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Premier League clubs are reportedly determined to force through new rules which will prevent Newcastle United from signing any massively lucrative sponsorship deals with companies related to their ownership group. Newcastle are 80 per cent owned by Saudi Arabia’s Public Investment Fund and the league’s other clubs are concerned that the link could lead to unfair financial bonuses for the Magpies.
Newcastle’s takeover by PIF, PCP Capital Partners and RB Sports Media went through on October 7 after the Premier League approved the £305million sale.
The deal has proved hugely controversial due to PIF’s supposed separation from the Saudi Arabian state.
The Premier League pushed through the takeover from Mike Ashley after receiving legal assurances that PIF is a separate entity to the state, despite the fact that five Saudi ministers sit on the PIF’s board and its chairman is Mohammed Bin Salman, the Crown Prince and de facto ruler.
Hostility remains, however, with the other 19 clubs still trying to limit the financial power that Newcastle can benefit from, with PIF holding assets worth £250bn.
According to The Times, there is anger at Premier League chairman Gary Hoffman and chief executive Richard Masters for approving the Newcastle takeover.
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And the clubs are now intent on making sure that any sponsorship deals done are reflective of market value.
Any new “related party” sponsorship deals have already been temporarily banned in the wake of the takeover after 18 clubs voted for it, Newcastle against and Manchester City abstaining.
Now a working party involving half a dozen club representatives has been set up to look into changing the rules permanently.
A Premier League shareholders meeting has been called for November 11 where it is expected the working party will present their recommendations.
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In the meantime, the temporary ban on related-party deals is expected to continue until a permanent rule is implemented, which could take a long time.
While UEFA already has a rule in its financial fair play framework, the Premier League’s existing rules only review sponsorship deals if they are stated in clubs’ accounts as related party transactions, such as Leicester City with King Power.
Manchester City, who are owned by Abu Dhabi, have sponsorship deals with state airline Etihad, but they are not registered in the club’s accounts.
There is a concern with Newcastle, therefore, that the club could sign a huge commercial deal with state oil company Saudi Aramco, which is chaired by Yasir Al-Rumayyan, who is also the new non-executive chairman of Newcastle.
The Times reports that ‘many Premier League clubs’ believe this rule needs to be ‘tightened up urgently’ to prevent an imbalanced financial playing field.
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