The Premier League has set the stage for a pivotal meeting later this month, as it looks to overhaul the sponsorship regulations that were recently ruled unlawful.
This follows a legal challenge from Manchester City, who took the league to tribunal over the rules.
The meeting, scheduled for November 22, will be a tense gathering of top-flight clubs in Central London, where a vote will decide whether changes to the regulations governing Associated Party Transactions (APTs) will be approved.
The Proposal and Potential Impact
A 14-page document outlining the proposed changes has already been sent to the clubs ahead of the meeting, promising a heated discussion at the prestigious Nobu Hotel in Portman Square.
These changes aim to address the concerns raised after a panel deemed the current sponsorship rules unlawful in October.
The hope from league officials is that the amendments will finally bring some resolution to the deep divisions within the Premier League, though it remains unclear how the clubs will vote.
The main focus of the proposed changes is the inclusion of shareholder loans, which were initially excluded from the rules.
These loans, given to clubs by individuals or entities with stakes in the team, are now part of the revisions.
The proposed changes also include adjustments to how sponsorship deals are evaluated, specifically in determining whether a deal reflects fair market value (FMV).
Legal Backdrop and Manchester City’s Role
Manchester City’s challenge of the sponsorship rules came after the Premier League introduced new amendments in February, shifting the burden of proof onto clubs to demonstrate that their sponsorship deals meet FMV standards.
This legal move by City followed the Saudi-led takeover of Newcastle in 2021, when the original FMV rules were first introduced.
City’s legal team, led by Simon Cliff, was quick to respond to Premier League Chief Executive Richard Masters’ comments about implementing the changes quickly.
Cliff dismissed Masters’ assurances, accusing him of misleading clubs and calling for more careful consideration of the amendments before any hasty decisions were made.
The Vote and What’s at Stake
A total of 20 votes will be cast at the meeting, and for the amendments to fail, seven clubs must oppose the proposals.
The inclusion of shareholder loans remains one of the most contentious points, with some clubs benefiting from the current system likely to resist change.
Additionally, the Premier League may need further clarification from the tribunal panel to ensure that these changes meet the legal requirements set out.
The changes to the FMV definition are also significant.
The proposed revisions remove the phrase “in normal market conditions,” and redefine the FMV standard from what “could” be sold to what “would” be sold.
This could open the door for companies linked to countries with aggressive branding strategies, like Saudi Arabia, to pay a premium for sponsorship deals.
What Happens Next?
As clubs prepare for the vote, the debate over these changes is expected to intensify.
If the amendments pass, they will take effect immediately, reshaping the way sponsorship deals are evaluated and potentially resolving the legal challenges that have been hanging over the league for months.
However, with various clubs still uncertain about the impact, the November 22 meeting will be crucial in determining the Premier League’s future approach to sponsorship regulations.
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