FootBiz newsletter #48: Chelsea escape points deduction, PIF investing in DAZN and a major US lawsuit

And so it was that all the Premier League clubs found ways to avoid PSR punishments and we can go on with our month.

Which is just as well, because there is plenty to be getting on with.

But first, a trivia question: which seven nations are not recognised by the UN but are recognised by UEFA?

I’ll write a line here just so the answer isn’t directly below the question but if you want to make a guess without having it spoiled then do so now because I’m about to reveal.

I’ll add a gif too, just in case.

Your answer is: England, Scotland, Wales, Northern Ireland, Gibraltar, Kosovo and the Faroe Islands.

Because the United Kingdom of Great Britain & Northern Ireland is the actual country, of which the first four nations above are constituents. (I guess Gibraltar is too, but I’m not going there).

This has caused some issues in football in the past around various topics, including the naturalisation of non-British players and their eligibility to play international football and post-Brexit visa requirements.

Right now it’s opening up some interesting discussion around cross-border clubs like Cardiff and Swansea City, who are analysing whether it’s worth nuking their chance of ever qualifying for European competition via the English leagues that they play in and instead entering a Welsh cup that could give them a path to the Conference League.

Similarly for Rangers and Celtic, for whom the opportunity to join the Premier League has long since disappeared but not necessarily for their women’s teams, who might add value to the WSL.

More on that further down, but first here’s you menu du jour…

Table of Contents

• Chelsea to escape points deduction

• MLS and USSF in the dock

• The contradiction of Barcelona

• DAZN-PIF deal was real

• M&A Murmurs

• Textor update

• FA Wrex Welsh hopes?

• New firm?

• Estudiantes splashing the cash

Chelsea to escape points deduction

Chelsea look like they will escape a points deduction but have to pay a settlement to the Premier League over what they describe as “potentially incomplete financial reporting concerning historical transactions during the club’s previous ownership”, per The Times’ Martyn Ziegler.

For context, when Todd Boehly’s group were conducting due diligence on the west London club during the takeover process in 2022 they discovered a number of undeclared payments to Russian bank accounts regarding the transfers of Willian and Samuel Eto’o from Russian club Anzhi Makhachkala in August 2013 that were additional to the transfer fees. The PL have also been investigating a payment involved in Eden Hazard’s 2012 move to Stamford Bridge.

Chelsea settled with UEFA, paying a £8.6m fine, for the same offences in 2023 after self-reporting the historic discrepancies.

Secret payments of this type would typically lead to strong punishments from the authorities but as the Blues’ new ownership voluntarily reported them, and it was under a previous regime, there is the expectation that a settlement will close the case which Richard Masters has acknowledged is “something historic”.

Given Manchester City are in the dock for their own secret payments, one legal wag wonders out loud if a swift change of ownership would allow them to escape with a fine too?

MLS and USSF in the dock

An interesting legal case may sound like an oxymoron to most, but we will be keeping an eye on the NASL lawsuit in the USA, which promises to unearth some of the grubbier truths in American saahhhkerrr.

The original NASL was where Pele, Johan Cruyff and Franz Beckenbauer played in the 1970s. It was re-born in 2011 but ultimately shuttered again just a few seasons later in 2018 after failing to break through. NASL alleges that this was because Major League Soccer (MLS) and the US Soccer Federation (USSF) conspired against them.

MLS Commissioner Don Garber is among those due to testify, as well as FC Dallas (and Kansas City Chiefs) owner Clark Hunt and longtime big cheese of the American game Sunil Galati.

Galati’s twin roles with the USSF and MLS are particularly under scrutiny, with him and Garber described as “two peas in a pod” as NASL lost a 2015 vote for Division I status. In 2017, a vote to renew their Division II status also failed. These votes are at the heart of this anti-trust lawsuit, which alleges the USSF used its position as a regulator to unfairly stymie competition to MLS.

NASL is suing for $170m, but with it being an anti-trust case this amount would be trebled if awarded in their favour.

Some of the more nitty details will be amusing to follow, including a fake Twitter account operated by former NASL chairman Rocco Commisso (who is funding the suit) to post unpleasant messages about USSF and MLS figures.

Let’s see if this one gets settled before the most interesting witnesses take the stand.

The contradiction of Barcelona

Joan Laporta came out swinging.

Yep, the Barcelona president may have sold off everything that wasn’t bolted to the ground and factored each imaginable future revenue stream already but it doesn’t mean he’s going to lie down and take your criticism.

Oh no. Laporta instead appeared at a press conference this week to fight back against the critiques of fellow La Liga clubs, journalists and, in fact, anyone who has said a bad word about Barcelona or his administration of the club. That must include us?

For premium subscribers, Rob Draper digs into the twin contradictions of Laporta and Barcelona. The successful failures, or the failing successes?

DAZN-PIF deal was real

Talk has swirled for over a year now that Saudi Arabia’s Public Investment Fund (PIF) would invest in the heavily loss-making (but actively rights-buying) streamer DAZN.

PIF denied reports to that effect, saying they had “no plans” to invest in DAZN but it appears those plans have changed. SURJ, a division of PIF, is reported to be close to finalising the long-rumoured $1bn investment into Len Blavatnik’s sports streaming service fresh off the back of two monster deals.

First was the Club World Cup broadcast rights deal, where DAZN saved FIFA’s skin by buying the global rights to their under-fire competition and saving them from going territory by territory with the clock ticking down.

Second was the acquisition of Australian TV company Foxtel, a complex deal where News Corp and Telstra also ended up taking stakes in DAZN but still a rather expensive acquisition for a company posting such considerable annual losses.

Step in the Saudis who, as we mentioned, said they weren’t about to invest in DAZN only a month or two ago but who were the obvious people to do so - especially with Gianni Infantino’s new-found love of the kingdom and everything that comes with it.

FIFA sources have reiterated to FootBiz that SURJ were not involved in the Club World Cup negotiations, and insist they are not funding that deal.

There will be a lot of interest in DAZN’s moves from here on in, with the Club World Cup about to serve as a huge on-ramp that forces tens of millions of football fans to download their app and the streamer willing to make big moves on rights that could help them grow in the Americas.

M&A Murmurs

Investors looking at Preston North End have baulked at the club’s £37m valuation as the appetite for loss-making Championship clubs weakens.

The Hemmings family have owned PNE since Trevor Hemmings died in 2021, and have been looking to sell the asset for over a year.

While the club is a stable Championship outfit with a sensible approach to wages and has resisted the temptation to over-extend itself as others in the division have, Preston posted a loss of £14m on revenues of £16.9m.

The club still had debts of nearly £50m, though largely in the shape of interest-free loans from the Hemmings family.

Presidio Capital’s drawn-out acquisition of Hellas Verona is complete.

Former Roma CEO Italo Zanzi joins as executive chairman and said: “It is a profound honour to join Hellas Verona, a club that embodies the passion and heritage of the city of Verona.”

Zanzi had a rough time in the Italian capital but learned a lot, and takes Presidio into the club after completing a 100% buyout from Maurizio Setti.

Setti had narrowly saved the club from financial disaster previously and had been marketing the club for over a year. He will remain with the club as Senior Advisor of Football Operations.

“Now, a new chapter begins for the Club and for the City of Verona,” Setti said.

“I am confident that Presidio Investors will represent a great opportunity for Hellas Verona and that they will work tirelessly, giving 100%, to ensure the best possible future for this Club. I would also like to express my satisfaction in continuing my relationship with Hellas Verona through the new role. Through my experience, together with Presidio, I hope to continue achieving important results for the City and its fans”.

Textor update

After Monday’s incendiary comments, John Textor was always going to merit a follow-up in today’s newsletter.

(And that was before a full-strength Lyon lost to fifth-tier Bourgoin-Jallieu in the French Cup on Wednesday night.)

The head of France’s football regulator, the DNCG, responded to Textor’s accusations by saying the American doesn’t understand the rules (fairly obvious, given the provisional relegation and transfer ban) amid a broader fightback against Textor’s attacks on their office.

“Mr Textor’s statements on the alleged attachment of the DNCG to the league, or on the discriminatory treatment of (Lyon), demonstrate a clear and persistent lack of understanding of the rules governing the regulation of professional football in France,” said Jean-Marc Mickeler.

“French football deserves serious investors who respect its institutions and are committed to working in a spirit of cooperation and transparency,” he added.

Textor told The Athletic he had already apologised for his Monday comments about LFP president Vincent Labrune, who he described as Nasser al-Khelaifi’s “lapdog”.

He also confirmed to The Athletic that the leaked messages in which he insults star player Rayan Cherki and speaks disparagingly of Borussia Dortmund were between him and Paris Saint-Germain.

In related news, Textor this week said he would not sell players to PSG until he sits down “for a beer” with Al-Khelaifi.

We’ll almost certainly have more news on Eagle Football next week, with Sportsbank under exclusivity to invest in the group, a separate firm trying to acquire the 45% stake in Crystal Palace and Lyon still selling players to avoid an enforced relegation.

As trailed a few weeks ago, Crystal Palace shareholders injected nearly £40m into the club to fund January signings and work on Selhurst Park’s redevelopment.

John Textor has contributed to the injection, which prevents him having his 45% stake in the club diluted while he is already in exclusive talks to sell it to a group led by the Syed brothers.

In a filing at Companies House, Palace’s parent company announced it had issued 96,003 new “A2” shares, with a second filing arriving on Wednesday that said 116,445 new “B2” shares had also been allotted.

The raise totals £37.5m and around half of that will make its way across south London to Millwall, from whom Palace are expected to sign teenage starlet Romain Esse. The only question is whether they pay his clause outright or if the Lions will agree to installments.

FA Wrex Welsh hopes?

The complicated relationship between England and the rest of the United Kingdom's home nations continues to create opportunities for significant changes to football competitions, and of course the potential for conflict.

The FA of Wales [FAW] want the four Welsh teams who have played league football in England since 1912 - Cardiff, Swansea, Wrexham and Newport - to join a new Welsh League Cup from next season, which they project would raise an extra £3m per year for Welsh football. The four clubs have all signed up in theory, but are awaiting approval from the English FA, who have yet to give their blessing.

The EFL will also be consulted, which could raise complications, as some of the other 68 clubs in the three divisions have objections. The FAW proposal has the backing of the Welsh government and UEFA, who have agreed to grant the winners of the Welsh League Cup a place in the qualifying rounds of the Europa Conference League, making it an attractive proposition for the four England-based clubs.

In order to qualify for UEFA competitions via the Welsh League Cup they would have to sacrifice their chance of qualifying via English competitions, effectively writing off the (albeit remote) possibility of a club such as Wrexham reaching the Champions League.

Having Wrexham in the Europa Conference League would be a major commercial boost for UEFA however, given the size of their fan-base in the United States. Ironically a very different Wrexham were the first Welsh EFL club to qualify for Europe through a domestic pathway when they competed in the UEFA Cup Winners' Cup in 1995/96. The FA have a good relationship with their Welsh counterparts and are working closely together to deliver the 2028 European Championship, with Cardiff being given the opening game, but will be wary of upsetting the EFL.

A final decision is expected next month.

New firm?

A longer-term reorganisation project involving another offshoot of the FA is also underway north of the border, with The Times reporting yesterday that the Women's Super League have held talks with Celtic and Rangers about moving south to play in the English top flight. The FA handed over responsibility for running the WSL to a new company this season, Women's Professional Leagues Limited (WPLL), whose chief executive Nikki Doucet has held initial talks with both Old Firm clubs.

The women's professional game remains in its infancy in Scotland, with the Women's Premier League only formed in 2022, and Doucet has been tasked with exploring whether huge brands such as Celtic and Rangers would add value to the WSL. As with the Welsh League Cup proposal UEFA have no objection, but the same cannot be said for the authorities in Scotland.

Under the terms of the Scottish league constitution clubs have to give two years' notice in order to leave, while the Scottish FA have the power to block such a move entirely, and are likely to do so if the clubs ever made a formal request. The possibility of the Old Firm clubs moving south has been a popular talking point in English football for decades, but has never come particularly close to happening and is now further away than ever due to the financial strength of the Premier League. In 2009 the Premier League clubs rejected a proposal put forward by former Bolton Wanderers chairman Phil Gartside for Celtic and Rangers to join by 14 votes to six, and the idea has not been seriously discussed since.

Estudiantes splashing the cash

Foster Gillett’s attempts to somewhat upend the Argentine club model continue, and the American is funding the biggest transfer spend in the country since the 1930s, when River Plate were huge spenders and earned them the nickname they keep to this day, Los Millionarios.

Gillett already irked Boca Juniors by paying the clause to sign Cristian Medina, as we covered last week. 

And the issue was that Gillett himself paid it, breaking league rules, rather than the money coming from the club.

Medina’s deal will go through once those details are ironed out, but Estudiantes are continuing to stoke the flames with club president Juan Seba Veron saying at Medina’s introductory press conference: “welcome to the revolution.”

Estudiantes have pursued a number of other high-profile (and high-cost) arrivals this month, securing former Argentina striker Lucas Alario but losing out to River Plate in the chase for Sebastian Driussi, who returns home from Major League Soccer. Other big additions being pursued include Alan Velasco, another former star of the domestic league now plying his trade in the US.

But Pablo Toviggino the treasurer of the Argentine Football Association (AFA) has claimed Veron is simply racking up debt for the club and that members - who haven’t yet voted on Gillett’s investment - need to know the reality of the American’s arrival.

“It’d be good if you explained to club members […] that the only thing you’re doing is acquiring a monstrous debt that can only be guaranteed with Estudiantes’ assets,” Toviggino wrote to Verón on X. 

“You’re not transforming Argentine football’s management models or inventing anything, Foster Gillett isn’t a commercial partner, a sporting director or a virtuous benefactor, as you want to paint him.

“He’s simply a money lender who won’t be able to acquire the club because Argentine law forbids it.”

Dig deeper: The state vs football - a battle for the soul of the Argentine game