Sources: FFP-busting Man City plan in peril amid £50m document reveal
Powerful voices within the Premier League want to impose an annual £50million cap on related-party transactions to prevent Man City and Newcastle United from artificially inflating their income, Football Insider has learned.
There are concerns that the two Gulf-state-financed clubs are using sponsorship deals with businesses in their owners’ portfolios to generate commercial revenues that would otherwise be unachievable, thereby circumventing Financial Fair Play rules.
It can now be exclusively revealed that, as per documents obtained by Football Insider, a £50m related-party cap was proposed in the fine print of Project Big Picture, a 2020 plan to restructure the governance of English football.
It is understood that the cap was championed by both Man United and Liverpool, and there remains a strong appetite to introduce this facet of the proposal despite the fact Project Big Picture was itself rejected in October 2020.
There are also calls to adopt a more stringent definition of “related party”, possibly in collaboration with the UK Takeover Panel, the UK’s regulatory body charged with enforcing the City Code.
Under this model, club directors would sign off on financial submissions and, if found to be knowingly in breach of the regulations, would face a five-year ban from football.
The government will soon present a white paper outlining the remit of an independent regulator for English football, a body that could theoretically enforce a related-party quota.
Football Insider analysis has found that four of the seven commercial deals signed by Newcastle since the Saudi Public Investment Fund’s historic takeover have been with companies classified by the Premier League as related parties.
Meanwhile, close to 70 per cent of the league’s total number of related-party deals belong to Man City.
As per regulations introduced in the wake of the Newcastle takeover, all related-party arrangements – and indeed all commercial deals worth over £1m – are assessed for fair market value by a Premier League committee.
The top flight’s current related-party definition has been derided as vague by analysts but does take into account “the substance of the relationship and not merely the legal form.”
In other news, Man City stadium expansion plans revealed as £10m-a-year boom imminent.