Arsenal, Chelsea, Liverpool, Manchester City and Manchester United are likely to face legal action from the other 15 Premier League clubs if they join a proposed European superleague in 2021, breaking their pre-existing commitments to the Premier League.
Secret discussions involving the five Premier League clubs to form a new continental superleague have been exposed by Der Spiegel in recent days.
The German magazine revealed that 16 leading European clubs were on the draft of a “binding term sheet” to create a new league – which, according to the document, is intended to be signed by the competing clubs this month. All teams, it is reported, would leave their national leagues after the end of the 2020/21 season.
However, it would be almost impossible legally for the five English clubs to leave the Premier League before the end of the 2019/22 broadcasting deal, i has learned.
Binding contract
All 20 top-flight clubs have previously consented to the Premier League selling the media rights on their behalf for the three seasons up to 2022. It is understood that clubs are precluded from exiting the contract midway through, in order to protect broadcasters’ investments.
“If the reports about the new superleague proposals are accurate, legally it would be extremely challenging for Premier League clubs to extricate themselves from the commitment that they’ve already made in terms of domestic and international rights without a significant financial deal being done,” said Darren Bailey, a consultant for Charles Russell Speechlys’ sports group.
“All of the other clubs would look to take legal action,” Bailey warned. “The potential damage claims would be highly significant. My sense is it’s most unlikely that they’d be able to get out of the contract because of the consequences and contractual commitments that they’d made.
“You’re essentially taking away a major part of the value from the league with the top five clubs – both in domestic terms and internationally. They would have tried to tie them in.”
More equal than others
The Premier League has already sold all domestic broadcasting rights for the 2019-22 period and the sale of foreign rights is expected to be concluded by the end of this year. While the value of the domestic rights decreased by around £500 million, the overall value of the rights is expected to increase due to growing interest in the Premier League from abroad, including China and the United States.
In June, the Premier League announced overseas rights would be apportioned based on a club’s league position, ending the equal share arrangement – a significant victory for the leading clubs, who will now stand to get a higher overall share of broadcasting revenue. It had been hoped the deal would quell leading English teams’ discussions of a European superleague with the biggest clubs on the continent.
“The administrative and legal consequences of stepping outside of the football family are significant,” said Bailey. “It would be a genuine breakaway. The consequences of forfeiting the privileges that go with being part of the football family can’t be overlooked. There’s a lot of bargaining to be done.”
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