Premier League 'improperly influenced' in decision to block Newcastle takeover

The Premier League was "improperly influenced" by other top-flight clubs and media group beIN in reaching a decision that effectively blocked the Saudi takeover of Newcastle, a tribunal has heard.

The "active lobbying" by the clubs and beIN, which owns the broadcast rights for the league in the Middle East and north Africa, "distorted the Premier League's fair and objective application of the rules" in relation to the proposed deal, it was argued.

The league is a defendant in a Competition Appeals Tribunal (CAT) claim brought by St James Holdings Ltd (SJHL), a company wholly owned by Newcastle owner Mike Ashley.

The basis of the claim is that the league, in deciding last summer that the Kingdom of Saudi Arabia would be a director exercising control over the club and therefore subject to its owners' and directors' test (OADT), did not apply its rules in a fair, objective and non-discriminatory manner, causing SJHL to suffer financial losses as a result when the takeover deal did not proceed.

Daniel Jowell, acting for SJHL, claimed the Premier League's decision on Saudi Arabia's director status had been reached after third parties influenced it.

"At the same time that the Premier League was reaching its decision (on the takeover), beIN was in the midst of negotiations for a new three-year broadcast rights deal," he said.

"(These were) going on behind closed doors and without competitive tender process. The (broadcast) deal was announced in December, after the takeover was effectively blocked by the Premier League decision.

"A number of major clubs that control or strongly influence the Premier League also joined in the lobbying against the deal.

"(Premier League chief executive) Mr Richard Masters held more than one direct meeting with beIN at this time.

"We say this lobbying distorted the Premier League's fair and objective application of the rules. The result of all of this is that PIF (the Saudi Public Investment Fund) pulled out of the takeover."

Jowell said the claim of loss would centre on the difference between the agreed sale price and the current market price. He said the loss was "substantial" and that it currently "exceeds £10million" but could fluctuate as a result of other factors, such as if the club were relegated.

Wednesday's hearing concerned an application from the Premier League that the tribunal does not have jurisdiction to hear the claim.

Adam Lewis, acting for the league, set out the three reasons why it had made the application.

Lewis said SJHL was bound by Football Association rules which oblige participants involved in a football dispute to go through the arbitration process in the first instance. Jowell disputed that SJHL was bound in this way.

Lewis said the arbitration hearing connected to the dispute over the Newcastle takeover bid is set to start on January 3 next year and run for a little over a week.

He said the competition claim from SJHL was therefore an "abuse of process" and had at the very least been brought prematurely, and that nothing alleged in this claim was not already part of the arbitration.

He said the arbitration would make the CAT claim unnecessary if the club wins, and impossible to sustain if the club loses, and that it had been brought to "impose improper pressure" on the Premier League and offer Ashley "a second bite at the cherry".

He also said SJHL did not have standing to make a claim as this was a "hypothetical loss".

"There is nothing to show that the transaction will not go ahead if KSA is not assessed against the OADT (owners' and directors' test)," Lewis said.

"Nor is there evidence the price will be any different. Far from having suffered any loss at the moment, SJHL still owns the club and still has the prospect of completing the deal. It does not have standing to bring this claim. It has to show loss has occurred. They have shot their bolt too quickly."

Jowell said there was "no basis" for assuming PIF would definitely still be interested in a takeover when the arbitration concludes next year, still less that it would go ahead on the same terms as previously agreed.

"Even if PIF were prepared to go ahead on the same terms, St James would still have a claim for being kept out of its money for three years," Jowell said.

The Honourable Mr Justice Miles said the tribunal would "go away and consider with care" the evidence put before it.