Tuesday briefing: English Football Governance Bill to be published today as government’s patience with Premier League snaps
19 March 2024 - 4:30 AM
IMAGO
Tuesday briefing: English Football Governance Bill to be published today as government’s patience with Premier League snaps
- Nottingham Forest handed four-point deduction for Premier League PSR breach
- Olympique Lyonnais agree the sale of Seattle Reign FC for $54 million
- Negreira case: Barcelona court extends investigation by six months
Legislation imposing an independent regulator on English football will finally be published today following last week’s failure of Premier League clubs to agree on a new financial settlement deal with the EFL.
The landmark Football Governance Bill will be formally launched by the UK culture secretary, Lucy Frazer, at League One club Leyton Orient after the government’s patience snapped over delays to the so-called ‘New Deal for Football’.
The tabling of legislation drafted partly in response to the doomed European Super League will be followed by an event today “to look at the Bill’s strengths and weaknesses”.
“Proportionate regime”
In a statement, the Premier League said it “will now study the Football Governance Bill, working closely with Government, parliamentarians and key stakeholders.”
The league added: “We agree it is vital that football clubs are sustainable, remain at the heart of their communities and that fans are fundamental to the game.
“The Government has consistently stated that it wishes to support the Premier League’s continued global success which generates funding to help sustain the entire football pyramid.
“With our clubs, we have advocated for a proportionate regime that enables us to build on our position as the most widely watched league in the world. Mindful that the future growth of the Premier League is not guaranteed, we remain concerned about any unintended consequences of legislation that could weaken the competitiveness and appeal of English football.”
“Important milestone”
The EFL released a statement from its chair Rick Parry, in which he said: “The EFL welcomes today’s arrival of the Football Governance Bill to Parliament in what we hope will be an important milestone to help us secure the long-term financial sustainability of England’s football pyramid.
“If delivered on the right terms, this landmark legislation can help fix the game’s broken financial model by offering the independent input ultimately needed to help ensure that all Clubs can survive and thrive in a fair and competitive environment.
“The establishment of the Independent Football Regulator will be at the heart of this reform, and we are encouraged that the Regulator will be given backstop powers to deliver financial redistributions should the game be unable to agree a deal itself.”
Nottingham Forest handed four-point deduction for Premier League PSR breach
Nottingham Forest have been handed a four-point deduction following a breach of the Premier League’s profitability and sustainability rules (PSR).
The club was referred to an independent commission in January after reporting losses that exceeded the permitted amount over the three-year period ending 2022/23.
Forest, who have dropped to 18th following the penalty, had admitted to a breach of the relevant PSR threshold of £61 million by £34.5 million. The threshold was lower than £105 million as the club spent two of the three seasons under review in the EFL Championship.
In a statement, the Premier League said: “The independent Commission determined the sanction following a two-day hearing this month, at which the club had the opportunity to detail a range of mitigating factors. The Commission found that the club had demonstrated “exceptional cooperation” in its dealings with the Premier League throughout the process.”
Angry reaction from Forest
Forest have reacted angrily and in a statement noted that the “Premier League sought a sanction of eight points as a starting point,” which the club argued “was utterly disproportionate when compared to the nine points that their own rules prescribe for insolvency.”
While thanking the commission “for agreeing to deal with this matter on an expedited basis”, Forest said it was “extremely disappointed” with its decision and “extremely dismayed by the tone and content of the Premier League’s submissions.”
In their statement, Forest also referred to their sale of Brennan Johnson to Tottenham Hotspur last summer, which it is understood formed the crux of their argument. The Welsh forward was sold for £47.5 million on the 1st September deadline day in a record sale for the club.
Forest said: “Even after the Club had missed the PSR reporting deadline, it still took steps to ensure Brennan Johnson was sold before the end of the transfer window. That was a clear demonstration of our respect and support for PSR.
Forest now have seven days to notify whether they intend to appeal against their sanction. The Premier League has pencilled in 24th May as a backstop date for any appeal. The last day of the season is 19th May.
Olympique Lyonnais agree the sale of Seattle Reign FC for $54 million
Olympique Lyonnais’ parent company OL Groupe has announced it has reached an agreement for the sale of National Women's Soccer League (NWSL) club Seattle Reign FC (formerly OL Reign) to a group that includes the MLS club Seattle Sounders and global investment firm Carlyle.
In a statement, OL Groupe said the team, which it acquired in January 2020 for $3.5 million, will be sold for $58 million for 100 per cent of the shares, with the group selling its entire stake, representing 97 per cent of the club's share capital.
The sale is expected to be closed soon, subject to approval by the NWSL and MLS. OL Groupe said: “This transaction is in line with the Group's strategy, in particular the refocusing on men's football announced on October 25.”
The deal follows the completion last month of the sale of the Lyon women’s team to the American businesswoman Michele Kang, who also owns the NWSL’s Washington Spirit.
Rapidly growing valuations
The agreement is another indicator of the rapidly growing valuations of US women’s teams seen over recent months. It follows the sale last week of San Diego Wave to the Levine Leichtman family in a two-part deal that values the club at $113 million. That agreement marks the highest price ever paid for a controlling stake in an NWSL team, eclipsing the $63 million paid in January for the Portland Thorns.
Commenting on the transaction announced by OL Groupe and what it means for Lyon, Trion Reid, an analyst at Berenberg, said: “The deal is in line with the stated strategy, represents an attractive return on the initial investment, and will help to ease the club’s debt burden. However, leverage still remains high and the group remains unprofitable.”
Negreira case: Barcelona court extends investigation by six months
A ruling on the Negreira case has been pushed back to this autumn at the earliest after the judge presiding over the case agreed to extend the investigation by six months.
The case is examining FC Barcelona's payments to the former vice-president of the Spanish FA’s refereeing committee, José María Enríquez Negreira.
As reported by Spanish media, Joaquín Aguirre, the head of the court of instruction number 1 of Barcelona, has agreed to the six-month extension to the investigation, pending a report from the Spanish Civil Guard.
Negreira himself is due to appear at the court today after he was summoned by the judge to testify. He is the first of the individuals being investigated over the payments made by Barcelona to be called to testify.
Meanwhile, the Barcelona court has also ordered the admission of the Spanish Football Federation (RFEF) to the case as a private defendant after section 21 of the court upheld the appeal filed by the federation following the investigating judge’s initial rejection of its claim that it was part of the case.
The court has justified its decision on the grounds that the RFEF exercises public functions under the tutelage of Spain’s Higher Sports Council (CSD), which in turn depends on the Ministry of Culture and Sport, and considered that the RFEF is not authorised to appear as a public prosecutor.
Payments of more than €7.3 million over 17 years
The Negreira case was initially brought after prosecutors filed a complaint last March over payments of more than €7.3 million over 17 years to firms owned by Negreira, allegedly for referees to act in favour of Barcelona. Both the club and Negreira himself have denied any wrongdoing.
Barcelona were originally charged with alleged corruption in sport, corruption in business, false administration and the falsification of commercial documents. Charges of bribery were added in September after a judge said Negreira "exercised public functions" as vice-president of the Spanish FA’s refereeing committee, equating him to a civil servant.