Premier League moves to clamp down on Newcastle

The Premier League is setting up a working group on related party contracts, which will be populated by representatives from clubs who put themselves forward, to create long-lasting measures. The expectation is that they will report back in three weeks to discuss the solution they have come up with.

There are relatively few clubs in the Premier League that rely on major related-party contracts, which is why Newcastle’s submitted a letter claiming that rules forbidding or restricting deals of that nature would be discriminatory. Newcastle feel that new regulations are specifically targeting a very small group of clubs and owners.

Manchester City have been accused of earning heavily from related-party deals in the past. Reflecting on their abstention, one director told The Athletic: “It’s not that City will be massively affected immediately. They just don’t like the direction of travel.”

For now, the 18 clubs voting in favour has imposed a three-week moratorium on related-party sponsorship — a direct result of the fear that Newcastle would try to act quickly by arranging and announcing major new sponsors before all loopholes were closed. A draft version of new rules controlling related parties should be completed by the end of that three-week period, ready for debate and amendments.

It was a warning, as a well-placed executive put it, that Newcastle’s owners “can’t just waltz in and do what City did” after the club was taken over in 2008. The view of the 18 clubs is that almost all of their own commercial revenue is generated through conventional means. They argue that a system whereby owners can use related parties to secure vastly inflated and unrealistic income is unfair and in need of reform.

The aim is to establish regulations that not only limit related-party contracts but also require them to be approved by the Premier League before they are finalised, rather than fought over retrospectively. Clubs would be forbidden from taking the money and then arguing about it later.

Close attention would be paid to market value and inflated deals would be blocked. Industry sources estimate that Newcastle’s shirt deal is worth in the region of £5 million annually. A related company such as Disney trying to pay three or four times as much would be forced to explain how and why that valuation had been reached — and most likely see the agreement rejected.

Although all this is cloaked in good intentions, one is left feeling that a reinvigorated Newcastle is the target.

Kieran Maguire of the PriceofFootball has commented: 'All are motivated by self interest. Those at the top of the table didn’t like 6 into 4 for CL spots so like 7 into 4 even less. Those at bottom of table see one less potential relegation rival.'