One hundred and sixty-five days. That’s how long a Premier League club had to wait for one particular associated party transaction (APT) to finally be approved by the top-flight after aspects of the deal had to be renegotiated.
These same regulations, which were in place between 2021 and 2024, have subsequently been declared ‘void and unenforceable’ by a tribunal panel. It therefore begs the question: could Newcastle United have a case for compensation and, if so, how would the Magpies prove it? Let’s ask Stevie Loughrey, a partner at Onside Law, who specialises in commercial litigation and arbitration.
“From a Newcastle perspective, if they submitted deals for assessment under those rules – for example, the Sela and Noon deals – and the regulatory department of the Premier League applied significant reductions to those deals because they did not consider them to be of fair market value, Newcastle would have a pretty strong claim for compensation on the basis of being deprived revenues the club would have otherwise been entitled to,” he told ChronicleLive. “Whether Newcastle want to go on the offensive with the Premier League is another matter.
“The Premier League is ultimately owned by its members. Most clubs, unless they are in Manchester City’s position, don’t wish to attack the entity in which they have a stake. However, if Newcastle and other clubs that may have had deals reassessed at lower rates were minded to, on the basis the Premier League contended this lower rate was fair market value, it seems to me they would have a pretty compelling legal claim.”
Newcastle, of course, have not been ‘minded to’ as of yet and the Magpies’ more restrained approach has certainly paid off. Although Newcastle have stopped short of launching their own legal fight, or publicly admonishing the actual framework of the APT rules, the black-and-whites have repeatedly stood alongside Manchester City in voting against the regulations and proposed amendments.
Manchester City also built a successful arbitration case with the help of witnesses and a written submission from Newcastle while the takeover proved a crucial reference point in the champions’ argument after the Citizens suggested that the evidence on which the Premier League relied on to introduce APTs included ‘fear-mongering’ about the buy-out. However, the success of that particular legal challenge does not suddenly mean that Newcastle are going to change tack as Loughrey explained.
“You can’t disguise the fact Man City have given the Premier League a bloody nose here,” he said. “They have landed a significant blow and other clubs such as Newcastle could use this as a Trojan horse capitalising on the success they have had challenging these rules.
“However, Man City’s successes to date may ultimately prove academic and be little more than a footnote when the history of this saga is written if the Premier League succeeds in the much bigger matter – the 115 alleged breaches of Premier League rules by Man City. We will see shortly but Man City have definitely scored a tactical and reputational win with their challenge to the APT rules. There was always an element of deflection and diversion to this case.
“It depends on whether Newcastle’s owners and its exec team wish to go on the attack and bring a claim for compensation. They may just want to keep their powder dry for a bit and see how things play out.
“Just because these rules have now been declared void and unenforceable, clubs such as Newcastle need not rush to bring a claim immediately. They could just take their time, for example, to see whether any new deals or old deals they have resubmitted for reassessment are approved under the new APT rules introduced in November, 2024 before making a call on this. They may also want to see what happens with Man City’s second challenge – launched on January 20 – in relation to the November, 2024 rules.”
Whatever happens in the follow up case, APT1 backed up Amanda Staveley’s assertion that there was a ‘fear that we would have an unfair advantage’ after the former Newcastle owner was left angered by clubs introducing the rules in the first place. The tribunal heard that an unnamed executive even contacted the Premier League on behalf of his club and 10 others to request that notice be given of a vote to introduce a short-term ban on related-party transactions just five days after the takeover in 2021. When cross-examined by Manchester City’s legal team over two-and-a-half years later, this senior figure openly admitted that the Newcastle buy-out ‘heightened’ concerns and ‘encouraged the clubs to seek action’.
The tribunal accepted that the acquisition was the ‘catalyst for the consultation process’ leading up to APTs being introduced and agreed that there was no document recording any discussion about a revision to PSR rules until Richard Masters, the top-flight’s chief executive, wrote to member clubs following the aforementioned email. That certainly did not go unnoticed by Loughrey.
“There was obviously a concern among other clubs that the PIF investment into Newcastle would result in an imbalance in spending power because Newcastle may enter into inflated sponsorship deals with associated parties i.e. other Saudi owned companies,” he added. “Their concern was that Newcastle would have an unfair sporting advantage.
“That was clearly the driving force behind the introduction of the APT rules in the first place. They were introduced just a few months after the Saudi investment was completed. I don’t think anyone can dispute that now – it was the main reason the other clubs wanted the old related party transaction rules to be made tougher.”
View news Source: https://www.chroniclelive.co.uk/sport/football/football-news/a-strong-claim-newcastle-united-31044097
