£300m transfer reality as big stars stay - How Man City case win could affect Newcastle United
Manchester City are currently locked in a fierce legal battle with the Premier League after facing 115 charges of alleged financial misconduct - but the top flight champions look to have scored a huge win in a separate case against the league - and it could have a huge knock on effect for Newcastle United.
Just two months after the Newcastle takeover was rubbed stamped by the Premier League, rules were brought in to clamp down on 'Associated Party Transactions' (APT), ensuring any commercial deal between a football club and companies linked to their owners are assessed by an independent body to ensure they meet the fair market value threshold.
Man City have campaigned for the removal of those rules, claiming they were 'deliberately intended to stifle commercial freedoms of particular clubs in particular circumstances and, thus, to restrict economic competition'.
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Now, a members' vote on amendments to APT regulations was dropped from Thursday's Premier League meeting which suggests, on the face of it, City's case may have been a success - although it is not yet known how big of a win they have picked up.
Any loosening or a full removal of APT rules would have huge implications for what Newcastle can do off the pitch in terms of striking commercial deals with their Saudi ownership. With St James' Park chiefs constantly on the lookout for fresh advertising deals and the opening of fresh revenue streams, having the ability to strike lucrative partnerships with companies linked with Saudi Arabia's Public Investment Fund (PIF) will open doors.
It will also ease the financial pressure surrounding the Premier League's Financial Fair Play (FFP) rules, which in turn will mean less chance of key stars such as Bruno Guimaraes, Anthony Gordon or Alexander Isak needing to be sold. Of course, more revenue coming into the club means more you can splash out - and one man believes an outlandish figure of £300m on transfers may not be out of the question at all.
Football finance expert Dr Rob Wilson recently told the i newspaper: "It would take [Newcastle] from one of the lowest spenders in the summer transfer window to one of the highest in the space of the season.
"If City win this APT case, and it allows APTs in the Premier League, then what we’ll see is some massive sponsorship deals signed almost immediately by Newcastle to boost their transfer budget for next summer. It wouldn’t surprise me in the slightest if they spend over £300m on pure player transfers."
Fresh optimism would emerge over Newcastle's ability to find a new training gear, training ground and potential stadium name sponsor as they seek to explore those further avenues of potential revenue. Darren Eales, the club's CEO, and Peter Silverstone, CCO, have both spoken at length over their hope of landing as many of these commercial deals as possible in the coming years.
Chelsea, Manchester United and Liverpool pocket tens of millions of pounds each and every season due to their incredible money-spinning agreements with companies over the sponsoring of training gear - and Newcastle will be looking to follow suit with this area of investment more than most.
Discussing this topic earlier this year, Daniel Haddad, head of commercial strategy at global sports agency Octagon, explained: “For sponsors, you've got the 19 matches in the Premier League and then a domestic cup. There are no rights around the Champions League or Europa League.
“Let’s say, for example, that a club hosts games in the Euros or World Cup, the commercial rights don't don't apply. So actually, the frequency of exposure for brands in these areas is a bit more diluted than you might initially think. It's why something more ubiquitous like a shirt deal is always there as commercial partners now how much value and exposure they are getting.”
Meanwhile, fellow financial guru Kieran Maguire, speaking about the APT case, recently told Football Weekly: "Football doesn't have a problem in terms of the money coming in, whether it's from owners, ticket sales, TV or commercially. Football has got a problem in terms of spending money - not generating money - and I think the bigger clubs don't like the idea of another Manchester City or another Chelsea threatening the existing system. Six into four doesn't go so seven or eight into four is even worse if you've got [Aston] Villa or Newcastle banging at the door."