Premier League clubs have agreed new measures to force all clubs – and Newcastle United in particular – to prove that commercial deals they agree represent fair market value and are not inflated to inject cash that bypasses financial fair play.
The move to introduce the measures was opposed by Newcastle, recently taken over by a consortium 80 per cent owned by Saudi Arabia’s state Public Investment Fund (PIF), as well as Manchester City, owned by Sheikh Mansour, a member of the Abu Dhabi royal family. It is understood that Amanda Staveley, part of the Newcastle consortium, sent an email to the other 19 clubs this week questioning how the rules would work, and how the league could hope to calculate fair market value.
Staveley, whose PCP Capital Partners have 10 per cent of Newcastle’s ownership consortium, was part of the Premier League working group that formulated the new rules – to be known as “associated party transactions” – that will govern deals between clubs and entities that could fall under the same ownership.
Nevertheless, despite making what they regarded as a number of concessions in the process, Staveley and Newcastle opposed the final agreement. Among the many objections, Newcastle’s new owners believe the rules place too much restriction on commercial freedoms.
The 18 clubs in favour of the new rules were eager that Newcastle should not benefit from an immediate injection of funds by agreeing new commercial deals with Saudi-owned businesses and entities. In October, after the PIF-led takeover, the league voted for a temporary block on new commercial deals pending these new rules.
Among Newcastle’s objections were that the associated party rules were, one source said, an “administrative nightmare”. For instance, they limit the size of commercial deals but not the number of those deals that could potentially be signed.
The associated party rules dictate that commercial deals will have to be submitted to the Premier League’s board, currently searching for a new chairman since the departure of Gary Hoffman. Those deals will then be scrutinised by an external assessor with independence who will determine whether they represent fair market value. The clubs who submit new deals will also be able to make the case for those deals being legitimate.
All commercial deals agreed by clubs will be held by the Premier League and the data anonymised so that assessors can compare deals across different clubs and different endorsement sectors. There are also new rules for transparency when it comes to paying managers, players, other coaches and staff. Clubs will have to be able to demonstrate that all key employees are paid out of the club’s approved budget within financial fair play and are not, for example, employed by other companies within the structure that owns the clubs itself.
Newcastle raised concerns about the practicability of anonymising data. It is understood that they also questioned whether the Premier League, which competes for commercial partners itself, sometimes in competition with its clubs, could have an unfair advantage.
