Sheikh Mansour, Owner of Manchester City (middle) and Chairman Khaldoon Al Mubarak (left)
Sheikh Mansour, Owner of Manchester City (middle) and Chairman Khaldoon Al Mubarak (left)
The Football Governance Bill that seeks to establish and independent regulator of English football was back in focus this week after it was revealed an amendment had been proposed that would seek to ban state ownership of clubs.
Last week, the Times reported that Labour peer Lord Bassam of Brighton had proposed an amendment to the bill which called for legislation that would place a ban on any state-controlled football club being granted an operating licence unless that they could provide clear separation between the state and the entity which owned the football club.
City Football Group are the ultimate owners of Manchester City, with CFG chief Sheikh Mansour bin Zayed Al-Nahyan having acquired the club back in 2008. But with Sheikh Mansour being Manchester City’s principal owner, his role as deputy prime minister and vice-president of the United Arab Emirates means that the club would have been in the crosshairs of regulators should such an amendment be passed.
The same would apply to Newcastle United’s owners, the Saudi Arabian Public Investment Fund (PIF), which is the sovereign wealth fund of the Middle Eastern nation, with the PIF’s chairman being Mohammed bin Salman, the de facto ruler of the Kingdom of Saudi Arabia (KSA).
READ MORE: Farcical moment in worrying Liverpool defeat sums up where Man City are
READ MORE: Man City player ratings vs Liverpool FC including Kyle Walker disaster
The PIF deal to acquire Newcastle was passed by the Premier League in October 2021, with the Conservative government at the time under Boris Johnson less than keen to put up roadblocks to inward investment in Great Britain and impact relations with KSA.
According to Lord Bassam's proposal, the legislation would state: "No state-controlled club may be granted an operating licence, and any affected club must satisfy the IFR [independent football regulator] that they have divested themselves of their state-control before applying for an operating licence.
"A state-controlled club is one which is wholly or majority-owned by individual(s), entities, or entities controlled by individual(s) who are deemed by the IFR or the secretary of state to be under the influence of any state actor, including but not limited to: members of any government or their immediate family, a head of state or their immediate family, diplomats, lobbyists, or other state representatives, or their immediate family, and sovereign wealth funds."
While Lord Bassam’s proposals are bold, the Times reported that the chances of such an amendment being adopted were ‘small’, and looking a little deeper its not too hard to see why. Sport across the globe is now opening itself up to inward investment from sovereign wealth funds, particularly in the Middle East.
From golf’s PGA Tour, to tennis, to Formula One, to emerging sports such as Padel, a lot of capital has been deployed to target growth, and at a time when KSA is gearing itself up to show its best self to the world over the next decade in the run-up to hosting football’s biggest event in 2034, the FIFA World Cup.
North American sport, too, has opened itself up to sovereign wealth. The NBA now allows small minority percentages to be acquired, and that is a trend that is expected to continue as more and more teams and leagues look for ways to bring in fresh capital, and at far higher volumes than most traditional family offices can muster.
Between sovereign wealth and private equity, sport requires it to achieve its growth ambitions. But it is also what happens at local level.
Speaking to the Liverpool Echo last year, Professor Simon Chadwick, former Professor of Sport and Geopolitical Economy at SKEMA Business School in Paris and a renowned author on geopolitics and sport, said: “(Sovereign wealth funds) don't buy football clubs or other such assets unless it serves a purpose for a broader industrial and national development strategy.
“Look at Abu Dhabi with Manchester City. They bought a lot of real estate in Manchester and a lot of that was down to using their ownership of Manchester City to diversify revenue streams for a country that is so dependent on oil and gas.
“When oil prices fall they all take a hit. For Abu Dhabi all that real estate gives them an income stream in perpetuity.
“They aren't just trophy assets, that is not the case here. Countries in the Middle East are trying to build global networks of trade and influence and having the anchor of ownership of football clubs in the local area helps in that respect.
“Britain is open for business and the Government, like they did with the PIF deal when Boris Johnson was PM, will be encouraging this to happen.
“With PIF, the Tories needed it to happen. They didn't want the Saudis to become disaffected as it had the potential for subsequent contracts that were in place to fall through. Johnson was mindful of the 'red wall' seats and enabling the PIF deal to go through kept them in with some kind of chance in those areas.
“It is much less about managing reputation and these aren't trophy assets, they are strategic ones. Nothing will get done without the say-so of the governments of these countries giving it the green light. PIF have invested £1bn in a local chemical plant in the North East (SABIC).”
While the government may have changed from Conservative to Labour this year, it seems highly unlikely from that making such amendments that may have a material impact on geopolitical relations between the UK and the Middle East would be high on the agenda of things that should be done, especially at a time when the country wants to, and needs to, foster good relationships when it comes to inward investment.
The Premier League will also be opposed. Decision makers behind the scenes at English football’s top flight do not believe that they need to be regulated by the new independent body, and anything which could impact investment arriving into the league as it seeks to continue to grow globally and cement its position as world football’s biggest and most popular domestic competition will be fiercely argued against.
It is very hard to see that, with all things considered, such an amendment finds its way into legislation, which means that little should change for Manchester City or Newcastle United.
This article contains affiliate links, we will receive a commission on any sales we generate from it. Learn more
Premier League
Watch the Premier League on Prime Video
Amazon's Prime Video is broadcasting 10 midweek Premier League matches on December 3-5, plus 10 fixtures on December 26-27.
Each match can be streamed free with an Amazon Prime subscription or by signing up for an Amazon Prime 30-day free trial.