Update: An adboard for Chelsea's possible new main sponsor, Infinite Athlete, was spotted by the fan account Chelsea Graves Society (@CFC_Graves_So) at Stamford Bridge. It will be interesting to see if Infinite Athlete will be already present on Chelsea's adboards and kits in tonight's game against Lusto Town, but it appears very unlikely. Instead, it was likely just a test of the club.
24 August 2023: Why Premier League Investigate Infinite Athlete Sponsorship Deal
Chelsea's deal with sports data company Infinite Athlete has still not been announced, and there is a reason for this. There are heavy questions if the deal breaks the Premier League rules of fair market value and independence. Footy Headlines summarize what the different parties say, and how likely it is that the deal will be approved.
Chelsea x Infinite Athlete Deal to Be Blocked or Granted?
Chelsea's potential shirt sponsorship deal with Infinite Athlete may not happen as the Premier League are conducting due diligence on the proposal. Chelsea reportedly remain optimistic that the Premier League will approve the proposed £40 million-a-year shirt sponsorship deal (previously it was also said to be worth £50 million a year).
Why the Premier League Do Not Allow Any Deals?
Premier League want a (relatively) fair competition despite teams having rich owners. After Newcastle United were taken over, all deals over UK£1 million are assessed for fair market value.
Why the Chelsea x Infinite Athlete Deal Could Be Blocked
The Premier League are scrutinizing the Infinite Athlete deal as there are concerns over whether it abides by their "fair market value" rules. Infinite Athlete were created just a week before discussions with Chelsea began. The company's estimated turnover is just £12 million ($15m) a year, and the deal is set to be worth around £40m ($51m) to Chelsea.
One of the major investors in Infinite is the firm Silver Lake, which also has ties to Fanatics. Clearlake Capital, who backed the consortium that took over Chelsea after Roman Abramovich left, has invested millions of dollars in Fanatics.
❌ Reasons for Chelsea x Infinite Athlete Deal to Be Blocked
🤔 Concerns over "fair market value" rules
👥 Infinite Athlete were created just a week before Chelsea's deal
💰 Estimated turnover of £12m/year, deal worth £40m to Chelsea
💸 Clearlake Capital invested in Fanatics and backed Chelsea's takeover
Why Infinite Athlete & Chelsea Think the Deal Could Be Granted
According to The Telegraph, Infinite Athlete informed the Premier League that they raised hundreds of millions in investment, and their investors and backers generated revenue in the same amount.
Infinite Athlete have been granted exclusivity to finalize their proposed deal with Chelsea. Both parties are optimistic that the sponsorship will be formalized in time for the company's logo to be worn by the club's players this season.
✅ Reasons for Chelsea x Infinite Athlete Deal to Be Granted
💱 £40m Deal is Fair Market Value: Other big Premier League clubs get similar or more money as
🤔 Premier Laggue rules apparently only consider fair market value - deal can not be blocked just because of links to the owner
🏟️ Deal is compared to Social Finance Los Angeles Stadium deal - Social Finance were also considered a technology start-up back then
⛳ Infinite Athlete have already partnered with sports leagues globally, including NFL, and tech-focused golf series TGL
📱 Chelsea’s product partnership with Tempus, which now operates under the Infinite Athlete umbrella, saw them launch Match View X technology on the club’s app already in March
Imperfect Premier League Rules?
What is bad about Financial Fair Play Premier League rules, as highlighted by expert the Swedish Rumble (@SwedishRumble), is that the Fair Market Value definition used in the Premier League rules is very standardized. The identity of the party buying a service is irrelevant. The Fair Market Value remains the same regardless of who buys it. The valuation based on this definition creates a fictional market and simulates a transaction.
The Swedish Rumble Say that the Fair Market Value Rule is Imperfect
The Swedish Rumble suggests the league to include a catch-all “No Circumvention” provision like many of the US pro leagues do. It is a "mockery of the rules if an owner can just create a shell company, provide it with an IOU, and funnel cash to a club".
Footy Headlines Estimate: Deal Will Be Approved - Probability at Least 80 Percent
Footy Headlines think the deal will likely be granted, with a chance of around 80%. Why?
As explained by the Swedish Rumble (@SwedishRumble), the current Premier League rules do almost only look if a deal is a "Fair Market Value". Chelsea's ₤40 million-a-year deal is in line with other top-team deals, even though Chelsea won't play in Europe this season.
However, looking at the “FMV Assessment Factors” in Appendix 18 to the Rules, the type of business a counterparty conducts is also a relevant factor that should also be submitted. So, there is a (small) chance that the deal will be blocked.
👍 Pro - Chelsea Infinite Athlete Deal Will be GRANTED:
Chelsea's ₤40 million-a-year deal aligns with other top-team deals, despite no European football this season - rules do not forbid that the same person (also partly and indirectly) own club and sponsor
👎 Con - Chelsea Infinite Athlete Deal Will be BLOCKED:
The Fair Market Value Assessment Factors consider the type of business a counterparty conducts - Infinite Athlete virtually have no business yet.
Do you think the Premier League will allow Chelsea's Infinite Athlete deal? Let us know in the comments below.