The Premier League has implemented stricter regulations aimed at preventing clubs from inflating sponsorship and transfer deals with entities linked to their owners.
These revised rules were approved by a ‘very narrow’ majority in a club vote last month and aim to address concerns about Profit and Sustainability Rules and maintaining a level playing field within the league.
The process will now work where the clubs must demonstrate the legitimacy of these transactions. They must provide a declaration from an associated party director confirming their belief in the deal’s fair market value.
Then an independent commission will review each of these deals, make a decision and impose a range of sanctions for any breaches they find. The severity of the offence will determine the penalty.
It is understood that the vote was not unanimous, with the league scraping through their ‘two-thirds majority’ rule with 14 of the 20 clubs agreeing to this policy.
Manchester City and Newcastle were reportedly part of the few clubs that staunchly opposed this policy and both clubs are in the spotlight having entered multiple commercial deals with brands from the same countries as their owners over recent years.
This has become an obvious integrity issue with the way clubs have inflated deals with affiliated entities in order to meet the stricter FFP thresholds that have seen clubs like Everton and Nottingham Forest punished, the former with a six-point deduction.
It became an interesting discussion after big clubs like Liverpool, Arsenal, Manchester United and Tottenham voted in favour of these new strict rules after recently being passed by Newcastle and Manchester City in commercial revenue.
Out of the 115 FFP charges that Manchester City face, the ones that could impose the biggest sanction are directly related to this topic, with the club earning over 13 times more in 2022/23 than they did in 2008 when the takeover first occurred, indicating a potential exaggeration of revenue from their Middle Eastern sponsors.
The Premier League claims that these revisions will ensure long-term financial sustainability while promoting fairness amongst clubs as they try to prevent other clubs from gaining an unfair advantage through non-market practices.
With Leicester City, Everton and Nottingham Forest charged in the last month, there is a clear crackdown on clubs breaking the Profit and Sustainability Rules (PSR).
It is certainly a step in the right direction for the Premier League who are seeing more clubs spend seemingly above their means without any harsh regulatory or legal checks that could potentially damage the integrity of the competition.
