Premier League clubs vote to block Newcastle sponsorship deals at emergency meeting
Oct 19, 2021
The hostility among Premier League clubs to the Newcastle United takeover was underlined on Monday when they voted through legislation designed to prevent the Saudi owners from striking lucrative sponsorship deals.
Newcastle made it clear at the emergency meeting of all 20 clubs that they considered the rule change, which will temporarily ban commercial arrangements that involve pre-existing business relationships, to be anti-competitive. They were represented by Lee Charnley, the incumbent managing director, rather than Amanda Staveley, the director and minority stakeholder, who is now responsible for running the club on a day-to-day basis. Charnley is understood to have made it clear that his club had legal advice to say that the amendment was unlawful.
But the clubs pressed on with the vote and it was passed with 18 votes in favour and only Newcastle against. Manchester City abstained. It is believed that they did so on the basis of legal advice that the process was unlawful. City, who are owned by the Abu Dhabi United Group, have had deals that are known as related party transactions. An example was the one that saw Etihad Airways, the Abu Dhabi government-owned carrier, sponsor them.
Many of the clubs in the Premier League are worried that Newcastle’s Saudi owners might conclude deals in the oil-rich Kingdom which could give them an advantage. The clubs want pre-emptive measures to be put in place that would either prevent this or ensure that fair market value was paid.
The rule will be in force for the next month – and it will apply to all 20 clubs – but many of them want it or something similar to become a permanent feature. A working party is to be set up – comprising a cross-section of clubs – to investigate what, if any, changes should be made. Newcastle have been asked whether they would like to be on it.
The Premier League was already looking into such issues and remains involved in a long-running investigation into whether City have breached financial fair play regulations. City have denied any wrongdoing.
Following the Newcastle takeover, the 19 other clubs demanded a special meeting with the League, wanting to understand why the deal had been signed off. That meeting took place last Tuesday, with some clubs attending in person at the league’s Paddington HQ and others dialling in via conferencing software.
Straight after it, the 19 clubs met on their own to discuss the financial implications of having the Saudis as competitors. It led to the draft of the temporary ban on related party transactions – Newcastle would be notified of this – and then to Monday’s meeting.
