FootBiz newsletter #16: EFL, Barcelona, games being moved abroad and Brighton's loan repayments

A lot of great feedback last week to our piece with Dan Ashworth, looking at the process of hiring an England manager in the wake of Thomas Tuchel’s appointment.

Less than two months into FootBiz and we have a really healthy audience receiving this newsletter twice a week, proving our thesis on launch that there were people out there who wanted more coverage of the finance/business/politics/laws of football.

We would still like to hear about what you want to read more or less of, and hopefully today’s newsletter helps you figure that out because it feels like quite a mixed bag.

Otherwise, get stuck in and remember to tell a friend where you read the most interesting analysis of the football business.

Table of Contents

• EFL to get stricter

• Barca vs Atletico in Miami?

• No review of NUFC deal

• For premium members

• Brighton up Bloom repayments

• CAS nix Barca levers

• Club World Cupdate

• Everton beware?

• Arsenal look to expand Emirates

• M&A Murmurs

EFL to get stricter

EFL clubs are pushing ahead with plans to introduce stricter cost controls and financial rules from next season whilst those in the Premier League continue to argue amongst themselves.

In the most significant proposals to be put to a vote since plans to introduce a salary cap were defeated in a legal challenge by the PFA three years ago, the clubs will be asked to approve a series of stringent new restrictions at their AGM in April.

The EFL will follow the Squad Cost Rules model currently being trialled by the Premier League, which they have borrowed from UEFA, but the spending restrictions will be far stricter. 

Under the current proposals agreed by the EFL Board, clubs in League One and League Two will be prohibited from spending more than 60 per cent of their revenue on player wages and transfer fees, plus an additional equity investment of up to £500,000 from their owners. In the Championship the spending cap will rise to 70 per cent of revenue, but no additional owner investment will be permitted.

The SCR system currently being trialled by the Premier League is based on limiting spending to 85 per cent of revenue, although there is no guarantee the clubs will agree to implement it formally next season. The Premier League clubs remain hopelessly divided and their priority for the rest of the season will be to agree on how to redraft the Associated Party Transactions Rules, after elements of them were deemed unlawful by the arbitration panel which heard Manchester City's legal challenge last summer.

The EFL strongly opposed Birmingham City’s proposal to play a League One game against Wrexham in the United States.

FootBiz understands Birmingham’s ownership group are incredibly keen to play a league match in the US and use minority owner Tom Brady to boost their profile Stateside.

Wrexham, whose brand is probably bigger in America than it is in North Wales, would be ideal opponents but even as the EFL seeks a wider audience there was little desire to allow games to move abroad.

Speaking of which….

Barca vs Atletico in Miami?

The Daily Mail report that Barcelona’s home league game against Atletico Madrid scheduled for December 22 is due to be switched to Miami in La Liga’s first-ever overseas league game.

It would be the third match that the Spanish league has attempted to take across the Atlantic, with a Barcelona vs Girona fixture and a later game between Atletico and Villarreal both running into fierce opposition and eventually reverting to their usual stadia.

Disgraced former Spanish FA chief Luis Rubiales, the long-time nemesis of La Liga president Javier Tebas, is now out of the picture and relations between the two bodies have improved.

That said, when asked about the potential Miami fixture, a source at La Liga urged a bit of caution even with Rubiales gone.

“Tebas has said 25/26 and as far as I am aware that is still the plan.

“A lot of things would need to happen for a La Liga match to switch to the United States in two months and I see it as difficult.”

Hard Rock Stadium in Miami was the venue for the first-ever overseas clásico between Barca and Real Madrid, and given that its owner Stephen Ross also owns Relevent (with whom La Liga have a joint venture, La Liga US) it is almost certain to be where the first La Liga game overseas happens… when it eventually happens.

No review of NUFC deal

You may remember the Premier League proudly boasting that it had received “legally binding assurances” that Newcastle United’s new owners PIF were not controlled by the Saudi state when they approved the takeover of the club.

So some people within football are asking what the consequences would be if those assurances were, to use the scientific term, absolute bollocks?

To bring you up to speed: The Telegraph this weekend reported on a cache of leaked WhatsApp messages from former co-owner of Newcastle, Amanda Staveley, that confirm the involvement of crown prince Mohammed Bin Salman in the takeover process.

When approached by newspapers over the weekend, the Premier League declined to comment and is not expected to take any action or review the deal.

The Premier League had convinced themselves that there was sufficient separation, with their own rules banning club ownership by states or governments. Even as MBS’ involvement appears to be far greater than previously revealed, the other notable revelation from the leaked messages is the enthusiasm from the Tory government in Britain to wave the deal through.

As a side note: the timing of the leak is interesting given Staveley’s attempts to take a minority stake in Tottenham Hotspur, something that would require the very same Premier League approval.

For premium members

If you aren’t a premium subscriber yet, please consider it. Starting at just £3.99 a month of £40 a year.

Read more:

• What is the value of an academy? Owners increasingly view them as an economic engine but why are we so quick to write off the sporting conveyor belt?

• Premier League politics: How the dynamics of the league's owners have shifted once again

• From the Championship to the Champions League: How Aston Villa achieved the almost impossible

Brighton up Bloom repayments

Brighton are accelerating existing plans to repay the hundreds of millions of interest-free loans provided to the club by owner Tony Bloom on the back of their shrewd work in the transfer market. The club paid back £33 million to Bloom last summer after booking a Premier League record profit of £122.8m in the 2022/23 financial year, and another significant repayment is expected at the end of this season.

That £122m profit did not even include the British record £115m sale of Moses Caicedo to Chelsea in August 2023, so another another healthy surplus is expected in the club's next set of accounts to June 2024 of which a big sum will go back to their owner.

Brighton insist they always intended to repay Bloom, whose loans to the club made over more than a decade now stand at £373m, and are now in a position to do so having established themselves in the Premier League and redeveloped a state-of-the-art training ground. 

Albion are not concerned that Bloom's lending to the club could have a negative affect on their PSR position following the recent arbitration ruling that shareholder loans should be treated as an associated party transaction, and therefore subject to interest-payment calcualtions.

All of Bloom's loans to the club were made before 2021 when the Premier League's controversial APT rules were introduced, so would not be subject to any recalibration of the regulations.

CAS nix Barca levers

Barcelona’s financial chicanery over the past few years is beginning to catch up with them, and the club are now expected to fail UEFA’s Financial Fair Play (FFP) compliance after the Court of Arbitration for Sport (CAS) ruled against them on Friday.

The basic details are:

• Barca had been contesting a €500k fine from UEFA for misclassifying €267m of income from the sale of 10% of their portion of La Liga audiovisual rights to investment firm Sixth Street. Barca had tried to report the windfall as operating income when UEFA rules would deem it “profit on the sale of intangible assets”.

• CAS agreed with UEFA that Barca had deliberately misled them, and that it had a significant impact on breakeven requirements (they would otherwise have failed them)

• CAS said it considered UEFA’s fine (that Barca were appealing) to actually be quite “mild” given the offences.

This recalculation would be enough to put Barcelona in trouble with UEFA’s financial rules on its own, given the monitoring period takes in three seasons.

But Barca sold an additional 15% of rights to Sixth Street in July 2022 - meaning they are destined to fail FFP tests.

What punishment they will face for doing so is up to UEFA, but this judgement will affect the Spanish club for a few years.

Elsewhere in Barca news:

• the club initiated a transfer of €1m after an email purporting to be from Robert Lewandowski’s agent, Pini Zahavi, requested the sum. Only… it was not Pini Zahavi - full story

• At the general assembly, members approved the accounts for last season in which Barca insist they made a profit despite not really making a profit

Club World Cupdate

“A new era for club football will kick off when FIFA stages the greatest, most inclusive and merit-based global club competition right here in the United States.”

That might sound a bit like Donald Trump’s superlative bravado but those are, in fact, the words of FIFA president Gianni Infantino on his organisation’s Club World Cup.

“Merit-based” is certainly an interesting way of looking at Inter Miami’s sudden inclusion in next summer’s much-discussed tournament.

Inclusion is the key word. ‘Qualified’ would be a bit rich given they have been shoehorned into the competition by FIFA for glaringly obvious reasons, becoming the only team of the 32 to ‘qualify’ on the basis of their domestic performances rather than their achievements in continental competition (which is supposed to be the point of the whole thing).

FIFA announced over the weekend that Inter Miami were in after winning the MLS Supporters’ Shield - the trophy given for finishing top after MLS’ regular season.

Would the Columbus Crew would have been fast-tracked into the CWC for achieving the same thing, before a playoff game has even been played? Probably not, but for a tournament that is already facing serious commercial headwinds the presence of Lionel Messi at this tournament becomes something of a non-negotiable.

Stinks a bit though.

Everton beware?

Everton’s protracted takeover by 777 Partners The Friedkin Group John Textor The Friedkin Group is progressing, with a high court judgement last week effectively putting 777 Partners into bankruptcy.

A-Cap took over the Miami firm’s assets but also the £200m loan to Everton, and the understanding is that The Friedkin Group reached an agreement with A-Cap over that debt before re-entering exclusivity to buy the club.

The deal can not close before a New York civil case between 777 and Leadenhall, but things are moving in the right direction.

The full portfolio of 777 clubs is currently being sold by Moelis on behalf of A-Cap.

In the background of this Everton deal, though, things haven’t been easy for TFG in Italy.

Roma Ultras who usually occupy the Stadio Olimpico’s Curva Sud did not turn up for the first 15 minutes of the weekend’s defeat to Inter Milan.

Instead, they left just one banner on the empty end of the stadium:

“15 minutes of absence because we are sickened by this management”

A second banner, unfurled once fans had entered the Curva, read:

“Friedkin: your absence is so evident that you sent a Frenchman to talk.”

Arsenal look to expand Emirates

A report in The Times states that Arsenal are exploring ways to expand the Emirates Stadium.

While it seems like only yesterday that the Gunners left Highbury to move to their new home, they have been playing at the Ashburton Grove site since 2006 and their shiny, 60,000-seater home has been somewhat overtaken in terms of modernity and capacity by their rivals.

Chief among those, of course, is Tottenham’s new stadium which is arguably the best modern ground in Europe. Liverpool have been almost continuously working on their own stadium too, though, and with Manchester United set to renovate or rebuild Old Trafford and Newcastle going through the same process, the arms race for both gameday and non-football events revenue is fully ablaze as clubs seek broader and greater revenue streams.

M&A Murmurs

There are whispers that there is an MLS franchise that could not only transact but possibly move cities as well 👀