Newcastle United’s new owners have barely finished their stadium tour of St James’ Park and Premier League clubs have already responded to their arrival with a vengeance. Premier League clubs passed an ‘emergency’ rule which will temporarily prohibit commercial arrangements between a club and a business that has a pre-existing relationship with the club’s owners. In effect, clubs will not be able to sign new sponsorship deals with entities associated with their owners. The rule was passed with 18 votes in favour, 1 against (the Magpies) and 1 abstainer (Manchester City). It comes into effect in November and will subsist, for now, for 1 month.
The action has been taken to prevent clubs from engaging in sponsorship arrangements at inflated rates to help fund transfer war chests. This is on the basis that such ‘unfair’ arrangements undermine, if not actually breach, financial fair play rules.
Although the rule applies to all clubs, it is clear that Newcastle is the target and given the short-term effect of the rule, it is no doubt intended to give some breathing space while the clubs decide what to do in the long term. A working party will reportedly be set up to monitor the impact of the temporary measure and decide if any changes should be made, with the group to be made up of representatives from Premier League clubs.
There has been much furore surrounding the recent takeover of Newcastle United by Saudi Arabia's Public Investment Fund and the Premier League’s approval of the takeover after receiving "legally binding assurances" that the Saudi state would not control the club. This also follows other controversies including the FFP saga involving Man City’s “related party transactions” (e.g. between Etihad Airways and Man City) and the well-publicised collapse of the “fair and competitive” European Super League. There are fascinating and complex commercial, competition law, and geopolitical issues at play here and it looks like the only thing that can be guaranteed are more discussions, debates and disputes regarding the future governance of the Premier League. Bring on the fan led review of football governance due in the Autumn!