Financial Fair Play / Profit & Sustainability - New APT Rules Approved by Premier League

[duo]

2 hours ago, Toonjam88 said:

This whole anchoring doesn’t make any sense to me as to why clubs have gone for it other than stopping City, Man Utd, Chelsea spending loads of money. It still allows them to spend much more than any other club. There must be more to it that we are missing. 
 

 

Listening to that sounds nothing changes - business as usual. Unless this guys is completely wrong.

[The Prophet]

 

[The Prophet]

31 minutes ago, duo said:

Listening to that sounds nothing changes - business as usual. Unless this guys is completely wrong.

 

As it stands, it makes very little difference to us, but can't help but feel it's part of a wider agenda leading up to June.

[nufcnick]

Just now, The Prophet said:

 

Hahaha, that’s good to see 

[Dr Jinx]

They’ll do it unfortunately, but not under the current optics. Way too much attention on it from fans/clubs that have been on the short end of their rules.

[The Prophet]

https://www.theguardian.com/football/article/2024/may/02/richard-masters-premier-league-objections-english-football-independent-regulator

[timeEd32]

Amusing that Masters says a government intervention will create a "complicated and duplicative system" while at the same time the Premier League is creating new financial regulations that are quite clearly a complicated and duplicative system with UEFA's.

[Pixelphish]

6 minutes ago, timeEd32 said:

Amusing that Masters says a government intervention will create a "complicated and duplicative system" while at the same time the Premier League is creating new financial regulations that are quite clearly a complicated and duplicative system with UEFA's.

And quite clearly only serve one purpose you'd hope a regulator would want to stop, even though an impartial one will never exist.

[Nucasol]

More Everton problems - never a good sign when the PE sharks are circling:

 

https://www.bbc.co.uk/sport/football/articles/c4n14dzgkxpo

[The Prophet]

There's a legal challenge to associated party transactions according to this. Unless its the existing Man City one, can't read the full article.

[Guest]

Just now, The Prophet said:

There's a legal challenge to associated party transactions according to this. Unless its the existing Man City one, can't read the full article.

Big day for @FloydianMag

[FloydianMag]

Just now, Jack27 said:

Big day for @FloydianMag

Massive!!

[r0cafella]

Spoiler

The Premier League is at a critical juncture in its history. It is facing the first legal action against its rules from a member club; the old “big six” bloc is no more; the biggest shake-up in its financial rules for more than a decade is on the horizon; investigations and hearings into alleged rule breaches have caused huge disruption and spiralling legal fees; domestic TV rights have flatlined; looming on the horizon is the hearing into serial champions Manchester City’s 115 charges for breaching rules. And then there is the uncertain effect of an independent football regulator on the most popular and financially successful league in the world.

Associated party transactions – the legal challenge

A legal challenge by a club — believed to be Manchester City — against the Premier League rules for associated party transactions (APT) strikes at the heart of its financial rules. It is also believed that the legal action — which would mean taking the league to arbitration over the APT rules — includes a potential claim by the club for damages. 

The APT rules cover sponsorship and commercial deals with companies connected to the clubs, and any player transfers between clubs in the same ownership group, to ensure they are of “fair market value”. One example is Chelsea’s sale of two hotels to a sister company for £76.5 million, which has still not been signed off by the Premier League after ten months.

A legal defeat would mean any constraints over inflated sponsorship deals — the most blatant example in football being the Qatar Tourist Authority’s €200million-a-year deal (about £171million) with Paris Saint-Germain announced in 2014 but backdated to 2012 — would be removed. There are already concerns among City’s rivals that their multi-club ownership model provides them with big financial advantages, with large salary costs farmed out to the City Football Group while the club enjoys the financial profits.

The most recent accounts show City had 520 employees and a wage bill of £423million. Liverpool, with a smaller turnover and wage bill (£373million) had 1,005 employees. Last season, City made a profit of £80.4million, while the City Football Group made a loss of £112million.

End of the ‘big six’ and new alliances

The bloc of Arsenal, Liverpool, Chelsea, Tottenham Hotspur and the two Manchester clubs began having separate discussions in 2016, aimed at securing a larger chunk of overseas TV rights — something they achieved in 2018.

The ill-fated launch and collapse of the European Super League in 2021 was effectively the end of that alliance. That may be a good thing for English football but it means the Premier League is now a shifting pattern of different allegiances around different issues. Liverpool, Arsenal and Spurs are now more likely to vote with West Ham United and Crystal Palace than City and Chelsea.

Liverpool are now more likely to vote with West Ham on certain issues than Manchester City or Chelsea

BEN STANSALL/AFP

But the new alliances are not fixed. For example, Newcastle voted with City against APT rules, but the two state-connected clubs were on different sides of the divide when it came to this week’s vote on a spending cap called “anchoring”, which would restrict the top teams to spending a proportion of the amount the bottom club receive in television and prize money on transfers, wages and agents.

There is also the influence of “soft power” on votes. Sheffield United, owned by Saudi prince Abdullah bin Musaid Al Saud, voted against tougher APT rules and alongside Newcastle, who are owned by the Saudi Public Investment Fund (PIF), which is headed by the kingdom’s Crown Prince Mohammed bin Salman.

“It appeared to us the little prince was just doing what the big prince told him,” one club chief said.

The rise of private equity companies owning or investing in Premier League clubs is also a potential issue, given the huge economic influence wielded by sovereign wealth funds in the Gulf. The Saudi PIF has investments in Clearlake Capital, the majority owner of Chelsea, and the Premier League had to obtain written assurances that the PIF has no involvement in the running of the club.

A new financial world

There is a philosophy that there should be no restrictions on spending at all — as was the case up until 2013 — but it is clear that the majority of top-flight clubs believe constraints are necessary to keep it as the most competitive major league in the world — they believe that is the reason it is the most popular.

The Profit and Sustainability Rules (PSR), limiting losses to £105million over three years, will be no more from the 2025-26 season and instead there will be the squad cost rule (SCR): no Premier League club can spend more than 85 per cent of their turnover on wages, transfers and agents fees.

There have been concerns that SCR will mean those clubs with the biggest revenues and scope to grow them, such as City and United, will maintain and grow their advantage — and especially if City’s legal challenge succeeds and sponsorship deals with associated parties do not have to be of fair market value. Given domestic TV rights have flatlined — though still performing better than their European rivals — commercial deals will increase in importance.

The value of the Premier League’s domestic TV rights has flatlined but is still performing better than that of their European rivals

JEZ TIGHE/PROSPORTS/REX

That has led to the idea of anchoring: a proposal that club sources said was agreed “in principle” at a meeting this week, which would restrict the top teams to spending a proportion — perhaps five times — of the amount the bottom club receives. That means that no matter how high your revenues go, there is a limit to what you can spend.

The Manchester clubs as well as Aston Villa — who for some reason have sided with City in recent votes on financial issues — opposed it, while Chelsea abstained. Could anchoring too be subject to a legal challenge by City, or even by the PFA? The Premier League will now carry out extensive legal analysis of the idea with that possibility in mind, with the aim of it going to a full vote in June.

Alleged rule breaches and reputational damage

Even clubs who believe that the points deductions imposed on Everton and Nottingham Forest for PSR breaches were entirely justified accept that it has not been a good look for the Premier League.

The lack of a fixed tariff, the changing rules over when charges should be dealt with, the uncertainty over points deductions then being changed on appeal, and now legal action from Leicester City, who will be back in the top flight next season and immediately facing sanctions, have all been testing issues for the Premier League’s reputation.

That will all be small potatoes when the hearing into City’s 115 alleged rule breaches takes place — expected to be October with an outcome next year. If most of those are proved — and City deny any wrongdoing — then most clubs believe the most successful English club of the past decade would have to be demoted.

The Premier League is also wrestling with an investigation into Chelsea over apparently undeclared payments relating to football transfers made during the Roman Abramovich era and self-reported by the new owners.

All this is time-consuming and costly for the Premier League — with its legal bill now understood to be more than £20million a year. Should either the City or Chelsea cases lead to sanctions, then a dozen or more of their rival clubs could consider compensation claims.

Regulator is uncharted territory

The incoming independent football regulator is a voyage into the unknown. There is nothing like it in any other major European country and the government says it will ensure suitable owners and financially sustainable clubs.

Yet its powers will go significantly further. The Premier League has always had the whip hand when it comes to the money it hands out to the rest of football: take it or leave it, effectively. The EFL opposes parachute payments for relegated clubs, saying they distort the Championship and provoke the crazy spending there, but there is little they can do other than accept them.

The regulator will have the “backstop” power to impose a financial settlement on the Premier League. Some may view that as a good thing, but it certainly represents another challenge for the Premier League.

Yasir Al-Rumayyan is the governor of the Saudi Public Investment Fund, which owns Newcastle — the Premier League deemed it to be sufficiently separate from the state of Saudi Arabia when approving the 2021 takeover

ROBBIE JAY BARRATT/GETTY

The greatest concern is around the regulator’s future powers. Not only did the government rule out giving the regulator power to prevent more English clubs being bought by foreign states — despite suggesting that such a ban should apply to newspapers — but the Football Governance Bill states explicitly that decisions on future or incumbent owners “must also have regard to the foreign and trade policy objectives of His Majesty’s Government in the United Kingdom”.

Does that mean the UK’s important trading partner Saudi Arabia, which owns a club, should be given special treatment? Will the Foreign Office have to approve any action by the regulator against a state connected club?

“The Government appears to have written a stronger role than anticipated for itself into this regime,” the Premier League’s chief executive Richard Masters wrote to the DCMS select committee this week. “This may lead to pressure in the future for the Secretary of State to further expand the scope and powers of the IFR beyond financial sustainability. If this goes too far it may conceivably present issues with Fifa and Uefa, whose statutes ban state interference in football.”

 

[Guest]

5 minutes ago, r0cafella said:

  Hide contents

The Premier League is at a critical juncture in its history. It is facing the first legal action against its rules from a member club; the old “big six” bloc is no more; the biggest shake-up in its financial rules for more than a decade is on the horizon; investigations and hearings into alleged rule breaches have caused huge disruption and spiralling legal fees; domestic TV rights have flatlined; looming on the horizon is the hearing into serial champions Manchester City’s 115 charges for breaching rules. And then there is the uncertain effect of an independent football regulator on the most popular and financially successful league in the world.

Associated party transactions – the legal challenge

A legal challenge by a club — believed to be Manchester City — against the Premier League rules for associated party transactions (APT) strikes at the heart of its financial rules. It is also believed that the legal action — which would mean taking the league to arbitration over the APT rules — includes a potential claim by the club for damages. 

The APT rules cover sponsorship and commercial deals with companies connected to the clubs, and any player transfers between clubs in the same ownership group, to ensure they are of “fair market value”. One example is Chelsea’s sale of two hotels to a sister company for £76.5 million, which has still not been signed off by the Premier League after ten months.

A legal defeat would mean any constraints over inflated sponsorship deals — the most blatant example in football being the Qatar Tourist Authority’s €200million-a-year deal (about £171million) with Paris Saint-Germain announced in 2014 but backdated to 2012 — would be removed. There are already concerns among City’s rivals that their multi-club ownership model provides them with big financial advantages, with large salary costs farmed out to the City Football Group while the club enjoys the financial profits.

The most recent accounts show City had 520 employees and a wage bill of £423million. Liverpool, with a smaller turnover and wage bill (£373million) had 1,005 employees. Last season, City made a profit of £80.4million, while the City Football Group made a loss of £112million.

End of the ‘big six’ and new alliances

The bloc of Arsenal, Liverpool, Chelsea, Tottenham Hotspur and the two Manchester clubs began having separate discussions in 2016, aimed at securing a larger chunk of overseas TV rights — something they achieved in 2018.

The ill-fated launch and collapse of the European Super League in 2021 was effectively the end of that alliance. That may be a good thing for English football but it means the Premier League is now a shifting pattern of different allegiances around different issues. Liverpool, Arsenal and Spurs are now more likely to vote with West Ham United and Crystal Palace than City and Chelsea.

Liverpool are now more likely to vote with West Ham on certain issues than Manchester City or Chelsea

BEN STANSALL/AFP

But the new alliances are not fixed. For example, Newcastle voted with City against APT rules, but the two state-connected clubs were on different sides of the divide when it came to this week’s vote on a spending cap called “anchoring”, which would restrict the top teams to spending a proportion of the amount the bottom club receive in television and prize money on transfers, wages and agents.

There is also the influence of “soft power” on votes. Sheffield United, owned by Saudi prince Abdullah bin Musaid Al Saud, voted against tougher APT rules and alongside Newcastle, who are owned by the Saudi Public Investment Fund (PIF), which is headed by the kingdom’s Crown Prince Mohammed bin Salman.

“It appeared to us the little prince was just doing what the big prince told him,” one club chief said.

The rise of private equity companies owning or investing in Premier League clubs is also a potential issue, given the huge economic influence wielded by sovereign wealth funds in the Gulf. The Saudi PIF has investments in Clearlake Capital, the majority owner of Chelsea, and the Premier League had to obtain written assurances that the PIF has no involvement in the running of the club.

A new financial world

There is a philosophy that there should be no restrictions on spending at all — as was the case up until 2013 — but it is clear that the majority of top-flight clubs believe constraints are necessary to keep it as the most competitive major league in the world — they believe that is the reason it is the most popular.

The Profit and Sustainability Rules (PSR), limiting losses to £105million over three years, will be no more from the 2025-26 season and instead there will be the squad cost rule (SCR): no Premier League club can spend more than 85 per cent of their turnover on wages, transfers and agents fees.

There have been concerns that SCR will mean those clubs with the biggest revenues and scope to grow them, such as City and United, will maintain and grow their advantage — and especially if City’s legal challenge succeeds and sponsorship deals with associated parties do not have to be of fair market value. Given domestic TV rights have flatlined — though still performing better than their European rivals — commercial deals will increase in importance.

The value of the Premier League’s domestic TV rights has flatlined but is still performing better than that of their European rivals

JEZ TIGHE/PROSPORTS/REX

That has led to the idea of anchoring: a proposal that club sources said was agreed “in principle” at a meeting this week, which would restrict the top teams to spending a proportion — perhaps five times — of the amount the bottom club receives. That means that no matter how high your revenues go, there is a limit to what you can spend.

The Manchester clubs as well as Aston Villa — who for some reason have sided with City in recent votes on financial issues — opposed it, while Chelsea abstained. Could anchoring too be subject to a legal challenge by City, or even by the PFA? The Premier League will now carry out extensive legal analysis of the idea with that possibility in mind, with the aim of it going to a full vote in June.

Alleged rule breaches and reputational damage

Even clubs who believe that the points deductions imposed on Everton and Nottingham Forest for PSR breaches were entirely justified accept that it has not been a good look for the Premier League.

The lack of a fixed tariff, the changing rules over when charges should be dealt with, the uncertainty over points deductions then being changed on appeal, and now legal action from Leicester City, who will be back in the top flight next season and immediately facing sanctions, have all been testing issues for the Premier League’s reputation.

That will all be small potatoes when the hearing into City’s 115 alleged rule breaches takes place — expected to be October with an outcome next year. If most of those are proved — and City deny any wrongdoing — then most clubs believe the most successful English club of the past decade would have to be demoted.

The Premier League is also wrestling with an investigation into Chelsea over apparently undeclared payments relating to football transfers made during the Roman Abramovich era and self-reported by the new owners.

All this is time-consuming and costly for the Premier League — with its legal bill now understood to be more than £20million a year. Should either the City or Chelsea cases lead to sanctions, then a dozen or more of their rival clubs could consider compensation claims.

Regulator is uncharted territory

The incoming independent football regulator is a voyage into the unknown. There is nothing like it in any other major European country and the government says it will ensure suitable owners and financially sustainable clubs.

Yet its powers will go significantly further. The Premier League has always had the whip hand when it comes to the money it hands out to the rest of football: take it or leave it, effectively. The EFL opposes parachute payments for relegated clubs, saying they distort the Championship and provoke the crazy spending there, but there is little they can do other than accept them.

The regulator will have the “backstop” power to impose a financial settlement on the Premier League. Some may view that as a good thing, but it certainly represents another challenge for the Premier League.

Yasir Al-Rumayyan is the governor of the Saudi Public Investment Fund, which owns Newcastle — the Premier League deemed it to be sufficiently separate from the state of Saudi Arabia when approving the 2021 takeover

ROBBIE JAY BARRATT/GETTY

The greatest concern is around the regulator’s future powers. Not only did the government rule out giving the regulator power to prevent more English clubs being bought by foreign states — despite suggesting that such a ban should apply to newspapers — but the Football Governance Bill states explicitly that decisions on future or incumbent owners “must also have regard to the foreign and trade policy objectives of His Majesty’s Government in the United Kingdom”.

Does that mean the UK’s important trading partner Saudi Arabia, which owns a club, should be given special treatment? Will the Foreign Office have to approve any action by the regulator against a state connected club?

“The Government appears to have written a stronger role than anticipated for itself into this regime,” the Premier League’s chief executive Richard Masters wrote to the DCMS select committee this week. “This may lead to pressure in the future for the Secretary of State to further expand the scope and powers of the IFR beyond financial sustainability. If this goes too far it may conceivably present issues with Fifa and Uefa, whose statutes ban state interference in football.”

 

Blimey. What a mess the PL has gotten itself into

[Abacus]

8 minutes ago, The Prophet said:

There's a legal challenge to associated party transactions according to this. Unless its the existing Man City one, can't read the full article.

They say it's believed to be Man City.

[r0cafella]

Just now, Jack27 said:

Blimey. What a mess the PL has gotten itself into

Yeah. I couldn’t agree more but it’s the members so make up the league and decide all of this, if they’ve made rules which are actually unlawful good luck to them. 
 

I think it’s the changing of the make up of the league which has done it in. Before ambitious people took over us Villa and forest everyone loved FFP. 

[Abacus]

They do make the point that after the collapse of the ESL all the traditional voting blocks in the sky 6 have broken up - they all want different things.

 

So, at least we've disrupted all that, meaning the anchoring vote was actually quite clever by us, I reckon.

 

 

Edited May 3 by Abacus

[Guest]

imagine the uproar had it been us asking this 

[r0cafella]

Just now, Jack27 said:

imagine the uproar had it been us asking this 

Oh dear, @brummiebetter brace himself for that points deduction. 

[Abacus]

On the face of it, it's quite a reasonable request by Villa given it hasn't increased by inflation for years.

 

But since those rules drop away in 25/26 (I think), it suggests Villa might be quite close or over the limit now, so are susceptible to being raided. They'll also be in the CL next season and so must realise they need to strengthen and are hemmed in like we were.

 

And at the same time makes a complete mess of the current points deduction farago that's happened.

[Abacus]

The more you look at it, the more sensibly we seem to have played it - playing nice while the rules blow up on their own, and no longer being billy-no-mates in the playground.

[r0cafella]

2 minutes ago, Abacus said:

On the face of it, it's quite a reasonable request by Villa given it hasn't increased by inflation for years.

 

But since those rules drop away in 25/26 (I think), it suggests Villa might be quite close or over the limit now, so are susceptible to being raided. They'll also be in the CL next season and so must realise they need to strengthen and are hemmed in like we were.

 

And at the same time makes a complete mess of the current points deduction farago that's happened.

It’s not at all reasonable  everyone has been constrained by these rules IF someone just exceeds them and ask for an increase it makes a totally mockery out of them. 
 

Its just odd, it’s as if it’s dawned on them they are fucked and are exploring other options which doesn’t involve selling a crown jewel. 

[Abacus]

Just now, r0cafella said:

It’s not at all reasonable  everyone has been constrained by these rules IF someone just exceeds them and ask for an increase it makes a totally mockery out of them. 
 

Its just odd, it’s as if it’s dawned on them they are fucked and are exploring other options which doesn’t involve selling a crown jewel. 

Yeah, that's why I said "on the face of it".

 

And I agree with you - I think that's exactly what's happened to them. They've hit the glass ceiling and realised that.

 

But if we'd done it, can you imagine the noise?

[r0cafella]

3 minutes ago, Abacus said:

Yeah, that's why I said "on the face of it".

 

And I agree with you - I think that's exactly what's happened to them. They've hit the glass ceiling and realised that.

 

But if we'd done it, can you imagine the noise?

Yeah, I mean we have the Saudi connection so no matter what we do, we will always get the least slack. 
 

it’s why I feel we’ve been sitting on the sidelines, PR wise we don’t want to bring so much negativity on ourselves; let someone else challenge the rules. 

[Nucasol]

The whole thing is a bag of spammers. I hope whoever it is wins the legal challenge and blows the whole charade wide open.