The charges brought by the Premier League against Manchester City earlier this week could have a knock-on effect on the potential sale of Liverpool.
On Monday the Premier League took the unprecedented step of charging the current champions with more than 100 alleged breaches of the League's profit and sustainability rules relating to sponsorship deals, player and manager remuneration and co-operation with the four-year investigation itself.
Manchester City were banned from the Champions League for two years back in 2020 after a UEFA investigation found them guilty of Financial Fair Play breaches relating to sponsorship deals. That was overturned on appeal, however, as the club won their case at the Court of Arbitration for Sport in June of 2020 and were allowed to compete in European competition, having a £25m fine reduced to £9m.
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The sheer volume of the charges laid out by the Premier League, and the fact that there is no chance of appeal to the CAS by City on this occasion, allied with there being no 'time barred' ruling that would prevent older allegations to be considered, means that the club face a lengthy legal battle, one that is likely to drag on for years rather than months. The charges must be upheld by an independent commission before the process can even move to the next stage.
Regardless, the very public humiliation that the charges have brought will likely not sit well with the club's Abu Dhabi owners City Football Group, whose investment into Manchester City has turned them into the team to beat in the Premier League for more than a decade. Potentially interested parties in investment or a takeover move for Liverpool will be watching with interest.
Liverpool owners Fenway Sports Group are open to selling their whole shareholding in the club should the right offer, well north of $4bn, come along, although it remains the preference for FSG that they sell a partial stake in the club that would allow them to retain control, recapitalise the business at a key time and be able to benefit from the likely increasing value and revenue that will come along with latent value in the Premier League being unlocked through a changing broadcast landscape in years to come and enhanced ability to reach and monetise a global fan base of hundreds of millions.
Interest from the likes of Qatar and Saudi Arabia has been rumoured, although sources in the US have told the ECHO consistently that no bids or high level talks have yet taken place, as well as expected interest from US institutional investors.
But with sporting investment from the Middle East comes other strategic geopolitical objectives related to improving the economic landscape as MENA nations look to diversify revenues streams away from being so reliant on oil and gas. In the case of Abu Dhabi, the takeover of Manchester City back in 2008 also opened up the door to much investment from the Gulf state into real estate in Manchester.
Professor Simon Chadwick, Professor of Sport and Geopolitical Economy at the SKEMA Business School, has spent much of his time in the Middle East over the past 15 years. He believes that there will be some questions being asked around the current situation with Manchester City.
Speaking to the ECHO, Prof. Chadwick said: "The view pre-Brexit was that Britain had a pretty liberal approach to governance. The Premier League statement and its timing kind of leads into the improving governance narrative that we have seen post-Brexit.
"It is a very complicated matter. Boris Johnson engaged in populist politics to appeal to the 'red wall' seats and football-loving voters in the wake of the European Super League. His knee-jerk reaction to the ESL meant that he waved through the Fan-Led Review, something that was supposed to be released the day after the Premier League brought the charges against City this week. That call for greater governance, I'm not sure he fully appreciated the ramifications of it.
"He caused a whole heap of trouble and I'm not sure the Government knows how to get out of the corner it is in. If the Government starts questioning the likes of Saudi Arabia and Abu Dhabi then there is a chance that they put their investment into Britain on hold. There has been no scrutiny for decades and now there is all this pressure on the Premier League to be more robust with issues of Financial Fair Play. The Government and the Premier League know that they have little room for manoeuvre.
"This is the most valuable football league in the world. It brings tax contributions of £3bn and it is seen as one of the things that Britain is still good at globally. When you start tampering with the elite clubs you run the risk of pressing the self-destruct button."
While Manchester United are reportedly in the scope of Qatari investors interested in a full takeover of the club, Prof. Chadwick believes that there will be deeper questions being asked around the future plan by sovereign wealth funds like the Qatar Investment Authority, as well as funds such as Qatar Sports Investments that have strong links to the crown.
"In Qatar, QSI (Qatar Sports Investments) has a team of advisers close to government," said Prof. Chadwick. "They will likely see this and be thinking 'should we be worried, are you trying to deny us freedom?'
"The British Government is closer to Qatar than Abu Dhabi and there are potential warning shots here. This is principally about politics.
"Why would the Government extend the freeport zone up to Salford (they also afforded Liverpool freeport status to encourage global investment through customs and tax exemptions)? The Government is creating an appetite to spend more in Manchester at the same time as an Abu Dhabi-owned asset is being investigated. The likes of Qatar and Saudi may think 'if they did it to them they can do it to us'.
"What this has done is send a message to those who have been investing that the landscape may be changing and that there are greater levels of scrutiny.
"I do think that this has the potential to complicate or stall takeover or investment talks that may have been in the offing. The Government are letting the Premier League carry the can more than some people might realise. This is much less about Manchester City and much more about the relationship between the Premier League and the British Government.
"With investment from the Middle East, whether it be Abu Dhabi, Qatar, Saudi or elsewhere, there often follows investment into Britain itself and what happened could have ramification further down the line."
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