It is one of the more curious sub-plots to the volcanic row that has followed Manchester City’s unprecedented legal challenge of associated party transaction (APT) rules.
Why are Saudi Arabia-owned Newcastle United – viewed by Premier League rivals as the sporting equivalent of a great white shark when the takeover was given the green light in 2021 – sitting on the sidelines in a row that directly impacts them?
The kingdom’s Public Investment Fund have been so voraciously ambitious in boxing and golf – effectively upending both sports by pouring hundreds of millions into them in short order – but fears that they would be the unruly neighbour in English football have not materialised. At least not yet, anyway.
Presented with a chink of opportunity to challenge APT regulations that were introduced directly to inconvenience them, they have declined to join the fight. Granted, there are likely to be supportive statements to the City case (they are not alone on that – Chelsea and Everton are reportedly doing the same) but otherwise Newcastle remain interested bystanders and nothing more. Like everyone else in this week’s saga, eliciting any kind of comment (on or off the record) from them has been nigh on impossible.
What the Magpies’ hierarchy has done recently is publicly pledge to follow financial fair play (FFP) regulations which privately they feel are the biggest barrier to their progress. A press call to local journalists by CEO Darren Eales in January was deliberately timed to bring the profitability and sustainability rules issue to the forefront of the agenda but he was adamant there was no plan in the pipelines to challenge the rules. “We will comply with PSR,” he said several times.
It perhaps hints that there is more nuance to the APT challenge than there appears to be at first glance.
Because while the language used in City’s case is preposterous – the line about “the tyranny of the majority” will haunt them for years to come and the threats around funding and ticket prices are scandalous given the club’s record-breaking revenues – it should not be the case that we presume every new Premier League law is beyond question.
There were APT laws before the Newcastle takeover and there are longstanding Premier League regulations to make sure sponsorship deals aren’t being artificially inflated. Indeed City are facing 115 charges for allegedly breaching them.
Did they need to be tightened again in February, with threats of unlimited sanctions if they are breached? The independent tribunal that starts next week will give us a definitive answer but if they find in City’s favour, it suggests the legal argument for them in the first place was flimsier than initially presented.
No-one should buy City’s fatuous argument about doing this for the league’s greater good – it is clearly motivated by self-interest. But they are hardly exclusive in that regard: Manchester United, Liverpool and Arsenal were also part of a European Super League breakaway that was about securing them a bigger part of the revenue pie than they get from the Champions League.
And when a total ban on loan players moving between associated parties was proposed in November, was it partly done because rivals feared (incorrectly, as it turned out) that Newcastle were about to find a cheap way to extricate the best stars from the Saudi Pro League?
That was eventually defeated despite 12 clubs backing it, no doubt because some of Newcastle’s rivals in multi-club models realised it would also harm them.
It would clearly be wrong and damaging for the Premier League to become a spending free-for-all where nation states get impunity to disrupt competitive balance. But clearly FFP in its current form – and the limits that are placed on new owners to fund recruitment that can bring them close to the level of established rivals – is not working.
Lost in the APT argument is that it is only relevant because of the importance of revenue generation in the era of FFP. Without sponsorship and Champions League prize money (and soon enough, world club championship prize money) you can’t hope to compete.
Of course FFP is in the process of being overhauled but new cost controls are likely to reduce rather than increase the potential for aspiring clubs to spend. Even Aston Villa’s suggestion about increasing the £105m rolling loss limit by a modest £30m is likely to hit the buffers – even if the loss limit hasn’t been adjusted for inflation for many years.
So that means Newcastle and Villa might have to sell this summer to spend, despite both breaking into the top four recently and having wealthy owners who have appointed good people to run club with success. Is it any wonder supporters of those clubs feel the whole thing is rigged in the favour of clubs established in the elite?
Other, creative solutions might exist. i understands that one club that finished in the bottom half of the Premier League proposed something earlier this year that made sense. They suggested that clubs that dipped under the PSR limits could auction off their excess “financial headroom” to clubs that were close to the limit.
“That way clubs that stick to the spending limits get incentivised to do so, and clubs who want more headroom have to pay twice,” a source told i.
“At the moment, the only incentive to play by the rules is what happens if you don’t – and as the Everton mess shows, it’s not really clear what the punishment is.
“It didn’t get much support. It probably made too much sense.”
APTs, legal fights, points deductions: it’s difficult to see how football extricates itself from the mess we’re now in. But some are urging us to take a breath before suggesting armageddon will follow a possible City tribunal win.
Here is the verdict of Kieran Maguire, a football finance expert whose personal allegiance is with Brighton.
“If Manchester City are successful I don’t think it’ll make a huge amount of difference because they’ve still got to comply with the Premier League’s rules, Uefa’s rules and the original related party rules,” he told i.
“City’s viewpoint is very much they are being targeted – along with Newcastle – with the introduction of the associated party rules and I don’t think it’ll necessarily cause huge issues with the Premier League.
“Perhaps more intriguing is what happens if Manchester City lose.”
Could it mean even tighter spending controls in the future? It is a point no-one has yet made but is an interesting one.
The only thing that seems certain in this latest skirmish in the Premier League’s bitter civil war is this: it won’t be the last.
