FootBiz newsletter #55: legal battles for the Premier League and Real Madrid go on the warpath

If we’ve learned one thing over the last couple of years, it is that attempting to regulate modern football is bloody difficult.

Take PSR, the widely reviled Profitability and Sustainability Rules that are on the way out after a reign of terror in the Premier League.

This week, the Premier League owners meet and will discuss the regulations being brought in to replace PSR. But changing the rules of an existing competition isn’t easy - just look at what is happening in Liga MX right now. The calculations will always show that it benefits some clubs more than others, it’s just how much you can convince everyone that the benefits are long-term and broad-reaching.

As we saw with PSR, as much of an issue as enforcing the rules amid all the loopholes were unintended consequences of the rules and how they had been written. I don’t think it’s too melodramatic (though it is a little) to say that in their quest for sustainability (a good thing) the PSR rules somehow managed to bastardise the very core of how clubs should seek to operate.

For many, the root and essence of supporting their club is the community thread that runs through it. Nothing exemplifies that more than a young fan being scouted locally by the academy of the club they love, developing through the system, breaking into the first team and becoming a beloved star. It is the dream. Not only is that the greatest story a kid can hope for, or a fan can hope for, it’s also the greatest story a club can hope for; it deepens their roots in the community, it is a marketer’s dream, it helps attract local talent to your academy and, if you’re a Premier League club, then you’ve just produced a player for nothing (assuming the academy is something of a sunk cost for clubs these days) and may attract many more. When the average Premier League starter costs £15-20m, that is no small achievement.

That PSR so needlessly ended that particular dream for so many academy players by transforming them into prime meat that must be sold will always leave a bad taste.

What could Lewis Hall, the best English left-back in the league this season, have become for Chelsea if he had stayed? Elliott Anderson grew up an obsessive Newcastle fan, born and bred in the area, and his grandfather played for the club. When Newcastle needed sales to comply with the rules, Anderson was shipped out as part of a raft of back-and-forth loophole deals with Nottingham Forest that saw them buy a third-choice goalkeeper for £20m amid both clubs overspending on expensive foreign talent.

Nobody wanted this to happen, but it did.

And so when the Premier League owners settle on exactly which formula of regulation they want to introduce, they have to try and game out the second and third order consequences of their actions.

As ever, there are no perfect solutions.

Anchoring, as discussed below, seems good for everyone except the players. With flattening and even declining broadcast revenues, there is a school of thought that players are going to have to get used to salaries not constantly increasing - and even pulling back a little.

That won’t stop players unions fighting any rule change that they perceive to be limiting the earning potential of their members though.

Wolves last week confirmed to Companies House that they have extended their financial year by a month, which will give them an extra few weeks after the season is over to sell players and ensure they are compliant with financial rules. Leicester infamously used this method to defeat the Premier League on a PSR charge.

If the rulebook had been better written, there would be no need for these sleights of hand. There would be no need to flog talented youngsters who love the club while retaining bloated overseas signings to warm the bench.

Next time around, let’s hope the PL has learnt its lesson.

Massive newsletter today - over 3,000 words and 12 stories. Thanks for reading, and share us with anyone who’d gain something from reading us every week.

Table of Contents

• PFA makes anchoring threat

• For premium subscribers

• UEFA could scrap extra time

• City take on the PL… again

• Real Madrid take on Spanish authorities… again

• For Fox sake

• PL clubs to halve transfer window?

• FIFA recognises NDRCs

• No Eus complaining

• Foreign refs for big games?

PFA makes anchoring threat

The Professional Footballers’ Association (PFA) has preemptively threatened the Premier League with legal action if they move ahead with ‘anchoring’ rules that the PFA considers a hard salary cap.

A letter sent by the PFA last week was done so in anticipation of this week’s Premier League meeting, with union chiefs fearing a vote was imminent to introduce the proposal on squad cost anchoring.

Premier League clubs already voted in favour of bringing in a new regime of Squad Cost Rules (SCR) to replace the unpopular Profit and Sustainability Rules (PSR). SCR would limit a club to spending no more than 85% of their total revenue on salaries for first-team players and coaching staff, as well as amortised transfer fees and agent fees. Clubs have been running these rules ‘in shadow’ all season to get used to the calculations involved and identify any loopholes.

UEFA already employs the SCR system for clubs competing in its competitions, though with a lower limit of 70%.

However, fearing that SCR could distort the league’s competitive balance, the Premier League is also looking at introducing an anchoring rule that would cap spending to an agreed multiple of the smallest centralised payment received by a Premier League club.

Multiple reports suggest that the league sees a 5x multiple as the right amount, low enough to prevent the richest clubs hoarding all the top players while high enough to ensure that they remain competitive in continental competition.

The smallest centralised payment will almost always go to the club finishing 20th, which was Sheffield United (£110m) last year. If the anchoring cap was 5x that (£550m) then all Premier League clubs would have come under the limit last season, with Manchester City and Chelsea the top spenders.

City, as well as crosstown rivals United, are opposed to the changes, though for different reasons to the PFA.

The PFA are vehemently against any regulation that would bring in a hard cap on how much clubs can pay players regardless of the club’s ability to meet the costs. While these sorts of agreements in American sports are subject to a collective bargaining agreement (CBA) between the league and players’ union, no such mechanism exists in football where the fragmented, international landscape of leagues being in competition with each other makes things difficult.

The closest thing is the Professional Football Negotiating and Consultative Committee (PFNCC), which comprises the PFA, Premier League, English Football League and League Managers’ Association. The Premier League told The Athletic that it has complied with PFNCC requirements regarding the proposed changes, but the PFA appears set to fight any new rules that might limit their constituents’ earning power.

This one could drag on, and is going to leave one group fairly unhappy…

For premium subscribers

Two pieces you may have missed over the weekend:

• Rob Draper dives into Liverpool and asks: are they the best-run superclub? - click here

• Ricardo Fort with 10 better ways to spend your budget than Super Bowl ads - click here

If you’re not yet a supporter of FootBiz, consider plans starting at just £3.99

UEFA could scrap extra time

UEFA are giving serious consideration to scrapping extra time from Champions League knockout rounds, which begin this evening with an unexpectedly titanic last-16 clash between Manchester City and Real Madrid. 

The Guardian first reported last week that internal discussions are taking place at UEFA about going straight to penalties if scores are tied at following the two-legged 90 minute knockout rounds. FootBiz has since established that due to UEFA's TV contracts no change will take place until the 2027/28 season at the earliest.

The impetus to abolish extra-time comes from a combination of global trends, concerns over player welfare and naked politics. UEFA removed extra-time from their pre-season Super Cup competitions two years ago, with the Spanish FA following suit by scrapping the additional 30 minutes from their four-team Super Cup this year, but the EFL are the real trailblazers having taken the then-radical step of going straight to penalties in the Carabao Cup in 2018. 

In yet another sign of the lack of joined-up thinking in football governance however, the FA are sticking with extra-time in the FA Cup, despite calls from lower division clubs that go straight to penalties since they have been denied replays from this season. The small clubs' rationale is that extra time reduces the likelihood of them springing an upset, but the FA are digging in, bolstered by tradition and the rather more pragmatic argument that broadcasters welcome an additional 30 minutes' drama.

Given their competitions all take place during midweek a late-night extra half-hour is less valuable for UEFA, while they are also eyeing the optics of an easy win. Removing extra time in the Champions League would be welcomed by players' unions FIFPRO and the PFA, who are in the process of taking legal action against FIFA over the Club World Cup. The power brokers in Nyon are no strangers to the ancient proverb, "the enemy of my enemy is my friend."

From a less cynical perspective UEFA are also acutely aware that along with FIFA's Club World Cup they have been the biggest instigators of the expanded club match calendar. UEFA have brought in two extra Champions League group games for every club and four this season for City, Real and the 14 other teams playing off over the next fortnight for the right to join Liverpool, Arsenal and the rest in the last 16 proper.

Removing extra time would go some way towards alleviating the problems caused by late-season fixture congestion and in reality, may not be much of a sacrifice. Just three Champions League ties went to extra time last season and none at all the previous season, which is surely tempting fate to deliver a 120-minute thriller when City visit the Bernabeu for the second leg next Wednesday.

City take on the PL… again

Manchester City's latest legal challenge to the Premier League has been greeted with weary resignation by most other clubs in the top-flight ahead of a meeting of their senior executives on Thursday.

City had always warned they could take more legal action if the Premier League pressed ahead with plans to amend their Associated Party Transaction rules, which they did last November, but the timing of the challenge seems significant, with a verdict on the club's 115 alleged breaches of Premier League rules expected next month.

One executive at another club described City's latest move as an attempt to increase workload - and costs - of the Premier League's legal team at a a time when they are thought to be busy preparing for a sanctions hearing on the 115 case. City have form for cynical tactics in this regard, with the judgement of the arbitration hearing in the APT case published in September providing an insight into the Premier League's frustration that their opponent's legal team would often delay sending their correspondence until the most anti-social of hours.

Others club sources have speculated that City simply view attack as the best form of defence ahead of the full judgement of the APT arbitration being published, which is expected imminently. 

City's latest legal challenge is in essence an attempt to re-litigate that case, with the club arguing that the APT rules should have been declared void after the initial ruling - as their lawyers tried to claim they had been. The new challenge also claims the amendments "affect the prevention, restriction or distortion of competition, [and] may affect trade in the UK".

Following several years of uncertainty and shifting alliances among the clubs since APTs were first introduced in 2020, there is now a clear and strong majority in the Premier League in favour of them. Around three-quarters of the clubs are clear in their belief that the rules must be upheld, as they fear that that City if are successful any limits on their future sponsorship deals could be lifted, further entrenching their financial advantage.

Real Madrid take on Spanish authorities… again

A refereeing decision went against Real Madrid last weekend, when Espanyol’s Carlos Romero only received a yellow card for a foul on Kylian Mbappe that they felt should have been a red card.

While Madrid has a vice grip on two of Spain’s largest daily sports newspapers, Marca and AS, you probably wouldn’t have heard too much more about that decision had Madrid simply won the game against the relegation battlers.

As soon as they lost, though, all bets were off. Fazers were set to DESTROY and the Bernabeu club lost its collective mind in alleging conspiracy and throwing every toy within reach out of its diamond-encrusted pram.

Pundits on Real Madrid TV, the club’s official television channel, claimed the decision was evidence that Spain’s Technical Committee of Referees (CTA) boss Luis Medina Cantalejo is involved in a conspiracy against their club.

It wasn’t.

Pundits on RMTV called for the sacking of Rafael Louzan, president of the Spanish FA (RFEF) as well as Carlos Clos Gomez, the former referee who now oversees VAR in Spain. The next day, Madrid then lodged a formal complaint to the RFEF asking for the “immediate submission of VAR audio” related to any decisions they didn’t like. They also sent a letter with the request to Louzan and the Spanish government’s sports body which said Spain’s system of referring was “completely discredited” and “rotten from the inside”.

It isn’t.

Real Madrid then pulled out of a planned meeting between owners of all first and second division clubs in Spain to discuss league matters - including refereeing reform - as some sort of protest.

Atletico Madrid, seeing their crosstown rivals’ complaints as a way of pressurising referees ahead of their Madrid derbi this weekend, went on the offensive in calling out Real Madrid’s tactics. Their president spoke in defence of the refereeing bodies at Thursday’s meeting, their coach Diego Simeone took shots at Carlo Ancelotti (the Italian returned them), their players labelled the accusations ‘silly’ while Atletico’s social media accounts took aim at Real Madrid on multiple occasions, including this mock-up of an Ikea instruction manual.

Step in La Liga president Javier Tebas, who has wanted refereeing reform for some time (bringing officiating under La Liga’s umbrella, rather than the RFEF’s) but has also had his fair share of battles with both the RFEF and Real Madrid president Florentino Perez.

“Real Madrid are against everyone — they are hurting the competition,” Tebas said.

“They create a story of victimhood that does not exist. Perez always wants to be right and wants us to get down on our knees in his office.”

Tebas said he will explore legal action against Real Madrid, ensuring that this storyline won’t disappear any time soon.

For Fox sake

Anyone watching the Super Bowl on Sunday night was treated to a brief screen cameo by Gianni Infantino.

With so many actual famous people attending the game, you may wonder why Gianni, an administrator of a sport that most Americans don’t care about, was singled out for special treatment.

Of course, the answer is that the game was broadcast by Fox, who have the rights to a major global sporting jamboree happening on American soil in the summer of 2026 (and only do so after Infantino gifted them to Fox without an bid process as a make-good for moving the 2022 World Cup to clash with the NFL season).

Fox didn’t miss any opportunity to cross-promote all week, with a particularly chaotic segment where Gordon Ramsay cooked up a po’ boy with the ‘help’ of Fox Sports analysts on their Bourbon Street set. Ramsay’s new Fox show is out soon, in case you were wondering!

PL clubs to halve transfer window?

Per The Telegraph, Premier League clubs are considering reducing the January transfer window into a two-week block and returning to an already failed plan to close the summer window before the start of the league season.

Sporting directors of the 20 clubs met last week and raised concerns about disruption to squads and coaching staff while the season is ongoing.

However, the clubs previously voted to bring the summer deadline forward to before the season started in 2018 and 2019 and quickly reverted. The move was considered a disaster by many as it handed clubs abroad leverage over English clubs, who either lost players with no way to replace them or were forced to try and sell unwanted players for the last two weeks of August with the buyer knowing they were surplus to requirements.

Unless you can align with other leagues on this, I predict it’s an idea that goes nowhere.

FIFA recognises NDRCs

FIFA has officially recognised eight National Dispute Resolution Chambers (NDRCs) to assist with complaints over transfers.

The rules governing the status and transfer of players between clubs dictate that disputes should be heard by a national dispute resolution organ rather than immediately being elevated to FIFA or a civil court.

By meeting a number of requirements and being approved as NDRCs, the chambers in England, Belgium, Croatia, France, Ireland, Ukraine, Indonesia and Mexico should help protect players, coaches and clubs with dispute resolution that is sanction by world football’s governing body.

Let the legal nerds never complain again that we ignore them.

No Eus complaining

Eyebrows might have been raised by some fans as John Eustace asked to leave Blackburn Rovers (6th in the Championship and having spent all season in a playoff spot) in order to take over at Derby County, a team sitting in the relegation zone.

But Championship insiders note that Eustace has been offered to almost every Championship club with a vacancy this season, such has been his unhappiness at Ewood Park.

With a much-delayed court case - postponed again recently until March - continuing to hang over Venky’s and their ability to spend money at Blackburn, Rovers’ overperformance thus far this season has been somewhat unexpected after they narrowly avoided the drop last year.

Foreign refs for big games?

The weekly Premier League spats over refereeing decisions and Real Madrid’s ongoing officiating tantrum pale into insignificance alongside events in Turkey last weekend.

The entire Adana Demirspor team walked off the pitch in protest just 30 minutes into their Super Lig match at Galatasaray on Saturday night, due to unhappiness at a penalty that had been awarded the home side, which was converted by nomadic centre-forward Alvaro Morata.

The match was abandoned and the club's chairman Bedirhan Durak resigned on Monday.

Fenerbahce coach Jose Mourinho has strongly criticised refereeing in Turkey all season, claiming there is a "toxic" environment which favours Galatasaray, but even the Portuguese polemicist has stopped short of taking his team off the field.

Following last weekend's incident, Fenerbahce vice-president Acun Ilıcalı called for a foreign referee to be appointed to take charge of their derby at Galatasaray on 23 February.

David Coote is available.