Premier League Temporarily Bans Owner-Affiliated Sponsorships

The Premier League voted to temporarily ban teams from signing sponsorship deals with entities associated with their owners, the latest move in the fallout from Newcastle’s change of ownership.

The ban lasts for one month, providing a period in which the league will negotiate permanent restrictions on owner-connected sponsors.

The vote passed 18-1 in an emergency meeting on Monday, with Newcastle voting against and Manchester City abstaining on advice from their legal counsel that the vote was illegal.

While league officials were already considering such a move, the ban was spurred by Saudi Arabia’s sovereign wealth fund’s purchase of Newcastle for $409 million earlier this month.

• The country’s Public Investment Fund manages an estimated $500 billion in assets.
• Its diverse range of investments includes a $3.61 billion stake in Activision Blizzard, $2.04 billion in Electronic Arts, $1.1 billion in Live Nation Entertainment, and $998.4 million in Take-Two Interactive as of June 30.
• The PIF owns 80% of Newcastle, with the remainder split evenly between PCP Capital Partners and billionaire brothers Simon and David Reuben.

Premier League owners said they were concerned that Newcastle could sign sponsorship deals at inflated prices with Saudi state-owned companies to allow for more spending on players. 

The league’s fairness-of-play rules cap team losses at $144.9 million over a rolling three-year period. Revenue from sponsorships and other sources negate losses, allowing teams to devote more funds to player salaries and transfer fees.

Existing deals made by Manchester City, Leicester City, and Everton will not be affected by the ban.