Dyke has been a director of both Manchester United and Brentford football clubs, and was chairman of the FA from 2013 to 2016. He has said that he supported both clubs since he was a child, although his older brothers supported Tottenham. He became a fan of Brentford when his brother played for the club as a junior. Manager Bill Dodgin Sr. tried to sign his brother, but their father would not agree to him committing to what he saw as a badly paid and insecure career.
From 1997 to 1999, Dyke served as a non-executive director of Manchester United, and was the sole board member to oppose a takeover bid from BSkyB, which was subsequently rejected by the Monopolies and Mergers Commission. When he became director-general of the BBC he admitted a "potential conflict of interest" between his new post and his non-executive directorship at Manchester United plc. He resigned his position to avoid controversy. In a speech at the Manchester Evening News Business of the Year Awards, he said "it was seen as a conflict of interest to both buy and sell football rights. My kids have never forgiven me for joining the BBC because of that."
Dyke was the non-executive chairman of Brentford from 20 January 2006 until July 2013. He was appointed as part of the club takeover by Bees United, the Brentford Supporters Trust.
At Brentford, Dyke's focus was on budget constraints for the small club and the necessity to generate money from televised matches and other means. Under Dyke the club's performance was initially unsteady, with a few highlights but the club experiencing its worst run since the 1970s. On 28 January 2006, they beat Premier League strugglers Sunderland 2–1 in the fourth round of the FA Cup, but lost 3–1 to another Premier League club Charlton Athletic (of which former BBC chairman Michael Grade was non-executive director) in the fifth round.
The club finished third in the league that year and lost to Swansea City in the play-off semi-final. These initial slight successes preceded a spell of misfortune which saw Brentford lose 16 matches in a row and be relegated to Football League Two in 2007. Turnover of managers was fast, with Allen, Leroy Rosenior, Scott Fitzgerald, Alan Reeves, Barry Quin and Terry Butcher in the space of two years, before Butcher's assistant Andy Scott got the team back on track, winning the League Two title on 25 April 2009. Scott could not continue the success and after a series of poor results he was sacked in February 2011. Dyke remained upbeat:
"We are slightly disappointed with this season, as we increased the playing budget. The highlight was getting to Wembley but we froze a little in the final. But we have a good team, no matter who the manager is. We are spending enough money and we should be getting to the play-offs."
Dyke announced plans in 2010 for the club to move to a new ground, selling off the Griffin Park ground for residential housing to raise money. Dyke said: "Our aim is to move into a new stadium in Lionel Road and to move there as a club free of debt."
Dyke replaced David Bernstein as chairman of The Football Association in July 2013 after relinquishing his role as Brentford chairman and receiving approval from the FA council. In September, Dyke warned of an "alarming" lack of homegrown talent in English football, with fewer and fewer homegrown players in the top flight, and set England the target of at least reaching the semi-finals of UEFA Euro 2020 and then winning the 2022 FIFA World Cup.
After Sepp Blatter's sudden departure from FIFA on 2 June 2015, when Blatter said he was resigning for honorable reasons and to allow FIFA to move on, Dyke said: "I don't believe a word of this. If he believes that, why not step down last week when we asked him to? He was cock-a-hoop when he won the election and terribly arrogant. Clearly there is a smoking gun. This is nothing to do with Mr Blatter being honorable; he hasn't been honorable for years".
Dyke left the FA in 2016, deciding not to stand for re-election, as he struggled to reform the organisation. He was succeeded as chairman by Greg Clarke.