FootBiz newsletter #124: Paramount and Sky win big in UEFA rights auction

How significant is today’s Premier League meeting?

Racking our brains, it’s almost certainly the most consequential owners meeting since the league attempted to navigate the hopelessly lose-lose situation of the Covid-19 pandemic — the handling of which by Boris Johnson was unsurprisingly excoriated as “inexcusable” in the official inquiry yesterday.

The Prem supremos, by coincidence, will meet this morning in a London hotel named after the former Prime Minister’s hero, Winston Churchill.

This time around there will be no surreal discussions over deciding the league via a points-per-game mechanism, switching games to neutral stadiums or an agreement to pay tens of millions of pounds to broadcasters in rebates, but the decisions taken could materially alter the nature of the Premier League for years to come. Or perhaps not.

Football as a sport and an industry is rarely comfortable with change, but after almost two years of consultation over bringing in new financial regulations to replace the much-derided Profit and Sustainability Rules, reaching a consensus is proving problematic for the 20 clubs. Two of the new proposed regulations to replace PSR — the Squad Cost Ratio (SCR) and top-to-bottom anchoring — have even been in operation in shadow form in the Premier League for the last 18 months, yet still some clubs seemingly cannot make their minds up. 

It had been thought that the introduction of SCR, which would cap spending on player costs at 85 per cent of revenue, was inevitable as the nine English clubs competing in UEFA competitions are already subject to a more restrictive 70 per cent cap that is calculated in a similar way, but a revolt from the Premier League’s middle ranks has now put that in doubt.

The Daily Telegraph reported this week that Bournemouth, Crystal Palace, Burnley, Fulham and Brentford are thought likely to vote against a proposal that needs 14 votes to be carried, with Leeds increasingly minded to join them, leaving the outcome on a knife edge.

Although PSR is unpopular with those clubs who have breached the regulations, such as Everton and Nottingham Forest, and others who want to spend big like Aston Villa and Newcastle, the more sustainably run clubs such as Brentford see no need to change things.

While SCR is in many ways a maintenance of the status quo, top-to-bottom anchoring would have a more profound impact, particularly in the longer term, with the top clubs' revenues (and therefore potential spending power) destined to continue growing due to the expansions of both the Champions League and Club World Cup. For the gilded elite, UEFA and FIFA’s wang-measuring contest is good business. The Premier League itself believes that this is all required to keep the top flight’s competitive balance, but getting 14 clubs to agree is proving challenging.

Anchoring has always been viewed as the more radical measure, as in addition to the SCR it would limit each club’s spending to five times the bottom side’s central revenue (approximately £550m at present) in what the big clubs as an unnecessarily restrictive move. They argue that it would reduce their ability to compete in Europe, which would lead to fewer qualification places, lower media and commercial revenues, and is therefore bad for everyone. The reality is that the most important part of anchoring will be the setting of the multiple, and even if anchoring were enacted, that multiple (on which the effectiveness of the whole regulatory regime would rely) would constantly be under the microscope and subject to pressure.

Both Manchester clubs, Chelsea and Villa have opposed anchoring from the outset, while The Times reported on Tuesday that Arsenal were considering switching sides by joining them, thus narrowing the Premier League’s path to victory. An Arsenal U-turn would be hugely significant, as under former executive vice-chairman Tim Lewis who left the club in September they were amongst the main proponents of anchoring.

Arsenal’s voice carries weight at the Premier League table even without Lewis banging it (which, coincidentally, one source told The Guardian in September was his favoured method of communication) and there is a feeling they could still bring others with them.

While The Times also reported that the planned votes could even be scrapped, the Premier League is adamant they will go ahead. Unlike the inevitable reputational wreckage of the Covid inquiry, however, the outcome remains far from clear.

Table of Contents

• Paramount big winners in Champions League auction

• Sky Sports win back some UEFA rights

• Where’s FIFA’s $250m solidarity fund?

• Cristiano Ronaldo at the White House

• You Haiti to see it 

• Arsenal’s Rwanda deal finally ends

• Real Madrid’s Apple docuseries

•  Birmingham City unveil 60k stadium plan

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