The Premier League is considering a formal ban on the takeover of clubs caused by loans, as part of a far-reaching revision of property rules.

Sky News has learned that Premier League executives are questioning 20 major league clubs for their views on the merits of blocking so-called buy-outs.

The consultation process, which was publicly announced by league general manager Richard Masters, is expected to be completed soon.

Any proposed changes to the rules concerning the owners and directors test (OADT) will be discussed at next month’s meeting and voted on in September.

The leverage ban will probably not move forward – and will not be applied retrospectively – but if implemented, it will hamper the type of deal in which Manchester United acquired the Glaser family in 2005.

Concerns have been expressed about the financial health of Burnley, a Lancashire side that is currently struggling with relegation to the Championship.

Burnley is owned by the US-based consortium ALK Capital, which reportedly used the club’s money to fund a £ 170 million takeover.

The executive head of another Premier League club said they were asked for their opinion on whether such deals should be banned.

Restrictions on takeovers funded by private investment companies are unlikely to be imposed due to a lack of appetite among clubs for such a move, another insider said this weekend.

This is potentially significant because the $ 2.5 billion purchase of Chelsea from Roman Abramovich, a Russian businessman, has come under sanctions, mostly funded by California-based private investment firm Clearlake Capital.

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The deal with Chelsea has provided £ 1.75 billion to be used in part for the women’s team

The deal with Chelsea, led by Todd Boley, co-owner of the LA Dodgers baseball team, is fully funded by equity.

Guarantees provided by Mr Abramovich’s advisers at Raine Group, an American commercial bank, mean the new owners will allocate £ 1.75 billion to invest in Chelsea’s home on Stamford Bridge, its academy and women’s team.

Chelsea’s license expires later this month, and the sale requires separate approval from the Premier League and ministers.

The Premier League’s review of the OADT lasted for several months, in part sparked by controversy over the takeover of Newcastle United by a consortium led by the Sovereign Wealth Fund of Saudi Arabia.

Its relevance was heightened by the government’s response to a review of English football management led by Tracy Crouch, the former Minister of Sport.

Last month, the government announced its support for an independent regulator in the sport, although key details such as whether the FA has oversight of the new body have not yet been determined.

Any changes to the Premier League’s ownership verification must be approved by at least 14 clubs, and club leaders recognize that the reforms can be replaced by any requirements of the new regulator.

In March, The Guardian reported that a human rights test could be added to the league’s regulations, a nod to the controversy over the capture of Newcastle United.

A separate owners’ charter drafted by the Premier League seems to have been temporarily postponed, and some of the so-called “big six” are said to have refused to sign it, despite controversy over their participation in the European Super League.

The Premier League on Saturday declined to comment.

https://news.sky.com/story/premier-league-weighs-ban-on-debt-fuelled-club-takeovers-12612619

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