FootBiz newsletter #95: The Championship resumes with Sheffield Wednesday on the brink

The 21st of July was a big day for King Charles.

He probably woke up (well, he definitely woke up) then probably had one of his servants bring him muesli and whatever other nutritious dust it is that old people have for breakfast before settling down to give royal assent to some parliamentary bills.

For those not from the UK, or those who are but similarly have never studied politics at any level, royal assent is apparently the final stage of making a proposed law (bill) into an act (law).

And so King Charles probably got out his big signing pen, which one might have imagined looks something akin to those old feather quills you saw in period dramas but actually is just a leaky fountain pen that forces his majesty into tantrums at inopportune moments. Or, in his words, “every stinking time”.

So Charles gets his leaky pen out (presumably now fixed) and he looks at the paperwork in front of him.

First up is the Supply and Appropriation (Main Estimates) Act. Yep, fine, sounds boring. Not wasting much ink on this one.

Next is the Product Regulation and Metrology Act, another dull one, barely a squiggle.

And then there’s the Norwich Livestock Market Act, which sounds oddly specific but he’ll allow it, because there’s only one more after this and then he can go back to doing what monarchs do — being paid to exist.

Suddenly, it all changes.

‘The Football Governance Act’ stares up at the king, beaming brightly. His face illuminates with the power of 1,000 solved problems and a smile breaks out across his face. I’d say ear to ear but we can’t confirm it was quite that broad.

And as the king flicks through the bill (soon-to-be act) a tear fills his eye. For this bill (act?) is a turning point in English football.

Which it may well be, but the crash back to reality is that today — right now — we have two EFL clubs in dire straits and the powers of the Independent Regulator can’t come soon enough.

As long-term readers will probably have gleaned by now, I believe very strongly in running football clubs sustainably. The English system, where most clubs lose millions of pounds per year, makes no sense and needs fixing before something dreadful happens.

As it turns out, the Independent Regulator was proposed off the back of a review of the national game, fresh off Bury’s expulsion from the EFL and financial difficulties at other lower league clubs. Which is to say… the dreadful things are already happening. They’ve happened, are happening and will continue to happen unless something is done at a higher level.

This week we have Morecambe FC fighting for its life (deeper reading here) and Sheffield Wednesday in the sort of financial dire straits that literally everybody saw coming with Dejphon Chanisiri.

I get that the main reason I am a fundamentalist on this issue is because the football club that I support nearly went out of business twice before I was old enough to vote. Again, we were a non-Premier League club that was allowed to spend wildly beyond its means and nearly disappeared as a result.

I understand the critics of excessive regulation, but when it comes to financial rules I am optimising for zero clubs going out of business rather than Aston Villa’s right to lose £100m per season chasing the Champions League.

So we’ve got Morecambe and Sheffield Wednesday today but there’s also a smattering of other news just in time for the season to get going. Or perhaps not, if Wednesday’s players carry out their strike threat.

Table of Contents

• Palace go to CAS

• Eagle Football fun and games

• Wednesday threat

• Morec concern

• No second Luc

• NFL takes 10% stake in ESPN

• Garber bites back over Apple

• Barca update

• CAS legal development

• Madrid medical reboot 

• Easter Egg

FIFA sued for billions

FIFA are facing a ten-figure (that’s billions) claim for compensation from a group of current and former players after a ruling last year by the European Court of Justice (ECJ) that its transfer rules are unlawful. The Justice for Players foundation served notice of its intention on Monday to file a class action against FIFA and the football associations of France, Germany, the Netherlands, Belgium and Denmark.

Justice for Players is seeking compensation on behalf of players who have lost income because of FIFA’s transfer rules since 2002 and claim the case could potentially involve around 100,000 players.

The compensation claim is the result of the ECJ judgment last October in the case brought by Lassana Diarra, who sued FIFA after it refused to issue him with an international transfer certificate (ITC) to join Charleroi in 2016 after he was found to have breached his contract with Lokomotiv Moscow two years earlier.

The ECJ said some of FIFA's rules on player transfers went against European Union law and freedom of movement principles, which led to the world governing body adopting an "interim framework" on transfer rules while it looked at the legal implications of the ruling.

The new legal action could lead to law changes allowing players to terminate their contracts without paying huge compensation in the biggest change to the transfer system since the Bosman ruling established the principle of free movement for out-of-contract players in 1995. Bosman and Diarra’s lawyer, Jean-Louis Dupont, is advising Justice for Players on their claim.

Palace go to CAS

I can’t write any more about Crystal Palace/UEFA/Nottingham Forest/Lyon/CAS because what is left of my brain will probably fall out, but it’s worth just noting that the Eagles’ hearing at the Court of Arbitration for Sport is on Friday.

If they’re unsuccessful, they’ll play Fredrikstad (Nor) or FC Midtjylland (Den) in the Conference League play-off round.

Reports from the Daily Mail and Sky Sports on Tuesday suggest the Eagles think they have a secret weapon: “Palace have legal documents, seen by Sky Sports News, which advise clubs the real deadline is not March 1, but April 30.”

Given UEFA’s written reasons explicitly state they were demoted for not having remedied their multi-club situation by March 1, presumably the plan is to expose how shoddily written the UEFA rules are, in-keeping with many recent challenges to governing bodies (Leicester vs PL being just one).

Another defence could be, given Palace are no longer even involved with John Textor, that the punishment is disproportionate.

But whatever. Let’s just wait and see. Verdict on or by August 11.

Eagle Football fun and games

Eagle Football is dead. Long live Eagle Football 2.0?

There are plenty of different ways to read John Textor trying to separate Botafogo from Eagle Football.

One is that Eagle’s investors are sick of the sight of him, having nearly tanked the entire thing, and that they want Lyon’s money to be spent on Lyon’s players rather than funding a title challenge in Brazil. Another is that Textor is walking away wounded but not disheartened, and wants to focus on the one club where he’s had success. A third is that it is the prelude to creating another MCO, as has been reported by MCO Insights, with Evangelos Marinakis.

It doesn’t take a professional dot-joiner to join the dots between Marinakis’ evil empire (Palace hat on) and Eagle Football’s future plans, but the Nottingham Forest owner has long been eyeing Brazil as a market, hiring Edu Gaspar from Arsenal to oversee this expansion, and the increasing volume of deals between Textor clubs and Marinakis clubs does have the feel of something of a prelude to a greater alliance.

Part of the reason we know there is a major shift amid the ashes of Eagle Football is because of all the reporting coming out of Brazil.

Globo reported that Botafogo’s board approved a €100m loan, collateralising the club’s assets, as part of a plan to move the Brazilian champions into a Cayman Islands-based vehicle. Meanwhile, L’Equipe is telling us that Botafogo are demanding €65m from Lyon. Their claim is that Botafogo players were sold to Lyon at below market value to help the French club’s cash position.

So effectively their legal claim is that they followed the exact plan Textor had for the clubs? That he’s been very vocal about?

"After the DNCG's decision of November 15, 2024, which prohibited Lyon from registering players, Botafogo was forced to negotiate with third parties certain players who could be transferred to Lyon, such as Luiz Henrique, Igor Jesus and Jair, under unfavorable conditions” claim Botafogo.

Which sounds likely to be true, but they have benefitted greatly from being part of a multi-club group. You can’t have it both ways… or can you?

Wednesday threat

Sheffield Wednesday’s players have agreed to fulfil their opening Championship game of the season against Leicester on Sunday despite many of them still waiting to receive last month’s wages.

Henrik Pedersen’s first-team squad refused to take part in a scheduled friendly at Burnley last Saturday in protest at being paid late in March, May and June, with some of them still waiting for last month’s wages, but FootBiz has been told they are prepared to start the season despite ongoing uncertainty over the club’s financial position.

Wednesday’s players returned to training this week having made their point, and are preparing to face Leicester. Owner Dejphon Chansiri is trying to sell the club, but is refusing to drop his asking price below £100m, despite interested parties valuing it at closer to £30m.

Morec concern

Morecambe have suspended all their football operations and are facing expulsion from the National League after being denied permission to begin their campaign this weekend. The club’s opening three league fixtures have been postponed as the players have not been paid salaries for June and July, with owner Jason Whittingham refusing to sell despite the financial problems.

Morecambe’s few remaining first-team players were sent home from the club last week as they are unable to train, as their insurance policy has lapsed. The National League have given Morecambe a deadline of 20 August to commit to paying staff and fulfilling their fixture list this season, without which they will face liquidation after 105 years.

Morecambe would become the third club in the north west to go bust in the last six years after Bury in 2019 and Macclesfield 12 months later.

From 2020-2023 Morecambe were a League One club but dropped to the fourth tier amid financial difficulties and dropped out of the EFL a year later.

No second Luc

Lucas Paqueta and West Ham are unlikely to take legal action against the FA after he was cleared of four counts of spot-fixing by an independent commission last week.

The Brazilian midfield player’s legal team will wait for publication of the tribunals full written judgement before making a final decision, but sources involved in the case have indicated to FootBiz that a compensation claim is unlikely.

Paqueta has always protested his innocence since the FA’s investigation began two years ago, but it is accepted that the amount of circumstantial evidence regarding suspicious betting patterns surrounding the four Premier League bookings he received in 2022 and 2023 was enough to suggest that the FA had the right to build a case against him. The fact that the 27-year-old was found guilty on two counts of failing to co-operate with the FA’s investigation would also hinder a legal claim.

West Ham are also unlikely to pursue a legal claim despite losing out on an £85m transfer fee for Paqueta from Manchester City which had been agreed in August 2023, but will lobby the commission to make the FA pay their £1m costs.

NFL takes 10% stake in ESPN

We expect Disney to announce today that the NFL’s huge deal with ESPN is done. It could be a model that the Premier League and other major European leagues look to imitate.

It has admittedly taken several years to get to this stage, but crucially the agreement (which was first reported by Andrew Marchand) has been reached in time for the American football season and the launch of ESPN’s new flagship streaming service — bypassing cable and satellite TV for the first time.

The terms of the deal are obviously not official yet, but Marchand and others have long reported that the sale of NFL’s Media arm to Disney will see global sport’s biggest league (in revenue terms) taking a stake in ESPN. That is one point that will need to be clarified; is the stake in ESPN or in Disney itself? Of course that then begets other questions, like will the president of the United States decide to hold up the deal until he receives something in return? These are the times we live in now.

NFL Media is an organisation within the NFL that houses several assets that the league has been looking to offload for a couple of years as costs have spiralled. NFL Network, a rolling news channel originally conceived as a rival to ESPN, is one such asset as well as the hugely popular NFL Redzone (the greatest sports television product on earth) and the exclusive rights to a handful of NFL games per year, mainly those played abroad. Despite being a significant content partner to the league, filling much of their airtime with NFL discussion, ESPN currently only airs Monday night games. CBS and Fox have far more NFL inventory while NBC’s Sunday night slot gets the biggest ratings.

With the Premier League’s recent decision to take production in-house from IMG, they are building the exact sort of media operation that the NFL has just deemed too costly and ripe for offloading. But the advantage to the PL is that they can expand their own media offering and even begin to sell direct subscriptions of their own - something the NFL doesn’t need to consider because it makes $10bn+ a year from its domestic rights deals.

It would be interesting if DAZN sees this as a strategic path for their own future, partnering with a league, buying a minority piece of the competition and becoming the preferred global broadcaster with some carve-outs for domestic television.

Sports rights-holders have become a little jaded by participating in quadrennial bidding wars for the right to make a narrow margin on broadcasting matches. Longer-term, more integrated relationships appear to be a future path to keep the rights fees at the level required and the NFL-ESPN deal may be the first example of something we see more of in European football as the landscape continues to evolve.

Edit: for those interested, the deal was announced late on Tuesday night.

“ESPN is acquiring the NFL Network and other National Football League media assets, including the linear rights to the league's popular RedZone channel, in a deal that will see the NFL get a 10% equity stake in the all-sports network, it was announced Tuesday night.

“ESPN will also acquire the NFL's fantasy product and merge it into its existing platform, making ESPN Fantasy Football the official game of the NFL. In a separate deal, the NFL also agreed to license to ESPN other NFL content and intellectual property that will appear on the NFL Network and other assets.

“The NFL Network will be owned and operated by ESPN, which will control the network's linear and digital rights. The NFL Network will be integrated into ESPN's upcoming direct-to-consumer streaming product, and it will continue to be available on traditional pay TV providers.”

ESPN chairman Jimmy Pitaro added in a statement: “This deal helps fuel ESPN's digital future, laying the foundation for an even more robust offering as we prepare to launch our new direct-to-consumer service."

Garber bites back over Apple

Critics of the MLS-Apple deal simply “don’t get it yet” according to MLS commissioner Don Garber.

The 10-year, $2.5bn pact has attracted criticism for reducing the league’s visibility domestically, a market where they are desperate to catch on amid much competition.

But Apple bought the global rights with their investment and Garber suggested that the international viewing data is as important to him as how many are watching in the US, though both are presumably very small numbers.

“I’m as interested in who is watching in Argentina, Colombia, Brazil, Japan, China and the Middle East as I am in Columbus, Ohio,” he told Front Office Sports.

And while Garber pushed a more optimistic view of the overall deal, he did at least concede what everybody in the market seemed to know already — that numbers have not yet reached the required level where revenue-sharing kicks in, and that the league needs a big boost from next summer’s World Cup.

“I’m not sure we are where we need to be, but I know that we’re going to have to get there soon.”

Barca update

A rare item of good off-field news for FC Barcelona, who got the license to partly open the renovated Camp Nou.

Work is not finished, but they still maintain the illusion/hope of hosting Valencia on September 13/14.

Barcelona are hoping auditors will give them a reprieve from their financial issues in the coming days by recognising some new revenue and thus allowing them to register their backlog of signings.

Oh, and per ESPN they’re mulling legal action over the Ter Stegen saga.

CAS legal development

In a potentially significant legal development, the ECJ ruled last week that decisions made by the Court of Arbitration for Sport (CAS) can now be reviewed by national courts to ensure compliance with European Union law.

The judgement means that previously binding decisions made by governing bodies such as FIFA can be challenged outside of Switzerland for the first time. Clubs and national associations had previously been bound to accept verdicts made by CAS, which is based down the road from FIFA and UEFA in Lausanne.

The ECJ said in a statement that national courts or tribunals of member states “must be empowered to carry out, at the request of individuals or of the court’s or tribunal’s own motion, an in-depth judicial review as to whether arbitral awards made by CAS are consistent with EU public policy”.

The verdict follows a 10-year legal battle between FIFA and Belgian club RFC Seraing, who, alongside Maltese investment fund Doyen Sports, challenged FIFA rules on third-party ownership of the economic rights of players.

Seraing are also represented by Dupont, who has repeatedly proved himself to be a sharp-minded thorn in FIFA’s side.

Madrid medical reboot 

Real Madrid are making wholesale changes to their medical department ahead of the new season, according to The Athletic.

Carlo Ancelotti’s side were without the entirety of their back four at the end of last season, with Antonio Rudiger, Ferland Mendy, David Alaba and Dani Carvajal all out injured, which has led to major changes at the Bernabeu.

Manuel Arroyo has been recruited from Granada’s medical department, while doctors Daniel Rosado and Jaime Abascal are not expected to stay with the first team. 

Easter Egg

If you’ve read this far down and are still interested in King Charles pen drama then there’s also this video.