FootBiz newsletter #56: What to expect from today's Premier League meeting

By the time you read this, the CEOs, owners and assorted executive types of the Premier League will be helping themselves to coffee from silver pots and politely poking at the pastries provided for today’s owners meeting.

As is often the case, many of the most consequential issues will have been resolved before they even arrive at the Nobu hotel on Upper Berkeley Street, the question is whether they leak in the morning.

In my experience, UEFA have historically been the market leaders in pre-meeting stitch-ups, often issuing press releases announcing a new policy or the award of a competition final just minutes after an Executive Committee meeting was due to begin.

In the Premier League's case the clubs held a strategy day yesterday to discuss the salient issues, most notably the mooted introduction of new financial rules next season.

Early indications are that discussions over the so-called Squad Cost Ratio (SCR), which is being trialled this season, will not be put to a vote due to ongoing legal problems.

The main issues are the uncertainty caused by Manchester City's challenge to the Associated Party Transaction rules, and the PFA's threat to take legal action against SCR. A number of clubs have expressed the view that there is no point taking a vote in such circumstances.

The Premier League are, however, expected to issue several significant updates to the clubs, including the decision to trial Semi-automated Offside technology in the FA Cup fifth-round next month, as first reported by The Guardian last night. The clubs wanted to introduce SAOT, which was first used at the 2022 World Cup in Qatar, last autumn but Premier League officials were unhappy with its accuracy during testing in stadiums.

Its technology has been refined and its effectiveness supposedly improved, with referees chief Howard Webb and the Premier League’s chief football officer, Tony Scholes, both giving their approval to the trial. If successful it will be rolled out in the Premier League before the end of the season.

Less welcome for some clubs is the Premier League's request to expand its investigatory powers, including the right to access club premises and seize property including laptops and phones. The Premier League has asked for the right to enter buildings in the event that a club is found not to have complied with an investigation.

Under the existing rules, clubs are expected to give “full, complete and prompt assistance” to any Premier League inquiry, but should this fail to happen the league must resort to fines, a tribunal or refer the matter to the FA to resolve the problem.

A number of Manchester City's 130 Financial Fair Play charges relate to a failure to co-operate with Premier League investigators.

Table of Contents

• Bust stop

• Prince says no alcohol at Saudi World Cup

• French league crisis deepens

• The heavy hand of DAZN

• Team rendered ir-relevent

• More questions for INEOS

• M&A Murmurs

• Southgate’s new book

• Ares chase Eagle Football loan

Bust stop

This newsletter was already written and put to bed last night when a story popped up that we couldn’t let slide.

“Sir Jim Ratcliffe believes his ­decision to cut about 200 more jobs at ­Manchester United is necessary to help the club avoid going bust, the Guardian understands.”

Now, on one hand, if the owner of ~25% of a business that has lost £300m over the past few years told you it could go under then you’d probably nod your head and say “no shit”.

Only, this is Manchester United and the probability of that happening is < 1% and I think even that is generous.

More on cheapskate Jim further down.

Prince says no alcohol at Saudi World Cup

In a story which will almost certainly run for nearly a decade, Saudi Arabia’s ambassador to the United Kingdom has said that alcohol will not be permitted at the 2034 World Cup.

Prince Khalid bin Bandar Al Saud said in an interview with radio station LBC that the gulf state does not and will not allow alcohol.

“At the moment, we don’t allow alcohol. Plenty of fun can be had without it—it’s not 100% necessary. If you want to drink after you leave, you’re welcome to, but currently, we don’t have alcohol.”

When asked if fans would be able to consume alcohol in hotel bars, as was the case at the 2022 World Cup in Qatar, he responded: “No, there is no alcohol at all. Rather like our weather, it’s a dry country.”

He emphasized that Saudi Arabia would accommodate visitors within its cultural framework but would not alter its traditions to meet external expectations, though observers still expect FIFA to push the tournament’s organisers on some loopholes or exclusion zones.

The availability of alcohol was also a contentious issue ahead of the 2022 World Cup in Qatar, another Muslim country where alcohol sales are tightly regulated. Initially, beer was set to be sold in stadiums, but the decision was controversially reversed just two days before the tournament began, providing a major headache for FIFA amid Budweiser’s huge tournament sponsorship. Fans were able to purchase alcohol in designated fan zones and hotel bars.

Saudi Arabia also faces scrutiny over its human rights record. Same-sex relationships are illegal in the country, and women do not enjoy the same rights as men. However, Prince Khalid stated: “We will welcome everyone in Saudi. It is not just a Saudi event, it is a world event, and to a large extent, we will welcome everyone who wants to come.”

Saudi Arabia has, of course, been accused of "sportswashing"—using its heavy investment in global sports to improve its image despite ongoing concerns about human rights and environmental policies. Amnesty International is just one organisation to have warned that hosting the World Cup there could lead to serious and widespread human rights violations.

French league crisis deepens

If you need bringing up to speed on the DAZN-Ligue 1 issues (which really stem from something much deeper) then check this out from a couple of weeks back.

If you know the rough story or can’t be bothered to click away, then just know that DAZN are pretty disappointed with the amount of viewers who have signed up to watch Ligue 1 in France after they won the broadcast rights in a €450m deal this summer.

The reason that was such an issue for French clubs is that the €450m number already represented an almost halving of the amount teams were expecting after LFP president Vincent Labrune had promised teams a total of €1bn.

So the Ligue 1 clubs were already hurting financially after the league botched the broadcast rights deal, being left millions worse off than they had budgeted.

Add to that, DAZN have this month said they will pay only half (€35m) of what they were expected to pay (€70m) to the league for distribution to clubs because it is unhappy with the deal.

Panic stations?

Well, per L’Equipe, the clubs held an emergency meeting on Tuesday night fearing the deal is on the brink of collapse.

For their part, DAZN are apparently angry over the league’s inaction on piracy which it deems to be damaging their business. DAZN had expected to attract at least 1.5m subscribers and reportedly has an exit clause should they not reach that number. After more than half a season, DAZN reportedly has around 500k subscribers and the growth has slowed to a trickle. They blame this on fans watching illegal streams and clubs not participating actively in their leaguewide partnership.

LFP, the governing body of the French league, is taking DAZN to court over the unpaid money and had an emergency meeting of their own last night (Wednesday). The sum is due tomorrow (Friday).

Both sides have an exit clause in December of this year which seems increasingly likely to get triggered.

Then what? Well, we might be about to see the first major football league launching their own DTC broadcast product.

The heavy hand of DAZN

Industry observers are intrigued by some of DAZN’s recent moves, with the streamer making heavy annual losses but still spending big on acquisitions not just of broadcast rights but also other streamers, such as Australia’s FOXTEL.

One thing that has been clear in rights ‘auctions’ over the past 12 months is that there aren’t so many bidders, and they’re certainly not as aggressive as in years gone by.

Could DAZN use their strong hand to renegotiate some existing deals that they might have overpaid for? Don’t be surprised.

And they might not be the only ones. We are about to see a couple of years of realignment in the push-pull relationship between leagues and broadcasters, and it will become clear who has leverage and who doesn’t.

Team rendered ir-relevent

The prospect of Champions League matches being played in the United States appears to have increased after UEFA this week appointed New York-based Relevent Sports Group to sell their media and commercial rights for six years from 2027.

Relevent will replace UEFA's long-standing media sales partners, Swiss company Team Marketing, following a tender process run by UC3, the join venture between UEFA and the European Clubs Association which runs European club competitions. Team designed the Champions League logo and have sold the competition worldwide since the European Cup was relaunched in 1992, but after losing UEFA's rights North American rights to Relevent five years ago they have now been usurped globally.

Relevent helped UEFA secure a record $1.5billion Champions League TV deal for North America  for CBS, and both parties have made no secret of their desire to bring competitive matches to the United States. 

The company, founded by Miami Dolphins owner Stephen Ross, sprang to prominence by bringing big European clubs to the USA for pre-season friendlies over the last two decades. The International Champions Cup regularly attracted the likes of Real Madrid, Manchester United and AC Milan, while since 2023 they have worked with the Premier League on running its official pre-season Summer Series.

As partners with La Liga in the joint venture LaLiga North America, Relevent were also behind an attempt to stage two La Liga matches in north America in 2019, a plan blocked by the United States Soccer Federation with the support of FIFA. After starting legal action against FIFA Relevent dropped the claim last year following the governing body’s decision to set up a working group into whether leagues and confederations should be able to take competitive matches outside their territories.

With Relevent now working closely with both UEFA and FIFA it is likely to be only a matter of time before they are successful.

What happens to Team, who appear to only serve UEFA as an agency, is less clear.

More questions for INEOS

Executives in football appear to be enjoying the implosion of much of INEOS' sporting empire, with New Zealand rugby this week launching a $22 million legal action following the company's unilateral withdrawal from a multi-year sponsorship agreement on top of last month's acrimonious split with Sir Ben Ainslie.

A commercial director at a Premier League club contacted FootBiz assuring that Sir Jim Ratcliffe's position that meeting contractual obligations to commercial partners is a voluntary matter - where agreements are subject to change depending on the impact of "deindustrialisation" on one partner or the other - will have been noted by Manchester United's army of sponsors.

United brought in over £300m in commercial revenue during the 2023/24 financial year, but if even a tiny number of their sponsors decided that “cost-saving measures” meant they couldn’t fulfil their obligations, as INEOS did with the All Blacks, then the club's well-publicised profitability and sustainability problems would be far worse.

With United languishing in 13th, you’d think that isn’t the sort of move Ratcliffe would want people seeing in the market. 

In almost certainly related news, two leading credit ratings agencies raised red flags over INEOS Group shortly before news broke that Ratcliffe planned to make another 200 redundancies at Manchester United.

Fitch Ratings and Moody’s, who provide financial health checks for many of the world’s biggest companies, said Ratcliffe’s chemicals business had seen their debt balloon to an amount five to six times larger than the company’s annual revenue.

Fitch described “uncertainty” over INEOS’ plan to repay related-party loans of £800m to other parts of the group, meaning that the company could remain burdened by significant debts until at least 2027.

Both credit agencies officially downgraded their outlooks for the company to “negative”, which will make it more difficult to borrow from the banks on friendly terms.

For more on INEOS’ issues, Manchester United and Sir Dave Brailsford’s ‘Mission 21’ make sure you’re signed up as a premium subscriber so that you receive Rob Draper’s latest piece in your inbox tomorrow morning.

Not to be missed!

M&A Murmurs

Tottenham fans hoping for a new regime if the club accepts outside investment could be left severely disappointed, after The Guardian reported that Daniel Levy would be offered the chance to stay on as executive chairman.

A Qatari group that has been circling for a while would like to take out ENIC as the club’s biggest shareholder and secure a majority stake, though neither they or any other party has thus far been willing to meet Spurs’ £3.75bn valuation. They have, however, been analysing the option of retaining Levy on a management contract. It is unclear whether he would retain his equity in the club.

While Levy has built a successful business at Tottenham, lifting revenues north of £500m after building a state-of-the-art new stadium on the existing site at White Hart Lane, fans spent much of Sunday’s FA Cup defeat to Aston Villa calling for Levy to resign.

Portugal is becoming a popular place for multi-club operators to invest, with Bill Foley recently adding Moreirense to his stable of teams that includes Bournemouth, Lorient, Auckland FC and a minority stake in Scotland’s Hibernian.

A swirl of other investment prospectuses are doing the rounds from groups who are keen to add a Portuguese outpost to their collection.

While the top flight is dominated by the three big beasts; Benfica, FC Porto and Sporting CP, there is scope for a well-run team to challenge the fourth-richest club, Braga, for a European spot.

Smaller, well-run clubs like Santa Clara and Casa Pia are currently hot on Braga’s heels in the race for fourth place but fifth is likely to grant access to the Europa Conference should one of the big three win the cup.

Portugal also has a shot of overtaking the Eredivisie and earning more places in UEFA competition, meaning the league’s middle class can aspire to those juicy continental revenues.

For Americans looking to retire in Europe, Portugal also offers the chance to earn EU citizenship fairly quickly.

Southgate’s new book

As seemed inevitable from the moment he stoically and sartorially stole the nation’s hearts (only to come up short like everyone else before him) Gareth Southgate is writing a book on “leadership”.

The Daily Mail’s Mike Keegan reports the former England boss is set to release a book called “Dear England: Lessons in Leadership” after turning down offers to write an autobiography or memoir.

If Southgate doesn’t fancy a return to full-time football management in the coaching sense, he could have an interesting career path as someone more in the executive/high-performance layer of club (or multi-club group) management.

In my mind it would be a role somewhere between a Dave Brailsford, an Andrew Strauss, a Dan Ashworth and probably a little bit of Jake Humphrey.

Ares chase Eagle Football loan

John Textor's Eagle Football Holdings are under pressure from their main lenders, Ares Management, over the repayment terms of a $500million loan. Bloomberg reported last October that Eagle were seeking to borrow around $300m to help repay part of the Ares loan as part of a broader recapitalization plan, with the Toronto-Dominion Bank engaged to gauge interest from other lenders. 

Tensions in the relationship have not eased over the intervening four months according to multiple sources with knowledge of the agreement, with Ares understood to be pushing Eagle for clarity over whether a proposed £230m investment in the company from Sportsbank will take place.

An exclusivity agreement between Eagle and Sportsbank, a group of investors from the UAE, North America, Canada and Europe, was announced last month with sources involved in the deal telling Footbiz that the outcome of due diligence being conducted by both parties is expected by the end of February. One industry source remains sceptical, citing Textor’s rush to use the potential investment as a bargaining chip with the French regulator in order to reverse Lyon’s provisional relegation.

Ares have also loaned $500m to Chelsea, and the private equity firm extended their relationship with one of the club's owners, Todd Boehly, this week by agreeing to his purchase of 49 per cent of the Trent Rockets cricket franchise. Boehly's company Cain International bid £40m for the Nottingham-based Trent Rockets in the Hundred auction, with Ares providing at least some of the funding.