The Premier League has backed away from closing a loophole that allows clubs to sell assets to sister companies in order to meet Profitability and Sustainability Rules (PSR) (h/t the Times).
At the league’s annual meeting near Harrogate, a proposal was raised to ban internal deals such as Chelsea’s recent high-profile asset sales, but it didn’t even reach a vote.
Some clubs backed the idea, but they needed 14 out of 20 votes to pass. They didn’t get enough support, so the motion was dropped altogether.
The plan was to shut down accounting manoeuvres like the one Chelsea used to avoid PSR backlash.
The Blues sold their women’s team for £200 million and transferred £70.5m worth of two club-owned hotels to a sister company.
Some clubs felt that trying to change the rules now would be like ‘closing the stable door after the horse had bolted’.
Others argued that it would unfairly prevent clubs from raising money by selling legitimate assets, especially to third parties. The plan is for PSR rules to stay intact next season.
The initial plan was to replace the rules with a modern cost-control system.
But with Manchester City’s legal battle against Associated Party Transaction (APT) rules set for arbitration in October, the clubs agreed in February to maintain the existing framework for at least another year.
Clubs can lose no more than £105m over a rolling three-year period under PSR. However, spending on infrastructure, youth development and women’s football is exempt.
That caveat has been most useful to Chelsea, but Manchester United, Newcastle United, and Aston Villa have pointed to PSR as a reason for their limited activity in recent transfer windows.
It’s worth noting that while the Premier League has agreed to turn a blind eye to these internal sales, UEFA does not.
The European governing body doesn’t allow related-party deals to reflect in revenue calculations and are in talks with Chelsea over a financial settlement for breaching the rules.
