After the Saudi state’s sovereign wealth fund took control
of Newcastle, a freeze on any clubs signing commercial deals with companies
linked to their investors was rushed through temporarily by rivals in October
to prevent them being used unfairly to comply with financial regulations.
But Premier League clubs agreed at a meeting on Tuesday to
introduce regulations that mean sponsorships from companies associated with a
club’s owners can resume but will have to be approved by the competition’s
board.
The Premier League will assess if deals such as jersey
sponsorships and stadium naming rights have been negotiated at a fair value
that other clubs could expect to generate from similar contracts rather than
being inflated. The league will weigh up the value of the deal against a database
of similar transactions and consult independent assessors.
Premier League rivals were worried Newcastle will use
friendly sponsorship deals with related parties to help it comply with
financial fair play rules that are in place to prevent rich clubs from spending
unchecked. Under league rules, clubs cannot make losses exceeding 105 million
pounds ($144 million) over a rolling three-year period.
Clubs will also have to declare any payments to players,
managers and their officials from companies associated with the ownership to
assess if they are for legitimate work rather than a means of offloading some
of their main salary.
Saudi Arabia’s Public Investment Fund bought an 80% stake in
Newcastle to end the ownership of retail tycoon Mike Ashley.
PIF provided the league with legally binding guarantees that
the kingdom does not own the club, while being unable to say publicly how that
fits with the company board being headed by the Saudi crown prince and mostly
featuring government ministers.
The remaining 20% of the club is owned by PCP Capital
Partners, which is fronted by takeover broker Amanda Staveley, and the Reuben
brothers who are property investors.
The northeast club, whose jerseys are sponsored by a Chinese
gambling firm, is fighting relegation and can’t sign any players until the
January transfer window.
Another Premier League club, Manchester City, also has
ownership linked to a country. City has been controlled since 2008 by Sheik
Mansour, a member of Abu Dhabi’s royal family and deputy prime minister of the
United Arab Emirates. Abu Dhabi’s national carrier, Etihad, sponsors the
jerseys and stadium at the reigning champion. -AP