Only luck stopped Premier League from ruining Everton and Forest
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Martin Samuel
We now know sponsorship rules effectively did not exist — so how can Richard Masters’s position as chief executive remain tenable after narrowly avoiding biggest legal action in football history?
There is one silver lining for the Premier League, as it sifts through the ashes of its rule book. Everton and Nottingham Forest were not relegated.
Imagine if, right now, those clubs were preparing for matches against Sheffield United and Preston North End in the Championship. Imagine what that demotion would have meant for the club now contemplating Champions League football next season; imagine what it would have meant for Everton in the year of their move to the new stadium at Bramley-Moore Dock. Would Everton have found a buyer, would Forest have been able to retain many of the players that have embarked on a quite miraculous campaign?
The Premier League could have done quite irreparable harm to two clubs that would now be aware they had fallen foul of a set of rules that did not exist. That is what void means, in the context of the latest decision. Void ab initio — void from the start. It is not only that a number of the Premier League’s financial regulations cannot simply be retrofitted, it is that the rules that were in place must be treated as if they did not exist.
The most damning statement in this latest ruling is that the Premier League employed “sleight of hand”. There should be considerable disquiet among stakeholders about that, considerable disquiet about the tenure of the Premier League’s chief executive, Richard Masters, and its chairwoman, Alison Brittain. Are their positions even tenable now?
When both sides claimed victory after the initial ruling, legal experts advised to wait for the award of costs. With this clarification, it is plain that bill is likely to be handed largely to the Premier League, believed to total in excess of £20million. It is not passed directly to clubs as a £1million invoice but taken off revenue distribution figures. As these also go towards profitability and sustainability calculations, this is rather an unfortunate position. A governing body that scrutinises balance sheets and hands down punishments if the sums do not add up is actively costing clubs money. Masters must hope he has credit in the bank; although given his recent track record on litigation and shareholder clubs, how could he?
Masters is no Ricky Jay. From the beginning, his illusions were easily worked out. “You would have to be a juvenile with extremely limited intellectual and analytical capacity to declare this a victory for Manchester City,” announced one commentator who transpired to be neither as smart nor as insightful as he imagined.
Simon Cliff, group general counsel for the City Football Group, was widely decried when he warned that the Premier League should not rush into any new Associated Party Transaction (APT) ruling, before clarification had been provided on the legality of the existing rules. But he was right. It was a foolhardy attempt to pretend all was business as usual and that a few swipes of a blue pencil could smooth away an initial decision that read: unlawful, unlawful, unlawful, unfair, unfair, unreasonable, unreasonable.
Masters spoke of “discrete elements” of the rulebook that were wrong, and talked up the many legal arguments the Premier League had won, as if this was a tennis match and all points were scored equally. In doing so, he tried to convince his shareholders that the areas in which City had won were swamped by their reverses. This wasn’t correct. City’s wins were big. City’s win struck to the heart of football’s financial calculations and the Premier League’s right to structure them that way. As has been subsequently confirmed.
Yet set aside the legal arguments for a moment. There was another, childishly instinctive, means of calculating which way the initial verdict had gone, that many chose to ignore. The panel delivered its initial verdict on Wednesday, September 25. The Premier League finally made those findings public on Monday, October 7, a full 13 days later. By the end, City were threatening to release the report to the 19 other top-flight clubs unilaterally, so frustrated were they by the league’s delaying tactics. Now, if the league had won big, if City’s gains were merely “discrete elements” — as suggested — why the hold up?
The league would have shouted their triumph from the rooftops, surely, as they did when the November amendments were passed. Instead, it was City driving to publish, City who were insistent on getting the material out. At one point, there was fear that the Premier League might even try to delay the panel’s findings beyond 2024. Put it like this: say the FA Cup final was played entirely behind closed doors: no fans, no cameras, no media. At the end, one team wanted to put the result out, and the other was happy for it to remain a secret. Who would common sense tell you had won?
Now, let’s go further, and leave City out of it. Aston Villa saw this coming too. Villa were among those counselling caution rather than rushing towards a hasty APT redraft. Yet ultimately, Masters did not even heed his own advice. “It is a risk to rush through complex legislation,” he wrote in this newspaper last April. “The past tells us that rushed legislation is usually bad legislation.”
He was talking about the government regulator, but the same logic applied to his APT rewrite. He spoke of it needing only tweaks, and its passing was trumpeted as an epic defeat for City. It was never anything of the sort. The verdict was always coming down the line. The same panel are now considering the November reshoot, but have declared the rules around which the changes were framed as void. Let’s just say it isn’t the most auspicious start.
Equally, where do Everton and Forest stand over substantial legal costs incurred fighting points deductions delivered using a rulebook that is now to be treated as if it did not exist? In the circumstances, do they not have a compensation case?
The Premier League’s response here is to be expected. It will no doubt argue that November’s APT rules are still operational and that nothing has changed. Why, after this, should any stakeholder believe them? Can they really retrofit the new rules to old ones now declared void? And what happens when these are examined — the process is ongoing — if that decision goes against the Premier League too? Masters may claim that won’t happen, but as he’s been wrong at just about every turn on the APT trail, should anyone listen? He is no longer speaking with credibility. Neither is Brittain. Their briefing talk of tweaks and blue pencils sounds increasingly hollow.
The old Premier League was always a facilitator. Its executives helped clubs do business and had a light touch. Under Masters, perhaps through fear of government intervention, the league has become a regulator, and a heavy-handed one at that. A ten-point deduction here, four points taken there. Legal bills spiralled to £45million in 2023-24 — more than £2million per club.
Yet is the regulator any good at regulation? Not on recent results. When Leicester City challenged them over an alleged breach of Profitability and Sustainability Rules, Nick De Marco KC claimed that the Premier League as good as asked the panel to consider what the rulebook intended, not what it said. Funnily enough, legal minds do not work like that.
The other purpose of the Premier League is to manage efficiently the affairs of its stakeholders. Is this efficient management, a fresh round of seven-figure legal bills — with the meter still running? At Richard Scudamore’s leaving party, owners watched in wonder as graphs were displayed on screen detailing the way the Premier League’s revenue had risen on his watch. What would be the mood music now? Sirens, alarm bells, something creepy by John Carpenter?
How can any club confidently calculate their profitability and sustainability figures when nobody knows whether this rulebook will be in legal operation by the time of the deadline? This is not efficient management. Masters is not an efficient manager. He is actually very lucky to have avoided the biggest legal action in football history from Everton and Forest. But even that may not save him.
