LONDON (AP) — Newcastle’s Saudi ownership can start signing up sponsors from the kingdom after new English Premier League rules were introduced to end the brief ban on clubs bringing in such deals to potentially inflate income.
After the Saudi state’s sovereign wealth fund took control of Newcastle, a freeze on any clubs signing commercial deals with companies linked to their investors was rushed through temporarily by rivals in October to prevent them being used unfairly to comply with financial regulations.
But Premier League clubs agreed at a meeting on Tuesday to introduce regulations that mean sponsorships from companies associated with a club's owners can resume but will have to be approved by the competition's board.
The Premier League will assess if deals such as jersey sponsorships and stadium naming rights have been negotiated at a fair value that other clubs could expect to generate from similar contracts rather than being inflated. The league will weigh up the value of the deal against a database of similar transactions and consult independent assessors.
Premier League rivals were worried Newcastle will use friendly sponsorship deals with related parties to help it comply with financial fair play rules that are in place to prevent rich clubs from spending unchecked. Under league rules, clubs cannot make losses exceeding 105 million pounds ($144 million) over a rolling three-year period.
Clubs will also have to declare any payments to players, managers and their officials from companies associated with the ownership to assess if they are for legitimate work rather than a means of offloading some of their main salary.
Saudi Arabia’s Public Investment Fund bought an 80% stake in Newcastle to end the ownership of retail tycoon Mike Ashley.
PIF provided the league with legally binding guarantees that the kingdom does not own the club, while being unable to say publicly how that fits with the company board being headed by the Saudi crown prince and mostly featuring government ministers.
The remaining 20% of the club is owned by PCP Capital Partners, which is fronted by takeover broker Amanda Staveley, and the Reuben brothers who are property investors.
The northeast club, whose jerseys are sponsored by a Chinese gambling firm, is fighting relegation and can’t sign any players until the January transfer window.
Another Premier League club, Manchester City, also has ownership linked to a country. City has been controlled since 2008 by Sheik Mansour, a member of Abu Dhabi's royal family and deputy prime minister of the United Arab Emirates. Abu Dhabi’s national carrier, Etihad, sponsors the jerseys and stadium at the reigning champion.
More AP soccer: https://apnews.com/hub/soccer and https://twitter.com/AP_Sports