FootBiz newsletter #24: Why Barcelona and Lyon both need to find €100m... quickly

It is a big week for the politics behind the Premier League, with the drawn-out saga of the Associated Party Transaction (APT) rules set to - hopefully - conclude by the time domestic football returns next weekend.

The league and its chief executive Richard Masters will spend the next few days lobbying clubs for support in their attempt to amend the competition’s APT regulations ahead of a potentially crucial meeting in London on Friday.

The Premier League executive want to put their proposed changes to a vote, but as is their preferred strategy now, will only do so if they are confident of getting the two-thirds majority required for the new rules to be introduced. Manchester City have already launched a counter offensive, writing to the other 19 clubs last week with a firm recommendation that the process be put on hold and the existing rules deemed void.

Fighting on, the league will not bow to this latter demand from City, but if they do not receive enough indications of support from club executives in private conversations this week then the vote could be postponed. 

The existing rules, elements of which were deemed to be “unlawful” by an arbitration panel in September were only introduced by the Premier League in February. That vote passed by the narrowest of margins, with 12 of clubs voting in favour and six against. 

The Premier League motion was only carried as a result of two abstentions, and they are anxious to avoid another tense meeting this week.

Given the strength of some of the feeling involved and what’s at stake, the may struggle to succeed on that front. As for the vote, well that’s anyone’s guess for now but if you do hear it has been postponed in the next 48 hours then you’ll at least know why.

What else is going on in the business of football this week?

Table of Contents

• Debt Tex its toll

• What they’re saying

• Le Havre nots

• Qatar hero

• Premium subscribers

• Big Ars

• England eye US friendlies

• Air a grievance

• Barca just did it (but didn’t)

• Leave your X

Debt Tex its toll

Most people - but not all - see it as a positive trend that there are increased levels of financial controls across European football as leagues try to force clubs into being more sustainably run, attracting more investment and preventing age-old community institutions from going bust.

In France, the Direction Nationale du Controle du Gestion (DNCG) is the organisation responsible for regulating the French football league and they are one of the stricter bodies, forcing teams to submit not just annual budgets but proof of funds, requiring them to attend mid-season update meetings and a number of other guardrails designed to stop teams falling into trouble.

Waiting outside the DNCG’s mid-season hearing with Olympique Lyonnais, the media hoped to hear from owner John Textor about how the club’s worrying financial picture was viewed by the regulator, particularly after he was given a slap on the wrist by them last year and then proceeded to spend around €110m net on transfers in the summer anyway.

“It went well” said Textor as he emerged.

The DNCG, it would seem, disagreed.

The line between optimism and delusion is narrow, and Textor’s optimism does appear to be quite worryingly misplaced, with questions increasingly being asked about the viability of his Eagle Football vehicle after Lyon were provisionally relegated to Ligue 2 for breaching the French league’s financial rules and failing to provide the required guarantees. They were also banned from signing players.

Textor then called a press conference for Saturday, which journalists in attendance reported began an hour late with no explanation before being told they could not report his words in real time nor record them for broadcast because Textor was sick with a cold.

Eventually, he told them “We will not be relegated, there is no chance, per L’Equipe.

“I know that our situation makes some sceptical. I prefer the Premier League system which punishes clubs differently.

“We have resources that go well beyond this club. Even if we fail on all our global initiatives worth €700 million our owners will not let the group sink. There is no chance of being relegated.”

Again, that line is narrow.

Lyon have repeatedly crossed the DNCG as Textor’s multi-club operation has grown but the club has not come close to providing the financial returns required. Lyon’s net spend of €110m this summer was inexplicable at the time but now looks even worse, with the American admitting the club needs to find €100m by the end of the season.

It is entirely feasible that he could raise that by selling players (though he said he doesn’t need to) or his stake in Crystal Palace, which has been formally up for sale since May. He now claims there are four bidders, though confirming murmurs in the industry (and this newsletter) he admitted they are all at a valuation below what he had expected to get.

Selling his stake in Palace was originally supposed to free up the American businessman to buy a Premier League club but may necessarily have to plug the hole at Lyon as another wild chapter unfolds in his Eagle Football empire, which reported debts of over €500m this month.

Textor has experienced success in Brazil, where Botafogo are title challengers domestically and could yet win the South American equivalent of the Champions League, the Copa Libertadores. He does, though, face disciplinary action for levelling accusations of corruption at the league and its officials.

In England it is hard to say he has been either successful or unsuccessful, likely making a small profit on his non-controlling stake at Crystal Palace despite its lack of influence, but ultimately failing to gain control of a Premier League club as he has long dreamt of. His bid for Everton never had the financial backing required and Dan Friedkin is now close to taking over on Merseyside.

Interestingly, Textor’s Palace co-owners may be about to put the squeeze on him if he doesn’t sell his stake by January, knowing the American would have to match every pound they put in to sign players or see his stake diluted. That scenario is a real possibility, according to The Sun’s Alan Nixon, who is well connected at Palace.

Belgian club RWDM have been treated more like a warehouse, having players from elsewhere in the Eagle Football network parked there while local fans protested and the club went straight back down to the second tier. 

When the DNCG told Lyon they couldn’t afford to spend €23m on Ernest Nuamah last year, RWDM bought him - smashing their transfer record by many multiples - before he was loaned to the Ligue 1 club. Nuamah was sold to Lyon this summer without ever representing RWDM.

Lyon has not been a total failure in a footballing sense, with the club recovering from a dreadful start last season to sneak into European competition, but the exorbitant price that Textor paid for Lyon, and the amount borrowed to do so, is what is causing issues for him and the whole group. Regular Champions League football would be needed to begin filling in the financial hole, with Textor already having sold off the women’s team to multi-club owner Michelle Kang and the LDLC Arena to Lyon’s former owner Jean-Michel Aulas in order to raise funds.

Eagle still plan to float on the New York Stock Exchange in Q1 of 2025, and three weeks ago announced a “comprehensive recapitalization plan targeting aggregate equity and debt financing of $1.1 billion.”

What they’re saying

“With the debts and the losses they make [at Lyon], you could make the argument that he should just turn over the keys,” said one multi-club investor.

Another investment figure speculated whether Ares Management, who provided an estimated $300m in funding to Eagle but want their money back, could have an opportunity to take over Lyon in the same way Elliott took over at AC Milan. 

“With the new TV deal here being a catastrophe, the Champions League is the only thing that could save them.”

Matt Slater of The Athletic, who has covered Textor’s group extensively, concluded: “John Textor says the French have misunderstood the genius of Eagle’s multi-club group, he can sell a few stars (he’ll find more) & bids are flying in for his Palace shares. Crisis? What crisis? But it’s all bluster. This is the beginning of the end.”

French journalist Romain Molina said the DNCG’s measures were overdue, and that Lyon “should have been relegated last year.”

Le Havre nots

Lyon weren’t the only club to fall foul of the DNCG, with perpetually unhappy (and for sale) Le Havre already having their wage bill limited by the DNCG last summer.

Le Havre are taking action against the league for receiving what they claim was an unjustifiably small piece of the private equity money injected by CVC Capital.

At the same time, they are banned from signing players this January and expect to sell players to make up some of their €10m shortfall, with an equity injection for the relegation-threatened club the only other path.

An observer notes to FootBiz that Le Havre and Lyon were also the two clubs most vocally opposed to Vincent Labrune’s re-election as LFP president and Nasser al-Khelaifi’s role in ‘saving’ the league’s TV deal with an advertising contract from Qatar Tourism that clubs are still protesting.

Qatar hero

In unrelated news, the French Super Cup will be held in Qatar in January as part of a €3m deal.

You can probably guess one of the clubs participating.

The game was originally scheduled for Beijing, China in August.

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Big Ars

Arsenal plan to one-up their north London rivals by adding just over 10,000 seats to the capacity of the Emirates Stadium in the next 12 months.

The Gunners have seen their once-shiny home surpassed by Tottenham’s superb new home on the site of the old White Hart Lane, but plan to pass Spurs once more by nudging over the 70,000 capacity mark.

Arsenal owner Stan Kroenke has immense experience and wealth in real estate, and the impressive SoFi Stadium complex in Inglewood, California has transformed the Rams from being an afterthought NFL franchise in St. Louis into being one of the highest-revenue teams in world sports in LA.

The good news for Arsenal fans is he won’t need to move them hundreds of miles to boost their gameday revenues, and an extra 10,000 seats or so should do the trick.

England eye US friendlies

England are hoping to follow in the footsteps of Premier League clubs and travel to the US to play some money-spinning friendlies next June.

The Three Lions secured a World Cup qualifying playoff with their recent Nations League results and now head into December’s World Cup qualifying draw knowing they’re in an incredibly strong position to secure passage to 2026. 

Thomas Tuchel’s first international break as boss, in March, would therefore feature two World Cup qualifiers though there is a chance that England only have one qualifier if they’re drawn in a group of four teams rather than five during the digital-only draw next month. 

England are hopeful the June window can be kept free of qualifying games so Tuchel can take his squad on a summer training camp in the United States, but must wait for the draw.

The German is likely to be without some of his biggest stars as Manchester City and Chelsea players prepare for action in FIFA’s expanded yet under-fire Club World Cup, also due to take place in the US this summer. 

Cole Palmer, Jack Grealish, Kyle Walker, Rico Lewis, Levi Colwill, Reece James and Conor Gallagher, who scored his first England goal against Ireland on Sunday, are among those who would miss the camp.

Go deeper: FIFA fights to save its under-fire Club World Cup

Air a grievance

Arsenal’s decision to instruct lawyers to prepare a potential compensation claim against Manchester City for loss of income if their Premier League rivals are found guilty of major breaches of Financial Fair Play regulations has created a diplomatic issue for the club’s main sponsors, Emirates. 

The United Arab Emirates airline have close links to City’s own sponsors, Etihad, and their joint owners, the ruling family of Abu Dhabi. 

Emirates are owned by the Dubai government, but signed a partnership agreement with Etihad last year in which the two airlines agreed to share routes and aircraft. There have previously been talks over a merger, but this failed to materialise. 

Arsenal’s claim against City is based on their belief that they may have lost prize money and sponsorship income as a result of the Premier League champions allegedly boosting their income with bogus sponsorship deals.

One of the allegations against City is that the club colluded with Etihad to disguise the source of their sponsorship income. The Premier League allege that only £8m of a £67.5m-a-year deal was paid by Etihad between 2012 and 2016, with the rest coming from the Abu Dhabi United Group. 

Manchester United, Liverpool and Tottenham have also instructed lawyers to prepare a possible claim against City. Coincidentally, those four clubs were the target of a protest by a Manchester City fan outside last month’s Premier League meetings (below)

Barca just did it (but didn’t)

Barcelona still need a windfall or a new investor for their troubled Barca Vision subsidiary to avoid breaching La Liga and UEFA financial rules, even after signing a big extension to their deal with Nike. 

Barca secured a 10-year extension to the deal that was due to end in 2028, and on far more favourable terms than before as it guarantees more money without performance clauses. The Catalans were estimated to have missed out on about €100m in performance-related bonuses as they endured a dry spell in La Liga that was only eventually broken when Xavi’s team won the title in 2022/23 - their only win in the last five seasons.

The club had tried to blow up their partnership with the American sportswear giants when they felt Nike had breached contract, though the courts disagreed and conversations soon turned to re-jigging the long-standing agreement instead.

By locking down more guaranteed money, Barca can further plot a way out of the financial quagmire they found themselves in after letting debts and losses rack up. 

While an earlier version of the Nike extension called for a nine-figure signing bonus to be paid to Barcelona to pad the current financial year’s accounts, it is understood that the club received advice that this would not fix their regulatory woes. 

As a result, the €158m signing bonus will be spread over the contract’s 14-year term. Helpfully, when you split the bonus over 14 years and add it to the €108m per year of the contract then the total narrowly passes Real Madrid’s €120m per year deal with Adidas - a stated aim of Barca president Joan Laporta. 

Industry insiders, perhaps unsurprisingly, are a tad sceptical of Barcelona’s numbers and insist they will have to sell players in January or, far more difficult, find a replacement investor for Barca Vision after German investor Libero pulled out. 

Go deeper: Barca lose CAS battle to set up FFP fight

Leave your X

You may not have noticed the (e)xodus from the social platform formerly known as Twitter but following in the footsteps of The Guardian, Werder Bremen became the first major football club that we are aware of to depart the Elon Musk-owned site.

How clubs balance audience/revenue numbers vs pressure to leave behind certain channels is yet to be seen but it was always likely to be the Germans, with their majority fan-owned clubs, who would lead the way.