The FCA and football: a warning from the regulator

The Financial Conduct Authority (FCA) has written directly to a number of football clubs, warning them about sponsorship deals with unauthorised firms. The FCA believes these unauthorised firms may be breaching UK financial services laws by providing potentially harmful financial services and products in the UK without authorisation.

The FCA’s focus is sponsorship arrangements between football clubs and unauthorised firms operating cryptocurrency exchanges or trading platforms. Clubs have been warned that such arrangements risk conferring legitimacy on these firms and may therefore expose UK consumers to harm. The FCA believes that sponsorship received from an unauthorised firm may constitute criminal property under the Proceeds of Crime Act 2002, and that clubs’ own promotional content relating to a sponsor’s product or services could amount to an unlawful financial promotion in breach of section 21 of the Financial Services and Markets Act 2000.

The FCA expects football clubs to conduct proper due diligence on financial services sponsors before entering into any deals and thereafter on an ongoing basis. This includes: 

1. confirming whether the firm is able to legally provide or promote financial services to UK consumers;
2. assessing whether its products or services constitute regulated activities under UK law;
3. cross-checking firms against the FCA Firm Checker and Warning List; and
4. seeking independent legal advice where necessary.

Regulating football finances

The FCA’s letter is the latest in a series of recent developments that underscore a trend towards more rigorous regulatory oversight of the financial affairs of English football, in light of the scale of financial investment in the sport. The new Independent Football Regulator (IFR) has been active, including agreeing earlier this year a Memorandum of Understanding (MoU) with the FCA. The MoU sets out a framework for coordination and information sharing between the two regulators. This suggests that they expect their work to intersect regularly, and indeed the FCA has confirmed that it is now engaging with the IFR, the Premier League and the Government to tackle the sponsorship risks outlined above across the sport.

The IFR (which is developing its own regulatory regime for English football) is also scrutinising the financial affairs of football clubs in more detail. Any licensed club that changes ownership must now pass stringent suitability tests, with checks on honesty, integrity, and financial soundness forming an overarching fitness test for owners and directors before they can take up a role at a club. Prospective owners must also pass “source of wealth” tests. In addition, the IFR can remove or disqualify existing owners or directors if suitability requirements are not met.

Meanwhile, the Government’s UK Anti-Corruption Strategy 2025 has committed to supporting the IFR by strengthening its anti-corruption capabilities, including by seeking to build closer links between the IFR and law enforcement agencies. Notably, the Government has, for the first time, included English football clubs and agents in the latest National Risk Assessment of Money Laundering and Terrorist Financing, noting that football is “an attractive target for criminals, kleptocrats and other malign actors seeking to launder their criminal funds or generate further illicit gains.” It flagged risks across club ownership structures, player transfers, sponsorship arrangements and agents’ activities - in effect the same areas that the IFR’s wide-ranging powers and the FCA’s recent letter are designed to address.

Looking further afield, the EU has gone a step further, bringing professional football clubs and agents within the scope of its Anti-Money Laundering framework from July 2029. Under the new EU rules, clubs will be required to apply customer due diligence and transaction monitoring to key areas of their business, including deals with investors, sponsors, agents and player transfers. 

Regulatory red cards

The regulatory risks for football clubs are continuing to increase. The FCA’s letter makes clear that sponsorship deals with unauthorised financial services firms potentially expose clubs to legal liability, money laundering risks and serious reputational damage. Clubs should therefore ensure that they undertake proper due diligence into any (or any potential) financial services sponsors, conduct comprehensive screening which includes an examination of the regulatory status of potential sponsors, as well as utilising the FCA Firm Checker and Warning List. Specialist legal advice should be obtained where there is any uncertainty about a potential sponsor. More widely, the heightened regulatory scrutiny means clubs should be investing in their anti-money laundering and compliance systems and controls. Those who do not do so, face a greater risk of regulatory scrutiny and, for the most serious and systemic failings, potential criminal proceedings.