Premier League: Arsenal, Chelsea and Tottenham get huge FFP update As League Faces New Legal Battle
Premier League news as unnamed Premier League side reportedly threatens legal action over possible new rules… CONTINUE READING
The Premier League could face extra legal action after fresh proposals
The Premier League faces a new obstacle in its bid to clamp down on associated party transactions (APT) despite clubs voting against enforcing a ban on two counts earlier this season.
The rules are in place to ensure that none of the 20 sides benefit from inflated commercial deals that can therefore be exploited in the transfer market.
Sky News report that one Premier League club – which they suggest could be Manchester City – have threatened possible legal action via arbitration proceedings to stop the potential changes. The other 19 teams discussed the update during a two-day Premier League meeting on Thursday.
At that meeting, it has now been revealed that by a count of 12 votes for, six against – two abstained – there will be tougher associated party rules. Business of Football writer at Reach, Dave Powell explains: “With commercial revenue a key strand to a club’s financial health and ability to spend in the transfer market, particular focus has been placed on associated party transactions to ensure fair market value.”
He continues: “The Premier League has been wanting to introduce tighter controls around associated party transactions, with one of the requirements being that such transactions can take place provided that there is proof that other offers were received for the sponsorship inventory for the same or similar price.”
It comes as increased financial pressure is being ramped up between club and league following the charges levied at City and Nottingham Forest, as well as punishment already handed out to Everton. The Toffees also face fresh charges of breaching profitability and sustainability rules (PSRs) for this season having been sanctioned for last year’s accounts.
City, who are sponsored by Etihad – the Abu Dhabi national airline – have previously made their opposition to even tighter related-parted party rules clear. They were one of the sides that voted against enforcing a temporary ban on transfers and new commercial deals between APTs earlier this year.
Related parties are a growing influence in the modern game with multi-club models becoming more common. The interest has been spiked this year in particular after Newcastle looked set to benefit from deals with Saudi Pro League sides that are invested in by the Public Investment Fund (PIF), who also own the club.
Chelsea have some form of overlap with the new Saudi setup due to links between the state and their co-owners Clearlake Capital. The Blues are also being investigated, in a separate case, for possible financial breaches during the Roman Abramovich era.
The Todd Boehly-Clearlake consortium have themselves set up a multi-club opportunity via BlueCo, and purchased French side RC Strasbourg earlier this season. They have completed two loan deals to the Ligue 1 outfit this season.
City have one of the most established football groups (CFG) including Girona, Melbourne City, Palermo, Yokohama F Marinos, and New York City. They are facing 115 charges from the Premier League over alleged wrongdoings in a 10-year period starting from 2008.
The Premier League side moving against these changes is said to believe that amendments that hinder agreements between related parties are unlawful. The league is thought to be confident that legal advice already received is accurate, and that the reforms are acceptable.
Both Newcastle and Chelsea have stood to benefit from the current rules after agreeing deals, like City, with companies tied to their owners. Chelsea’s Infinite Athlete shirt sponsorship deal was passed after the season started following rigorous processes by the league that included declining Paramount+ as an option.
Infinite Athlete are a new company created when Tempus Ex Machina – who become new partners with Chelsea in 2023 – were acquired by Biocore last year. Worry had been raised over the legitimacy of the deal with its reported £60million value for the season despite the Blues dropping out of the Champions League.
As for the Magpies, Powell says, “In the case of Newcastle United, just two months after the Saudi Arabian Public Investment Fund (PIF) acquired the club, the Premier League made moves to green light restrictions on the size of commercial deals to a fair market value, with the Premier League being the arbiter of what constituted such.
“That was because clubs were concerned that the PIF would seek to leverage the simpatico relationships it had in the Middle East, or with other PIF-owned entities, to significantly enhance the value of commercial deals beyond what other clubs would be able to achieve. The PIF has entered into lucrative agreements with companies from the region such as Sela, Noon, and Saudia, but all have been deemed to be compliant with FMV regulations.”
The current rules mean clubs have to submit a proposal to the league before a review board decides how to continue. A law that would have been implemented had the November vote been passed would have meant clubs could proceed with deals immediately but could be held accountable if they were not deemed fair market value.
Such deals would also have needed the submission of proof of a second bid of a similar monetary level. It only failed by one vote.
City’s current financial fair play case is extremely different to that of Everton and Forest. Punishment for being found guilty of any of the breaches could result in major fines, more points deductions, titles being stripped, and even relegation.
Powell finishes: “That Manchester City have been named as the club to have potentially voted against the changes is surprising. The club is now a global powerhouse and can pull on financial levers that it never used to have at the start of the Sheikh Mansour regime.
“As a Champions League and Premier League-winning side, it should have the ability to generate sums from commercials deals at the same level as any European giant.
“But given the current battle that Manchester City face with the Premier League, where they were landed with 115 charges of alleged breaches of profit and sustainability rules (PSR), it is possible that the club wishes to challenge the legitimacy of the League’s rules around APT and whether it is right that they can be enforced to such a degree.
“It would be similar in some ways to the reason why the clubs in support of European Super League continue to persist, because it has the potential to bring about a change in law that could pave the way for greater ability to generate revenue for clubs in the future.”….CONTINUE READING
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