Newcastle United could go head-to-head with the Premier League to recoup money lost from unfair regulations.
The PIF takeover of Newcastle United in 2021 sent shockwaves through English football with the new Saudi Arabian owners promising to take the Magpies back to the top.
However, the takeover triggered some rule changes, with the Premier League shortly after introducing associated party transaction (APT) rules that blocked clubs from striking sponsorship deals with parties related to their ownership.
It meant deals such as Newcastle United’s £25m Sela deal was heavily governed before being given a green light.
Former Man City advisor and lawyer Stefan Borson explained that Newcastle’s Sela deal was actually marked down by the fair market valuation, meaning Newcastle ended up losing millions on that agreement.
However, the APT rules have now been declared null and void after a hearing judged them to be “unlawful” following complaints from Manchester City. Newcastle are now in a strong position to act on that hearing.
Finance expert tips Newcastle to seek Premier League compensation
Amanda Staveley slammed the APT rules shortly after they were introduced, and it is now clear that Newcastle’s complaints were valid.
Newcastle’s growth has been seriously hindered by the Premier League Profit and Sustainability Rules, but the unlawful APT regulations essentially stopped the Magpies from maximising their commercial and sponsorship growth.
As a result, finance expert Kieran Maguire believes Newcastle could seek compensation after losing out in commercial negotiations.
Speaking on the Loaded Mag NUFC channel, Maguire said: “I’ve actually heard this from other lawyers, they say first of all it’s absolutely essential that Newcastle have evidence that it has suffered financially in terms of an inability to generate what they would consider to be full market value for front of shirt deals and other potential deals.
“If it can evidence that, and the rules have now been deemed to be null and void throughout the period of November 2021 to November 2024, then provided the potential financial compensation exceeds the costs of pursuing it then it would be the logical thing to do.
“I’ve got a huge amount of sympathy for Newcastle United – we were very, very lucky that some of the sides that have been promoted in the last few years have been so rubbish that they have gone straight down.
“If Forest or Everton had been relegated on the back of points deductions, I think the potential financial consequences for the Premier League could have been absolutely catastrophic.
“Newcastle, I think, have lost out, and I suspect that they will [individually claim] – whether or not you could have a class action if multiple clubs come together, I think that’s unlikely – I think it will have to be done on a club-by-club basis.”
Newcastle can claim on Elliot Anderson and Yankuba Minteh deals
Eddie Howe’s hardest decision at Newcastle was being forced to sell Elliot Anderson and Yankuba Minteh to Nottingham Forest and Brighton respectively.
The pair were sold for a combined £65m just before the PSR deadline of June 30th. Newcastle would have faced a points deduction if they didn’t sell and balance their books.
Maguire believes the forced sales of Anderson and Minteh is more evidence that Newcastle can use to claim compensation.
“It is conjecture, but those players were sold right at the end of June solely for PSR reasons,” Maguire added.
“You can therefore claim that it is negligence by the Premier League in terms of the rules they introduced.
“In negligence, what you say is ‘do I have a duty of care towards Newcastle United as the Premier League?’ Well, yes you do. ‘Has there been a breach of that care?’ Well, Newcastle United have had to sell players as a result of this negligence – if proven.
“In which case, then you try to quantify the damage that has been done. You would imagine that Newcastle will be consulting its counsel over this.”
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