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Premier League clubs face sanctions for inflating sponsorship deals
Premier League’s much tougher revised rules aim to stop clubs securing inflated deals with companies, organisations or other teams connected to their ownerswww.thetimes.co.uk
Premier League clubs will face sanctions if they try to secure inflated sponsorship or transfer deals with companies, organisations or other teams connected to their owners, new rules published in the top flight’s handbook have revealed.
The revised rules, which caused a bitter split in the league last month, are much tougher and aim to block clubs bypassing financial controls by earning unfair amounts via means such as sponsorship from a company linked to an owner, or by signing a player cheaply from another club in the same ownership group.
The detail of the new rules helps explain why some clubs were pushing strongly for them — and why state-connected clubs such as Manchester City and Newcastle United, or those in multi-club ownership models, were so fiercely opposed.
The updated Premier League handbook states that the rules “seek to ensure the long-term financial sustainability of clubs by extinguishing reliance on enhanced commercial revenues received from entities linked to the club’s ownership”. It adds that the rules are aimed at “fairness amongst clubs, so that clubs are not able to derive an unfair advantage over domestic competitors by increasing revenues or reducing costs via arrangements with entities linked to a club’s ownership”.
The burden of proof is now on clubs to show deals with associated companies or organisations are of “fair market value”. The deals include sponsorship agreements with connected companies, or transfer of players between clubs in the same ownership group. The rules put the onus on the clubs to ensure they do not try to push the limits on the fairness of deals.
Clubs such as Liverpool, above, Manchester United, Woolwich and Tottenham, part of the traditional elite, voted in favour of the new rules
GETTY IMAGES
Clubs are also now required to provide a declaration from a director of the associated party that they consider the deal to be fair market value.
A vote on the new rules went through last month — it was thought to be the closest in the Premier League’s history, with 12 clubs voting for the changes and six against, with two abstaining, which just passed the threshold of a two-thirds majority. After the new rules were voted through, some clubs were furious, with sources claiming it indicated a fractured relationship and a lack of unity within the league.
The “old guard” such as Liverpool, Manchester United, Woolwich and Tottenham Hotspur, who voted in favour of the new rules, have been outstripped by Manchester City in terms of commercial income. City’s sponsorship deals for 2022-23 were worth 13.6 times more than they were at the time of the Abu Dhabi takeover in 2008 — growing from £25 million to £341.4 million.
During that same period of time, United’s have gone up 4.7 times to £302.9 million and Liverpool’s five times to £272 million.
In 2017, before City had overtaken their English rivals, La Liga made a complaint to Uefa pointing out the club had “uncommonly high commercial revenue”, with several sponsors being companies “directly controlled by the United Arab Emirates”.
The Premier League’s changes include:
⬤ the “burden of proof” is now on the club to demonstrate that a deal is of fair market value;
⬤ each club submitting an associated party transaction (APT) shall procure “a declaration by a director (or equivalent) of the relevant associated party by way of confirmation that they consider the [deal] to be at fair market value”;
⬤ new breaches of the rules include “failure by a club to use all reasonable care to ensure that an APT is at fair market value” and “failure by a club to use all reasonable care to ensure it does not arrange or facilitate a transaction between a player, manager or senior official of that club and a third party that is not at fair market value”; and
⬤ the Premier League can demand evidence that a club has “effective procedures and processes (being clear, practical, accessible, and effectively implemented and enforced)” in place for ensuring an APT is at fair market value and “evidence of such procedures and processes being followed”.
Our commercial income grew from £33.8m in 2008 to £261m in 2022 (7 times) which is pretty astonishing compared to the other clubs mentioned. But realistically from where they were in 2008 to with them being league champions etc is it that crazy? I suspect the problem is that our deals are with a range of companies whilst the majority of theirs will be companies from Abu dhabi. If they were forced to replace those then I wouldn’t be surprised if they brought in similar levels with other companies now.
Not sure if it is them but there’s that betting company (who do or did sponsor the chavs) that is impossible to track down. Its address in London is a PO Box. A few clubs are involved with them. The Athletic did an article on them a few years ago.
Revealed: The obscure gambling firms with untraceable employees working with your football club
“Technically we’re not doing anything wrong,” one Premier League insider told The Athletic. “Morally… that’s a different matter”
theathletic.com
The Athletic’s latest investigation into football’s murky relationship with such companies shows:
- Chelsea’s bizarre interaction with a fake LinkedIn network and the photograph of a Hollywood actor
- Multiple other clubs striking deals with apparently uncontactable people who may not exist
- New details of Southampton’s controversial 2019 partnership with LD Sports
- How football club sponsors’ products potentially expose fans to cybersecurity risks.
Not sure if it is them but there’s that betting company (who do or did sponsor the chavs) that is impossible to track down. Its address in London is a PO Box. A few clubs are involved with them. The Athletic did an article on them a few years ago.
Revealed: The obscure gambling firms with untraceable employees working with your football club
“Technically we’re not doing anything wrong,” one Premier League insider told The Athletic. “Morally… that’s a different matter”
The Athletic’s latest investigation into football’s murky relationship with such companies shows:
- Chelsea’s bizarre interaction with a fake LinkedIn network and the photograph of a Hollywood actor
- Multiple other clubs striking deals with apparently uncontactable people who may not exist
- New details of Southampton’s controversial 2019 partnership with LD Sports
- How football club sponsors’ products potentially expose fans to cybersecurity risks.
New PL rules effectively stops these ones too - at least for ffp purposes.
Its possible a PL club might get a sponsorship from a 'difficult to track down' company simply because it gets them another £50m or so which helps fund things such as infrastructure. But with those sort of deals I would think the club runs the risk of getting into charges of money laundering etc, more so now than say 10 years ago
It just shows how badly football needs regulation if you ask me.
Nope. Washington is more valuable because the NFL’s economic model makes it more profitable than the EPL even when comparing a shitty team like Washington against the biggest club in the Prem.
Yeah, I’ve seen the silly memes that compare apples to oranges and claim Spurs are the third most profitable sports franchise in sport and I’ve already destroyed that notion.
Profitable or highest revenue? Absolutely not the latter but I don’t know on the former (profit)?
Some were claiming ‘profitable’.
They got the ‘figures’ from Forbes. However, what they failed to mention was that these figures did not account for “player trading”. Given that it’s a baked- in process that the vast majority of Premier League teams (including us) trade negatively each year then it’s not exactly a true comparison against other leagues.
The Cowboys don’t pay the USC Trojans 50 million for a QB.
I know a few clubs have to destroy evidence of ffp avoidance, including by burning documents, but I didn;t realise Southampton might be on that list !
View: https://x.com/fan_banter/status/1765408167125483775?s=20
View: https://x.com/fan_banter/status/1765408167125483775?s=20
Listening to the pod last week, I think Flav is more correct on the Overlap than he let on. It's a bit different for teams like Newcastle and Villa who are trying to bridge a big revenue gap, but no one is forced to sell homegrown players other than by overspending in other areas. It's not even necessarily more profitable (Sarr would make more profit than Skipp) but if you pay players at massive mark ups, you need to sell at massive profits.
All this does is make sure that clubs already established (or with fake sponsorships like Newcastle) can keep spending, while smaller clubs will only always be able to spend a fraction of them, since it's gone from a fixed loss to a percentage one (which can be more easily manipulated). The likes of Brighton are screwed from this.
To be honest, this just isn't much different to what already happens.
It basically means though that Chelsea and City will be able to spend, regardless.
And clubs with small revenue get utterly fucked. Not even talking about the likes of Everton or West Ham, more about the likes of Luton, Palace, Wolves etc.
Premier League doesn't give a fuck about those clubs. They want the big names to be competing at the top.
Doesn’t say they won’t limit faux sponsorship / revenue inflation
Amazing it is getting voted through by a majority.
Or you’re patient and build over decades like we have.
The alternative means well continue to see midtable and lower clubs get pumped full of money out of nowhere (like Chelsea and Newcastle and city).