According to the Daily Telegraph, on Tuesday, the Premier League passed new rules that require all clubs to prove that their business transactions are based on "fair market value", which is intended to restrict the large amount of capital injections for national capital-controlled clubs like Newcastle and Manchester City.
It is understood that the club's votes on the newly named "related party transaction" provisions are inconsistent. In October, Newcastle opposed the imposed rules, while City abstained in the vote. Still, with more than 14 clubs voting in favour, the rule would take effect immediately.
Under this new rule, Premier League clubs are obliged to evaluate all new commercial transactions. All new business deals for Premier League clubs in the future must be submitted to the Premier League Council. Since Gary Hoffman left office, the council is looking for a new president. All transactions are then reviewed by an independent external appraiser, who decides whether the deals represent "fair market value." Also, clubs that submit new contracts must prove that all contracts are legitimate.
The club agreed that details of all commercial transactions would be kept by the Premier League side. Data on business transactions are anonymized so that evaluators can compare transactions between different clubs and different accredited sectors.
When it comes to paying managers, players, coaching staff and club staff salaries, there are also new transparency rules in the Premier League. Clubs must demonstrate that all key employees receive their salaries from the club's approved budget on the premise of financial fairness, and not from companies associated with the club.
After Newcastle was acquired by a Saudi consortium on October 18, other clubs agreed to temporarily suspend all commercial transactions in response. In order to cope with the new situation, the Premier League has formulated new rules in a short period of time. Today, all Premier League clubs can only make commercial transactions under the guidance of the new rules.
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