The Premier League is considering a formal ban on debt-fuelled club takeovers as part of a wide-ranging overhaul of its ownership rules.
Sky News has learned that the top 20 clubs are being asked by Premier League executives for their views on the merits of a block of leveraged buyouts.
The consultation process, publicly announced by league chief executive Richard Masters, is expected to conclude shortly.
Any proposed rule changes relating to the Owners and Directors Test (OADT) would be discussed at a meeting next month and voted on in September.
A ban on leveraged buyouts will not move forward safely – and would not be applied retrospectively – but if implemented would prevent the kind of deal that saw Manchester United taken over by the Glazer family in 2005.
Concerns have been raised over the financial health of Burnley, the Lancashire side currently battling relegation to the Championship.
Burnley is owned by ALK Capital, a US-based consortium that has reportedly used the club’s money to fund a £170million takeover.
An executive at another Premier League club said they were asked their opinion on whether such deals should be banned.
Restrictions on takeovers funded by private equity firms are unlikely to be pushed ahead due to clubs’ lack of appetite for such a move, another insider said this weekend.
This is potentially significant given that the £2.5bn purchase of Chelsea by Roman Abramovich, the sanctioned Russian businessman, is being majority-funded by Clearlake Capital, a California private equity firm.
The Chelsea deal, led by LA Dodgers baseball partner Todd Boehly, will be funded entirely by equity.
Guarantees secured by Mr. Abramovich’s advisors at Raine Group, the U.S. merchant bank, mean the new owners will have $1.75 billion.
Chelsea’s operating license expires at the end of this month, with the sale requiring separate Premier League and ministerial approvals.
The Premier League’s review of the OADT has been underway for months, prompted in part by the controversy over the acquisition of Newcastle United by a consortium led by Saudi Arabia’s sovereign wealth fund.
His urgency was heightened by the government’s response to a review of England’s football governance led by Tracey Crouch, the former sport secretary.
Last month the government signaled its support for an independent governing body for sport, although key details, such as whether the FA will oversee a new body, have yet to be finalized.
Any changes to the Premier League’s ownership test would need the approval of at least 14 clubs and club leadership recognizes reforms could be superseded by any requirements from a new regulator.
In March, The Guardian reported that a human rights test could be included in the league’s rulebook – a nod to the row sparked by the Newcastle United takeover.
A separate ownership charter developed by the Premier League appears to have been temporarily shelved, with some of the so-called ‘Big Six’ reportedly refusing to sign it despite disputes over their involvement in a European Super League.
The Premier League declined to comment on Saturday.
Premier League considers ban on debt-fuelled club takeovers | business news
Source link Premier League considers ban on debt-fuelled club takeovers | business news