Five legal arguments of the Premier to stop Newcastle and five possible consequences

That the purchase of Newcastle was going to bring almost daily news from the northern club in England was something that was not quoted in the United Kingdom. The dismissal of his coach Steve Bruce has already been known and in recent days a new agreement has been known that may have unprecedented consequences.

Premier League clubs held an emergency meeting where they approved a rule to prevent Saudi owners from signing lucrative sponsorship deals. 18 votes in favour, Manchester City abstaining and Newcastle, obviously, against. Newcastle allege that this suspension of sponsorship is anti-competitive.

The context that the Premier entities argue is that the clubs want preventive measures to be implemented that prevent agreements with companies linked to Saudi Arabia or that ensure that fair market value is paid. The fact is that the rule will be in force for the next month, and it will apply to all 20 clubs. Many of them want them to be applied permanently. This novelty means that a working group, made up of a representative sample of clubs, will be created to investigate what changes (if any) should be made.

The keys to the new scenario Premier League- Newcastle

What legal arguments does this initiative have? Can the Premier League intervene to stop a new external purchase from the United Kingdom? Toni Roca is a lawyer and director of the Sports Law Institute, a Sports Law postgraduate course created in 2019 with influence in the sector. Roca, a specialist in this matter necessary to understand the problem, places in five the legal arguments that would support the new measure that 18 Premier clubs want to carry out:

1. The Premier League occupies a dominant position in the relevant markets and its associated clubs occupy a position of collective dominance. The influence and power of these entities enjoy a key lobby throughout Europe.
2. In its dominant position, the Premier League has a special responsibility to exercise its powers as a guardian in a fair, objective and non-discriminatory manner and, in particular, not to exercise such powers for an ulterior commercial reason.
3. Regardless of its dominant position, the exercise by the Premier of its powers, under the Regulations, by limiting the management of new investments, may restrict competition between the clubs.
4. That the Premier League does not apply the rules in a fair, objective and non-discriminatory manner and/or uses its powers for the improper purpose of promoting its own commercial interests and/or the interests of its commercial partners and/or some of the member clubs of PL in a manner detrimental to competition and consumers.
5. Preventing and/or delaying the management of investments may distort and/or restrict competition between PL clubs, which may cause loss and damage.

big consequences

This context would have historical consequences for a reference competition in the world of football. Toni Roca explains, also in five steps, the domino effect that the new regulations that the Premier League wants to push forward could have:

1. Violation of UK competition regulations.
2. Importance of the FFP reform (Financial Fair Play Regulations). The reform of economic control and the financing of football is once again on UEFA's agenda, specifically with the idea that luxury taxes replace the profitability threshold. This is the conflict between Bayern (stricter) and PSG (more permissive) in the ECA (The ECA is the organization responsible for granting and issuing accreditations in the country, helping to improve the quality and productivity of companies and institutions in their products, goods and services, thus allowing the fulfillment of the legitimate objectives of the State).
3. Dispute procedures in the Premier League, to avoid disputes. It is likely that if things escalate, the new owners will follow the example of the old Newcastle owner (Mike Ashley) and initiate arbitration with three independent arbitrators appointed to resolve the dispute.
4. Club concern. Premier clubs are concerned that Newcastle will "game" the break-even regime through commercial revenue by inflating sponsorships, which will give them more leeway to spend.
5. It is to be hoped that stricter regulations on related party agreements will be introduced as soon as possible and/or a broader structural debate on whether the Premier should follow UEFA's luxury tax reforms.
6. It is the task of the Premier League and UEFA to adopt the regulations for the new football-business. Added to this context is the review of the fan-led governance of football and the distinct possibility of an independent regulator. This body could supervise these issues of cost control, FFP and luxury tax.