Newcastle United sponsorship deals – Premier League now fear successful legal challenge
Newcastle United sponsorship deals are now back in the headlines.
A new media exclusive revealing how the recently introduced Premier League new rules on related party transactions are going to be applied.
Then more importantly…what chance the other Premier League clubs have of using these hastily introduced new rules to successfully prevent lucrative Newcastle United sponsorship deals from happening.
Newcastle United and Manchester City opposed the introduction of the new rules last week but the majority of Premier League clubs got their way, in attempting to prevent Newcastle successfully been able to recover from a decade and a half of Mike Ashley.
The Times say that the new rules mean that every sponsorship deal worth more than £1 million a year has to be submitted to the Premier League to be checked that it is not an ‘associated party’ transaction.
The Premier League will then pass it to an independent firm if they suspect it could be an ‘associated party’ deal, with that independent firm having the job of deciding the proposed deal is market value or artificially inflated.
To assist the independent firm in reaching decisions, all Premier League clubs have to provide financial details of all the sponsorship deals they have had in place for the past five years (since 2016).
Well it won’t take much time to count up the cash that Sports Direct paid for the ‘sponsorship’ benefits they got from Newcastle United…
The Times say that:
‘The new regulations state the league will judge an associated party on “the substance of the relationship” rather than only the legal form of the relationship.
This includes “material influence over the club or an entity in the same group of companies” and where the club is “directly or indirectly controlled, jointly controlled, or materially influenced by the same government, public or state-funded body or by the same party”.’
All along, the Newcastle United owners have repeatedly made clear that they believe these moves by the Premier League won’t be able to be stood up legally, if / when challenged.
Despite these attempts by the Premier League, The Times state that senior figures within football do believe that Newcastle United could / would be successful if challenging the rules with certain deals.
The Times explaining that:
‘The Premier League approved the takeover on the basis that it accepted the PIF was separate from the Saudi state. Newcastle, it is feared, could legally challenge any attempt to block large sponsorship deals from Saudi entities on the grounds that they should not be viewed as associated parties.’
The attempts by other Premier League clubs to prevent Newcastle United now being able to start competing have certainly created problems / issues and potentially / probably delayed new Newcastle United sponsorship deals being signed off and announced.
However, whether these attempts to curb Newcastle’s ambitious bounce back from oblivion will prove successful longer term, certainly appear to have massive question marks over them.
For Newcastle United fans who just want to see decent football and a club trying to be the best it can be, the sooner we see decent revenue streams flowing into the club compared to the laughable Mike Ashley years, the better.
Mike Ashley of course in a decade and a half, left Newcastle United with the same levels of Commercial Revenue in 2021 as the club had when he took over in 2007. An unbelievable ‘achievement’ that nobody else in football cared about, obviously(!), when every single other club significantly increased their Commercial Revenue.
If there was / is indeed to be any attempt at ‘fairness’ by the Premier League, why not take into account the mess the club is now in, due to in large part the lack of Commercial Revenue growth over the past 14+ years. For example, take the average percentage other major clubs have enjoyed in their Commercial Revenues in that time, then give Newcastle United that extra leeway in order to play catch up.
It is laughable how everybody else has been able to do pretty much whatever they like, including Manchester City, a very similar case to Newcastle United, for over 13 years. Yet now this mad dash for new rules to protect the ‘integrity’ of the Premier League, just because Newcastle are showing signs of being a threat. The likes of Man Utd, Spurs, Liverpool, Chelsea and Arsenal all fearing a new competitor, instead of just another club making up the numbers.
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