsection (2)(b), the Secretary of State must consult—
a
the IFR,
b
the Football Association, and
c
each specified competition organiser.
4
The Secretary of State may not make regulations under subsection (2)(b) unless there has been a material change in circumstances relating to the sources of relevant revenue received by a specified competition organiser since—
a
the day on which this section came into force, or
b
where regulations under subsection (2)(b) have been made, the day on which such regulations were last made.
5
For the purposes of this Part—
- “distribution agreement” means an agreement between two specified competition organisers that provides for the distribution of relevant revenue received by one or both of those organisers (and includes an agreement entered into before the coming into force of any provision of this Part);
- “distribution order” has the meaning given by section 62(6);
- “qualifying football season”, in relation to an application under section 57, means—
  1. either—
    1. the football season during which the application is made, or
    2. where the application is not made during a football season, the next football season after the application is made, and
  2. any subsequent football season up to and including the fifth subsequent season;
- “the resolution process” means the process set out in sections 60 to 62.
6
For the purposes of this Part, a distribution agreement or a distribution order relates to a qualifying football season if the agreement or order provides for the distribution of relevant revenue in or in respect of that season.

Applications for resolution process to be triggered

Applications for resolution process to be triggered
57
1
A specified competition organiser may apply to the IFR for the resolution process to be triggered where—
a
one or more questions have arisen between that organiser and another specified competition organiser, and
b
the question or questions relate to the distribution, in or in respect of one or more qualifying football seasons, of relevant revenue received by one of those organisers.
2
But a specified competition organiser may apply to the IFR under subsection (1) only if one or more of the following conditions are met in relation to the qualifying football season or seasons to which the question or questions for resolution mentioned in subsection (1) relate.
3
Condition 1 is met in relation to a qualifying football season if—
a
no distribution agreement is in force between the two specified competition organisers in relation to the season, and
b
no distribution order has effect in respect of the two specified competition organisers in relation to the season.
4
Condition 2 is met in relation to a qualifying football season if there has been, or will be, a material reduction in the relevant revenue received by one specified competition organiser in or in respect of that season compared to the relevant revenue received by that specified competition organiser in or in respect of any preceding season in relation to which (as the case may be)—
a
the last distribution agreement entered into between the two specified competition organisers had effect, or
b
the last distribution order made in relation to those organisers had effect.
5
Condition 3 is met in relation to a qualifying football season if, in relation to the relevant revenue received or to be received by either or both of the specified competition organisers in or in respect of that season, there has been or will be a material change in circumstances since (as the case may be)—
a
the day on which the last distribution agreement was entered into between those organisers, or
b
the day on which the last distribution order was made in relation to those organisers.
6
Condition 4 is met in relation to a qualifying football season if—
a
a distribution agreement is in force between the two specified competition organisers in relation to the season,
b
the distribution agreement has been in force for at least five years, and
c
no distribution order has effect in respect of the specified competition organisers in relation to the season.

Applications under section 57: procedural and other requirements
58
1
Before making an application under section 57, a specified competition organiser (“the notifier”) must—
a
notify the other specified competition organiser (“the respondent”) that the notifier intends to make the application, and
b
send a copy of the notification to the IFR.
2
A notification under subsection (1)(a) must—
a
set out details of the question or questions for resolution mentioned in section 57(1) to which it is intended the application will relate,
b
specify the qualifying football season or seasons to which that question relates or those questions relate,
c
explain why the notifier considers that at least one of the conditions in section 57 is met in relation to that season or those seasons,
d
invite the respondent to make representations about the content of the notification, and
e
specify the means by which, and the period within which, such representations must be made.
3
The period specified in the notice for making representations must be a period of not less than 14 days beginning with the day on which the notice is given.
4
An application under section 57 must not be made before the end of the period of five days beginning with the last day on which representations may be made.
5
An application under section 57 must—
a
set out details of the question or questions for resolution mentioned in section 57(1) to which the application relates,
b
specify the qualifying football season or seasons to which that question relates or those questions relate,
c
explain why the notifier considers that at least one of the conditions in section 57 is met in relation to that season or those seasons, and
d
be accompanied by copies of any representations made by the respondent about the content of the notification under subsection (1)(a).

Decisions by the IFR on applications under section 57
59
1
Where an application is made under section 57, the IFR must decide whether the resolution process should be triggered in relation to one or more of the questions for resolution to which the application relates (or a modified version of one or more of those questions).
2
The IFR may decide that the resolution process should be triggered in relation to the question or questions for resolution only if the IFR—
a
is satisfied that at least one of the conditions in section 57 is met in relation to each season to which the question relates or the questions relate,
b
has reasonable grounds to suspect that its ability to advance at least one of its objectives would be jeopardised if the resolution process were not triggered in relation to the question or questions for resolution, and
c
considers that the question or questions for resolution could not be resolved within a reasonable period of time by the IFR exercising any of its other functions under this Act.
3
In deciding whether the resolution process should be triggered in relation to one or more of the questions for resolution, the IFR may have regard to the purposes for which the distributed revenue would be used.
4
In deciding whether the resolution process should be triggered in reliance on the condition in section 57(3), the IFR may have regard to whether the situation described in section 57(3)(a) (no distribution agreement in force) has arisen as a result of bad faith on the part of either of the specified competition organisers.
5
Where the IFR is minded that the resolution process should be triggered, the IFR must consult the Football Association on the question or questions for resolution in relation to which it is minded to trigger the process.
6
If the IFR decides that the resolution process should be triggered, the IFR must—
a
notify the two specified competition organisers and give reasons for its decision, and
b
set out in the notice—
i
the question or questions for resolution in relation to which the IFR is triggering the resolution process,
ii
the qualifying football season or seasons to which that question relates or those questions relate,
iii
how the IFR has taken account of any representations, copies of which accompanied the application under section 57 by virtue of section 58(5)(d), in setting out that question or those questions, and
iv
any findings in the IFR’s most recent state of the game report that the IFR considers relevant to that question or those questions.
7
Where any of the questions for resolution set out in the notice differ from those to which the application made under section 57 relates, the notice must set out the extent of, and reasons for, those differences.
8
If the IFR decides that the resolution process should not be triggered, the IFR must notify the two specified competition organisers and give reasons for its decision.
9
The IFR must make the decision under subsection (1) within the period of 28 days beginning with the day on which the application is made.
10
The IFR may extend the period in subsection (9) by up to a further 28 days if it considers there are special reasons for doing so.

Resolution process

The mediation stage
60
1
This section applies where the IFR gives a notice under section 59(6).
2
The two specified competition organisers to which the notice was given must appoint a mediator before the end of the period of 14 days beginning with the day on which the notice was given.
3
If the period mentioned in subsection (2) ends without an appointment having been made by the specified competition organisers, the IFR must appoint a mediator as soon as reasonably practicable after that period has ended.
4
The IFR may extend the period in subsection (2) by up to a further 28 days if it considers there are special reasons for doing so.
5
A person appointed as a mediator under subsection (3) must be a person who the IFR considers to have appropriate skills and experience.
6
A mediator appointed under this section must mediate negotiations between the specified competition organisers on the question or questions for resolution set out in a notice under section 59(6)(b)(i) until whichever of the following events occurs first—
a
the specified competition organisers resolve that question or those questions (whether by entering into a distribution agreement or otherwise);
b
the end of the period of 28 days beginning with the day on which the mediator is appointed;
c
the specified competition organisers agree to terminate the mediation;
d
the mediator notifies the specified competition organisers that the mediator considers—
i
that there is no reasonable prospect of the specified competition organisers resolving the question or questions for resolution set out in a notice under section 59(6)(b)(i) (whether by entering into a distribution agreement or otherwise) within the period mentioned in paragraph (b), or
ii
either of the specified competition organisers is acting in bad faith.
7
The IFR must extend the period in subsection (6)(b)—
a
if requested in writing to do so by the mediator, and
b
by such period as is set out in the request, which may be up to a further 28 days.
8
The period in subsection (6)(b) may only be extended once.
9
A notification under subsection (6)(d) must include reasons for the decision.

Proposal stage
61
1
This section applies where mediation under section 60 comes to an end by virtue of the occurrence of an event within section 60(6)(b), (c) or (d).
2
As soon as reasonably practicable after the occurrence of the event, the IFR must give notice to the two specified competition organisers.
3
A notice under subsection (2) must—
a
set out the question or questions for resolution,
b
specify the qualifying football season or seasons to which that question relates or those questions relate,
c
set out any findings in the IFR’s most recent state of the game report that the IFR considers relevant to that question or those questions,
d
invite each of the two specified competition organisers to submit to the IFR and to each other a proposal as to how that question or those questions should be resolved,
e
require any proposal to be accompanied by supporting evidence (including evidence as to how the proposal addresses the findings set out under paragraph (c)),
f
specify the day on or before which proposals are to be submitted.
4
A question for resolution may be set out in a notice under subsection (2) only if it is the question, or one of the questions, for resolution remaining unresolved when the mediation mentioned in subsection (1) came to an end.
5
Where a notice under subsection (2) sets out a question for resolution that relates to relegation revenue (within the meaning given by section 62(9)), the notice must require the specified competition organisers to explain in a proposal how the proposal will promote the financial sustainability of clubs which operate teams relegated from a competition organised by the specified competition organiser distributing the relegation revenue.
6
Subsection (7) applies if, on or before the day specified by virtue of subsection (3)(f), a specified competition organiser submits to the IFR a proposal which the IFR considers is not a qualifying proposal.
7
The IFR may give both specified competition organisers a notice specifying a later day (falling not more than seven days after the end of the day specified by virtue of subsection (3)(f)) on or before which proposals are to be submitted.
8
As soon as reasonably practicable after—
a
the initial proposal deadline, or
b
(if earlier) the day on which the IFR considers that both specified competition organisers have submitted qualifying proposals,
the IFR must give a notice under subsection (9) to the two specified competition organisers.
9
A notice under this subsection must—
a
state which of the two specified competition organisers (if any) has submitted a qualifying proposal before the initial proposal deadline,
b
invite each such specified competition organiser to—
i
confirm their proposal, or
ii
make any permitted modifications to their proposal,
and submit the confirmed or modified proposal to the IFR and the other specified competition organiser, and
c
specify the day on or before which the confirmed or modified proposal is to be submitted.
10
The IFR may specify in a notice under subsection (2) or (9) the form and manner in which proposals and supporting evidence must be submitted.
11
In this section—
a
“the initial proposal deadline” means—
i
the day referred to in subsection (3)(f), or
ii
where the IFR gives a notice under subsection (7), the day specified in the notice;
b
a “qualifying proposal” means a proposal which—
i
explains how the question or questions for resolution should be resolved, and
ii
complies with the requirements imposed by virtue of subsection (3)(e) and (5) (if applicable);
c
a modification to a proposal is “permitted” unless it results in the proposal no longer being a qualifying proposal.

Distribution orders
62
1
This section applies where the IFR has given a notice under section 61(9).
2
Before the end of the period of 60 days beginning with the day on which the notice under section 61(9) was given, the IFR must give the two specified competition organisers a notice of the distribution order it proposes to make.
3
The IFR may extend the period in subsection (2) by up to a further 14 days if it considers it appropriate to do so.
4
A notice under subsection (2) must—
a
give reasons for the proposed distribution order,
b
explain how the proposed order applies the principles mentioned in subsection (8),
c
explain how the proposed order addresses the findings set out under section 61(3)(c),
d
invite each of the two specified competition organisers to make representations about the proposed distribution order,
e
specify the period within which such representations may be made, and
f
specify the means by which they may be made,
and the IFR must have regard to any representations which are duly made.
5
The period specified under subsection (4)(d) must be a period of not less than 14 days beginning with the day on which the notice is given.
6
As soon as reasonably practicable after the end of the period specified under subsection (4)(d), the IFR must make an order requiring relevant revenue to be distributed in a way that the IFR considers appropriate for the purpose of resolving the question or questions for resolution set out under section 61(3)(a) (a “distribution order”).
7
In making a distribution order the IFR must—
a
apply the principles mentioned in subsection (8), and
b
have regard to any proposal submitted under section 61(9)(b).
See also section 7 (in particular the IFR’s general duty to exercise its functions in a way that advances one or more of its objectives and to have regard to various matters).
8
The principles referred to in subsection (7)(a) are that—
a
the distribution order should not place an undue burden on the commercial interests of either specified competition organiser, and
b
the distribution order should not result in a lower amount of relegation revenue being distributed to a club during the relevant period than would have been distributed to the club during that period had the order not been made.
9
For the purposes of subsection (8)—
- “relegation revenue” means revenue distributed by a specified competition organiser to a club in consequence of a team operated by the club being relegated from a specified competition organised by the specified competition organiser;
- “relevant period”, in relation to a distribution order, means the period of one year beginning with the final day of the first football season in respect of which relegation revenue would be distributed in pursuance of the order.
10
A distribution order—
a
must impose on the specified competition organisers such obligations as the IFR considers appropriate for the purpose of securing compliance with the requirements set out in the order, and
b
may, where a distribution agreement is in force between the specified competition organisers in relation to the same qualifying football season or seasons to which the order relates, provide for that agreement to have effect subject to provision contained in the order.
11
At the same time as making a distribution order, the IFR must give the two specified competition organisers a notice—
a
including a copy of the order,
b
giving reasons for the order,
c
explaining how the order applies the principles mentioned in subsection (8),
d
explaining how the order addresses the findings set out under section 61(3)(c), and
e
including information about the possible consequences under Part 8 of not complying with the order.
12
The IFR must, as soon as reasonably practicable after making a distribution order, publish the order or a summary of the order.

Duration and revocation of distribution orders
63
1
A distribution order comes into force at such time as the order may specify.
2
A distribution order ceases to have effect—
a
on such day as may be specified in the order, or
b
if revoked under subsection (3) or (4).
3
The IFR may revoke a distribution order if it considers that there are exceptional circumstances that make it appropriate to do so.
4
The IFR must revoke a distribution order where it is satisfied that the two specified competition organisers have, after the making of the order, entered into a distribution agreement relating to the same qualifying football season or seasons to which the distribution order relates.
5
Where the IFR revokes a distribution order, it must give a notice to that effect to the specified competition organisers.
6
The notice must include the reasons for the IFR’s decision.
7
The notice may include transitional, transitory or saving provision in relation to the revocation of the distribution order.

Miscellaneous

Review of distribution orders, payment of costs, etc
64
1
The IFR must keep under review—
a
the extent to which specified competition organisers are complying with a distribution order which has effect in respect of them,
b
whether to take enforcement action under Part 8 in respect of a specified competition organiser which does not comply with a distribution order, and
c
whether to revoke a distribution order.
2
The IFR may by rules make provision about the payment of costs incurred by it or any other person under or by virtue of this Part.
3
Nothing in this Part—
a
affects the capacity of one or more specified competition organisers to agree, at any time, how relevant revenue received by a specified competition organiser is to be distributed (whether by entering into a distribution agreement or otherwise), or
b
prevents such an agreement from having effect or being enforced (subject to section 62(10)(b)).
S. 56 in force at Royal Assent for specified purposes, see s. 100(2)(g)
S. 57 in force at Royal Assent for specified purposes, see s. 100(2)(g)
S. 58 in force at Royal Assent for specified purposes, see s. 100(2)(g)
S. 59 in force at Royal Assent for specified purposes, see s. 100(2)(g)
S. 60 in force at Royal Assent for specified purposes, see s. 100(2)(g)
S. 61 in force at Royal Assent for specified purposes, see s. 100(2)(g)
S. 62 in force at Royal Assent for specified purposes, see s. 100(2)(g)
S. 63 in force at Royal Assent for specified purposes, see s. 100(2)(g)
S. 64 in force at Royal Assent for specified purposes, see s. 100(2)(g)