FootBiz newsletter #91: D-Day for Lyon, Barca's latest issues and will PL close swap deal loophole?

Today is the day, then, for John Textor, Lyon, Crystal Palace and a whole host of others who have found themselves in the Eagle Football blast radius.

Unless it isn’t, of course.

Should Lyon’s investors and new management have pulled together the eye-watering sums of money they need (in cold, hard cash not bombastic American promises) and the DNCG overturns their relegation then the ordeal continues for Palace, who must wait for UEFA to make their own call.

There is a lot more detail on the latest in the wild world of Eagle Football further down but for now we are talking about more what it means for the bigger picture.

It is impossible to know whether Ares and Eagle’s other investors will decide to throw good money after bad and plug the gaping hole in Lyon’s finances, but it feels like there are enough rich/important people who want Lyon to survive that they will somehow manage it. That’s a very soft prediction.

The bigger questions, as ever, concern how Lyon were allowed to get to this point. With a lot of travel for work this week, we tried to get ahead of things with the newsletter by starting writing some bits on Sunday and Monday but with the Lyon story it was impossible as things seemed to advance nearly every day. From the hearing being brought forward to new revelations about OL’s money being used to bankroll Botafogo, there has been a lot.

A body like the DNCG has a hard job but most important jobs are difficult. That of England’s new independent regulator will be the same, and with that whole process virtually rubber stamped now we can look forward to increased oversight of the Premier League and EFL. Many clubs we have spoken to don’t feel the same, and fear they will be shackled by the pen-pushers under David Kogan. Fans of the clubs that have gone bankrupt — or nearly so — under irresponsible owners feel the shackles have a purpose.

At the same time as all this is happening, UEFA have some big calls to make on regulation just as the Premier League does on whether it will close the glaringly obvious loopholes in its rulebook.

It is football’s delicate balance right now: regulation vs restriction.

Quite often, what one person views as the former is perceived elsewhere as the latter.

What football tries to never acknowledge is that there are too many people still involved in the sport who need the latter more than the former.

Read all about it…

Table of Contents

• Football Governance Bill set to become UK law

• A CBA for football?

• Eagle Football update

• Chelsea’s CWC windfall

• Could PL act on swap deals?

• M&A Murmurs

• Cellino kills off Brescia

• Toulouse hire Cloarec as president

• Nou delays?

• Rayo sweating UEFA inspectors

• Media corner

• Arsenal hire new technical director

Football Governance Bill set to become UK law

British MPs have voted in favour of the Football Governance Bill, which will establish an independent regulator to oversee professional men’s football in England.

In the end, the bill passed by 415 votes to 98 and will become law after a brief return to the Lord’s and other formalities that will complete its 15-month journey through parliament.

The regulator, to be led by David Kogan, will have powers to oversee a broad range of issues affecting the top five divisions of men’s football but at its core the regulator is a response to the impasse between the Premier League and EFL in their negotiation over ‘the new deal for football’ and concern over increasing levels of financial mismanagement at clubs. Protecting clubs as community assets is a key part of the bill and was cited by culture secretary Lisa Nandy before MPs headed in to vote.

"We are doing this for you [fans] because for too long, you have been treated as an afterthought at best or a nuisance at worst in a game that is only great because of you.

"This is for Macclesfield, for Wigan, for Bury, for Bolton, for Derby, for Reading, for Sheffield Wednesday, for Morecambe and for many, many more who have had to endure the misery of being put last when they should have been put first."

How long the regulator lasts is another question entirely.

Shadow sports minister Louie French promised that "a future Conservative government will trigger a review of Labour's regulator as soon as possible".

After initially introducing the bill while in government, the Tories have been somewhat leant on by wealthy donors and connections in football and have performed a U-turn. Tory peers attempted to delay and amend the bill in the House of Lord’s but ultimately couldn’t prevent it becoming law.

Meanwhile, a proposal from Liberal Democrats to make the League Cup final and all of the EFL Playoff finals (Championship, League One, League Two) free to air has failed to gain the support of MPs.

The deal would also have mandated that 10+ Premier League games would become free-to-air every season.

Research done by the Lib Dems had shown that it would cost fans £660 to watch Premier League games live next season, an amount that has risen every year and is blamed for driving fans towards privacy or simply away from football entirely.

Premier League viewing figures declined by 10% on Sky Sports last season and even further on TNT (17%).

The Lib Dem proposal would have seen the aforementioned fixtures added to the British list of ‘crown jewels’, which are sports events enshrined in law that must be broadcast on free-to-air television.

That list currently includes: the Olympic Games (summer and winter), Paralympics, World Cup, European Championships, Women’s World Cup, Epsom Derby and the Grand National, as well as the finals of the FA Cup, Wimbledon (men’s and women’s singles), rugby league’s Challenge Cup and the Rugby Union World Cup.

How the proposal would have affected Sky’s bumper television deal that effectively bankrolls English football is unclear, but the broadcaster would not have taken it lightly.

A CBA for football?

We were interested to read FIFPro’s head honcho Alex Phillips suggest in a (very worthwhile) interview with the FT that football could, ultimately, be heading for a collective bargaining agreement — as seen in the US major leagues — to address concerns over player welfare and scheduling.

What a tremendous idea, and one Rob wrote about for FootBiz back in March as a way to resolve football’s endless legal disputes.

If it’s solving several of football’s biggest issues out of the gate then it would have our support.

Highlights from the interview include:

• Phillips saying UEFA and FIFA didn’t run football as people who love football

• Phillips explaining the difficulty of creating policy that helps FIFPro’s median member vs an elite player

• Phillips clearly suggesting he prefers the US model of player bargaining, even if it means a salary cap

• Phillips highlighting one of global football’s biggest structural problems, the ‘double hatters’, in saying: “Federations theoretically exist to develop football, but in practice — because they wear so many hats — the competition organiser hat almost always overrides the regulatory or development hat. They end up being driven by commercial and competition interests rather than developmental ones.”

Eagle Football update

Olympique Lyonnais will have their appeal heard against relegation to France’s Ligue 2 today, with news expected soon after, after the club asked for the hearing to be brought forward.

The club needs to find at least €100m in ready cash from its investors to have a chance of remaining in the top flight, according to L’Equipe, whose reporting has been impeccable throughout this saga. That investment will not only serve to potentially save the club but to dilute the shareholding of John Textor, who has stepped away from the club and given up his role atop Eagle Football.

That €100m must not be wishy-washy promises of investment but cold, hard cash in their bank account by this morning, plus solid bank guarantees of an additional €100m for the club to meet its financial obligations for the rest of the campaign. There is a suggestion that Ares would provide that guarantee but with the expectation (read: order) that it is not to be used as Ares force a management reshuffle and slashing of costs.

Because even if they can find the money required — and you assume they think they have, given they’ve had the hearing brought forward — Lyon’s belt will need to be significantly tightened should they be playing in Ligue 1 next year. New club president Michele Kang and general secretary Michael Gerlinger will oversee a new and more austere era of management.

Per a different L’Equipe story, that will mean their €160m annual wage bill being nearly halved and potentially up to €100m in player sales, as well as redundancies for regular staff.

French football’s financial regulator (DNCG) faces a big decision in what to do with Lyon, especially so soon after widespread criticism that their response to Gerard Lopez’s mismanagement of Bordeaux was too slow, resulting in the club’s demotion to the fourth tier. Relegating Lyon, however, would be an earthquake in French football given their size and historical success and the financial blow to the debt-laden club would likely prompt a full-scale meltdown.

Even with the restrictions and oversight they’d be under next season from the DNCG and UEFA’s own equivalent, the CFCB, Lyon’s financial future looks (unsurprisingly) worlds differed if they survive. With Europa League and top-flight revenues, the impending belt-tightening would surely get the club back on track eventually. Relegation to Ligue 2 would have too many knock-on effects to even list and potentially the collapse of the Eagle empire.

One key document we are waiting for is the Botafogo accounts for 2024, which are already overdue.

Explosive French reports claim that Lyon was paying the salaries of 54 players last season, when they only had 30 on staff. There are also questions over who exactly paid for Igor Jesus, Jair and Luiz Henrique, three players who have already been sold on but who would have cost Botafogo €90m to buy.

Did Lyon bankroll Botafogo’s success in Brazil? How much of the club’s transfer inflows have already been factored by lenders? These are just two of the key questions being asked by local media in Lyon, as well as whether fees were inflated for deals between Eagle Football clubs, such as the purchase of Ernest Nuamah from RWDM.

Textor has reversed course on his controversial efforts to rename RWDM as Daring Brussels. The club’s new name will be RWDM Brussels.

Botafogo have hired Davide Ancelotti as their new head coach.

Formerly an assistant under his father, Carlo, at Everton and Real Madrid, Ancelotti had once again joined his father on Brazil’s coaching staff after failing to land a head coaching job in interviews with a number of European teams earlier this summer.

He now takes over at Botafogo as the club looks to defend its Brasileirao title after returning from a last-16 exit at the Club World Cup.

According to Globo in Brazil, Textor dispensed with former coach Renato Paiva after he refused to let the American interfere in team selection.

Chelsea’s CWC windfall

FIFA slashed ticket prices for the first Club World Cup semi-final between Chelsea and Fluminense at MetLife Stadium to just $13.40, down from $473.90 earlier in the week, but for the victors four weeks in the United States has been almost priceless.

 Just a few days after being hit with a €31m fine by UEFA with potentially more to follow — €20m for breaching UEFA’s Football Earnings Rule and €11m for not complying with Squad Cost Control Rules — they have banked between $110m and $120m dollars for reaching the Club World Cup final.

In the giddy aftermath of victory over Fluminense, Chelsea executives in the many VIP suites at MetLife were candid in admitting that they had expected to be knocked out in the quarter-finals, but their surprise group stage defeat to Flamengo and Manchester City’s shock last-16 exit at the hands of Al-Hilal opened up an easier path to the final, which Enzo Maresca’s side have successfully exploited.

As a result they are already counting the cash with the prospect of more to follow. With FIFA’s $1bn prize fund propped up by DAZN and Saudi Arabia’s Surj Sports Investments, Chelsea made between $25m and $35m from the participation prize without kicking a ball, quickly topped up by two lots of $4m for their two group stage wins. 

Reaching the last 16 was worth $7.5m, with further bonuses of $13.1m and $21m secured for getting to the quarter-finals and semi-finals respectively.

The winners of Sunday’s final against Paris Saint Germain or Real Madrid will receive a one-off payment of $40m, but the runners-up prize of $30m is not bad either. Given they have benefitted so handsomely from this new revenue stream, it is unsurprising that Chelsea are approaching their negotiations with UEFA in a positive manner.

Could PL act on swap deals?

A potentially fascinating post-script to UEFA's decision to impose significant fines on Chelsea and Aston Villa for breaking their Football Earnings Rule (FER) awaits in the question of whether the Premier League will attempt to align their financial rules with European football's governing body. The issue is particularly salient ahead of next season when nine English clubs will take part in UEFA competitions, including a record six in the Champions League.

A key part of the €20m and €5m fines levied on Chelsea and Villa last week, with further fines of €40m and €15m suspended, was UEFA's Club Financial Control Body's ruling that profits from player swaps are not permissible for accounting purposes.

Chelsea and Villa traded players last summer, with the London club buying Omari Kellyman for £19m and selling them Ian Maatsen for £38.5m. Following the CFCB ruling, both clubs’ accounting profits from player trading for the 2023/24 season have been significantly reduced. 

Villa and Everton also exchanged Academy players Tim Iroegbunam and Lewis Dobban 12 months ago for notional transfer fees of £9m. In addition, Newcastle bought Odysseas Vlachodimos for £20m from Forest before selling them Elliot Andersson for £35.5m.

The Premier League are planning to introduce UEFA’s Squad Cost Control Rules for the start of the 2026/27 season following a two-year trial. Given that context, they may also be tempted to try to persuade the clubs to align with UEFA's FER by prohibiting player swaps, although as the clubs have already twice refused to outlaw related party asset sales that may prove a hard sell for the Premier League.

The UEFA ruling will also have significant implications for Newcastle and Forest next season, as both have qualified for Europe in the Champions League and UEFA Conference League respectively. Projected profit from the Vlachodimos and Andersson sales is likely to be ruled inadmissible, leaving both clubs at risk of breaching FER and needing to alter their spending accordingly. 

In addition, Chelsea and Villa have both agreed to comply with UEFA spending plans, which will involve player sales and spending cuts, to avoid being given further fines. Chelsea can not register new players in their Champions League squad without further sales.

M&A Murmurs

The American investment group who have brought Gareth Bale on as a figurehead for their bid to buy Cardiff City have had a £40m offer dismissed out of hand by current owner Vincent Tan.

Cardiff sources told BBC Wales that they “have not yet received any proposals that would make them seriously consider selling.”

The Bluebirds have been in near-constant decline since their relegation from the Premier League and spending beyond their means. Tan may not be a popular owner, and he’s enduring some difficulties with his businesses in Malaysia, but he is plugging operating losses of more than £10m a year currently. They have lost money in 9 of the last 10 seasons (the exception being their last Premier League campaign) and the aggregate losses exceed £150m.

Cardiff also owes Tan and associated companies north of £100m in gross debt.

While those loans could be written off (as Tan has done with £23m of loans already) or converted to equity, it means the £40m offer from Bale’s group was never likely to get it done.

Unless they come back with a significantly larger offer, it appears unlikely the fairytale takeover by one of Cardiff’s most famous sons will advance any time soon.

There are whispers that Ipswich Town could be on the market for ~£350m.

It’s an ambitious valuation for a club that surged from League One to the Premier League off back-to-back promotions but has now returned to the Championship.

The Edwards family has increased their stake in MLS franchise the Columbus Crew, buying an extra 10% at an eye-watering valuation of $900m to take their holding to 30%. 

Owner of the NFL’s Cleveland Browns, Jimmy Haslam, still owns the other 70%. 

Alan Pace’s €200m purchase of Espanyol is in its final stages, comprising an initial sum of €180m plus further payments based on performance and some other variables.

How Pace addresses multi-club fears from the outset will be interesting, because while Burnley and Espanyol don’t seem in immediate danger of clashing in European competition, Crystal Palace’s current regulatory nightmare should serve as a warning for clubs to get ahead of potential issues in how they structure things.

The vehicle buying Espanyol will be Velocity Sports Partners.

Cellino kills off Brescia

Brescia have been kicked out of Italy’s third-tier Serie C after filing for bankruptcy.

The Italian Football Federation (FIGC) confirmed last week that the club’s licence had been revoked and they would not be allowed to compete in Serie C in 2025/26 following their relegation from Serie B last season. The statement also outlined unpaid debts to the league, players and coaching staff.

Brescia are planning to reform as a new entity and begin next season in Serie D, a spectacular fall given they were in Serie A was recently as the 2019/20 season.

Former Leeds owner Massimo Cellino had been trying to sell the club when they were docked points and condemned to the drop for financial offences.

Toulouse hire Cloarec as president

Toulouse have hired former Rennes exec Olivier Cloarec as its new president, replacing Damien Comolli who left to join Juventus.

Cloarec was surprisingly sacked by Rennes last autumn but was shortlisted by CAA Stellar, the agency retained to advise Red Bird Capital on the appointment, and beat out Julien Fournier, formerly of Nice, for the role.

The news was first reported by local paper La Depeche.

Toulouse have established themselves as a solid Ligue 1 team once again under Red Bird’s ownership, and have consistently had one of the youngest squads in Europe’s top five leagues. Indeed, coach Carles Martinez Novell comes out as one of the managers who puts most trust in youth according to research by TransferRoom, though much of that is because of circumstance.

While the club remains for sale, Cloarec’s partnership with Red Bird should at least be a little less tense than it was with Comolli. While the former Arsenal and Spurs scout remains a respected figure in European football, he clashed with the American investors and decided to leave when he was overlooked for a key role at AC Milan.

Cloarec’s appointment will likely de-emphasise data in recruiting, relative to Comolli’s reliance on it, though the new arrival has a stellar record of sales from his time at Rennes, including Jeremy Doku, Eduardo Camavinga and Desiré Doué.

Nou delays?

If their financial management has been somewhat optimistic (bordering on delusional) in recent years then increasingly it seems FC Barcelona’s wildly delayed return to the renovated Camp Nou is taking a similar path.

To be clear, Barcelona currently plan on playing in the renovated Camp Nou from the beginning of the new La Liga season.

In fact, they want to play the first game there a week before the league campaign even begins, in the traditional Gamper Trophy pre-season friendly, but that is seeming increasingly unlikely.

Already significantly overdue and suspected of being over-budget, the stadium is now expected to be opened before parts of it are finished. La Liga granted the club’s request for the first three games of the season to be away from home to give them extra leeway in construction, but a number of permits and test events need to occur.

Reading between the lines of local reporting (a mix of Mundo Deportivo and SPORT) you can probably expect the Gamper trophy to be moved elsewhere but Barca VP Elena Fort also conceded in an interview with another local paper, La Vanguardia, that the stadium wouldn’t actually be finished until the summer of 2026.

Increasingly it sounds like Barca could be playing in a bit of a building site during the upcoming season, but one bit they will make extra efforts to complete as soon as possible are the VIP seats.

Part of their financial quandary that means Barca can’t currently register new players (yet again!) is rooted in the decision of an auditor that the €100m the club accepted from Middle Eastern financiers last season can not count towards Barca’s revenues if the luxury boxes in question do not even exist.

The hope is that quickly building them will result in a boost to the club’s finances that will ease pressure on their squad-building, allowing them to register signings new and old.

There’s always a lot of hope with this club, though. Again, optimism bordering on something else.

Rayo sweating UEFA inspectors

UEFA inspectors have been doing the rounds in recent days to check on stadiums due to host European football in the upcoming campaign.

Yesterday they were in the outskirts of Madrid to visit Rayo Vallecano, who are working hard to bring their cosy little home up to UEFA standards so that they can play at home in the Conference League this season.

Rayo qualified for the Conference League playoffs due to their league finish but there are concerns over whether the dimensions of the pitch can meet UEFA standards as well as the security of fans.

Media corner

The German FA (DFL) has bought 6.5% of nascent streamer Dyn in an intriguing move that we may see more of across Europe.

Dyn was founded in 2022 by former DFL CEO Christian Seifert in partnership with media giant Axel Springer.

The move is a strategic coup for Dyn, who originally launched in 2023 as a streaming home for all sports outside of football. Its portfolio of handball, basketball, volleyball, hockey and table tennis has sustained it so far but the investment from the DFL hints at far greater ambitions.

A governing body taking a stake in a streamer has been a logical next step for a while, with European broadcast rights flattening or outright declining as huge, often publicly traded companies increasingly struggle to justify parting with billions for a short, fixed-term deal to broadcast football (when they can leave you with no penalty at the end).

There has been a feeling in the market that longer-term partnerships may be a solution, more akin to the 10-year deals seen in the NFL and NBA, but the equity route also make a lot of sense.

Indeed, in the States the NFL have been in negotiations with ESPN for over a year, with the complex negotiation centred on ESPN acquiring NFL Network (and the entire NFL Media business) and the NFL taking a stake in the Disney-owned broadcaster.

“Global media markets are evolving, as is consumer behaviour” said Steffen Merkel, the DFL’s Managing Director of the Dyn deal.

“Alongside established media partnerships, it is part of the DFL’s strategy and responsibility to explore new marketing opportunities for the Bundesliga and 2. Bundesliga.

“Through our stake in Dyn Media, we now have direct access to a company whose expertise and modern technical solutions—especially in the production and distribution of media products—we strongly believe in.”

While Merkel didn’t outright say that German football is coming to Dyn, it is difficult to see a scenario where this investment doesn’t end up with football on the platform. From that perspective it’s a significant coup for Axel Springer (42.5%) and Seifert (9%) who also welcomed the owner of Lidl, the Schwarz Group, as a significant major shareholder (42.5%) in this round of investment.

Arsenal hire new technical director

Arsenal’s head of recruitment James Ellis is set to be promoted to the role of technical director, according to The Athletic.

Ellis, who joined Arsenal from Fulham as a scout four years ago, has been earmarked for the promotion by the club's new sporting director Andrea Berta. Ellis will take on the role vacated by Jason Ayto, who left Arsenal suddenly at the end of the season after being overlooked for the sporting director job.