The English Premier League kicks off on Friday in what is shaping up to be a momentous season off the pitch, as it gears up for a tense legal battle with champions Manchester City, trials new financial regulations and braces for the introduction of an independent football regulator.
The league’s clash with City, after it accused the club of more than 100 breaches of its financial rules following a multiyear investigation, is set to play out before an independent commission.
The Times reported this could be as soon as next month, although the precise timing of an outcome is unclear. City has repeatedly denied the charges.
City, which is controlled by a member of the Abu Dhabi ruling family, this year separately challenged the league’s rules on so-called associated party transactions.
The outcome of that arbitration process, which could have implications for commercial deals struck with parties deemed to be connected to club owners, is still unknown.
The world’s richest football league has also clashed with Everton, Nottingham Forest and Leicester City over its spending rules.
An investigation into Chelsea over practices under former owner Roman Abramovich is nearing a conclusion, Premier League chief executive Richard Masters said at a press conference this week, although he declined to comment on legal battles with Manchester City or other live investigations.
“We want the football to do the talking, we don’t want to normalise asterisks on the league table or long-running regulatory disputes,” Masters said. “We have to lean into these challenges and resolve them.”
With the league’s charges against City, there are risks no matter what the judgment, according to observers. One club adviser, who spoke on the condition of anonymity, warned of potentially “cataclysmic” consequences.
If the league comes out on top against City at the independent commission, a severe punishment — for example relegation to a lower division — would risk undermining years of title dominance and could prompt compensation claims by rivals against the Manchester club.
“If City were to lose, the wave of legal cases that could be put forward would be overwhelming,” the adviser said, while “if City are perceived to win, what does that mean for the league’s ability to rule and govern?”
The legal clashes come as the new Labour government seeks to establish an independent regulator to supervise clubs. Masters said talks with ministers had been “positive”.
Faced with an external watchdog, the league is separately testing new financial regulations to find an alternative to its hotly debated profit and sustainability rules, which cap how much clubs can lose to £105mn over a rolling three-year period.
It also wants to be more closely aligned with rules set by European governing body Uefa to reduce the complexity for clubs.
Some clubs have criticised PSR for incentivising them to sell players developed at their own academies, who are often fan favourites. Such profits are booked upfront, helping clubs to comply with PSR.
Masters pointed to standard accounting practices and defended the league’s record on youth development.
An ally of Masters said that clubs’ spending decisions in the transfer market were more to blame than PSR for the sale of homegrown players to balance the books.
Clubs will trial a system that limits player spending to 85 per cent of the sum of football revenues and net profit from player trading.
They will also test “anchoring” rules that link permitted expenditure to the income of the bottom-ranked team to promote a competitive balance.
The wide range of interests across the billionaires, private equity firms and sovereign wealth funds that own clubs mean reaching a consensus will not be straightforward.
But finding common ground among clubs, from old powers such as Manchester United and Liverpool to current champions Manchester City and clubs further down the table, is critical to continued success, according to Tim Bridge, lead partner in Deloitte’s sports business group.
“The future of the league is dependent on all of those stakeholders coming together. They don’t need to be 100 per cent aligned but they need to find common goals,” he said.
Despite the hurdles, Masters defended a cultural export beamed into hundreds of millions of households worldwide, whose influence goes far beyond its home country.
Even though City has won four consecutive titles, Masters noted that Arsenal and Liverpool had pushed the winners close in recent seasons.
He said he expected the league to continue to be in “growth” mode in its next financial cycle, from 2025-28, as increases in broadcast revenues from international markets such as the US make up for slower expansion in the UK.
The 20 top-flight clubs are set to generate nearly £6.4bn of revenue in the current season, according to consultancy Deloitte, up from £5.1bn in 2018-19, the final season before the coronavirus pandemic.
While Masters said it was clear the league had regulatory challenges and “some aligning to do with the clubs on big issues”, primarily the new financial system, he was “confident” of navigating them.
“By the time we sit down again in a hot, stuffy room in 12 months time, a lot of that stuff will be clearer, and we can allow the football to be front and centre.”
