Crystal Palace and Lyon in Europa League is a problem – but multi-club crackdown is too little too late

This article was updated after John Textor agreed to sell Eagle Football’s stake in Crystal Palace to Woody Johnson. 

It’s there in black and white. On the pitch and off it, football’s rulebook can often be infuriatingly vague, but article 5.01 of UEFA’s regulations for its club tournaments is pretty straightforward.

“No one,” it reads, “may simultaneously be involved, either directly or indirectly, in any capacity whatsoever in the management, administration and/or sporting performance of more than one club participating in a UEFA club competition.”

It goes on: “No individual or legal entity may have control or influence over more than one club participating in a UEFA club competition” — by which it specifies “holding a majority of the shareholders’ voting rights” or “being able to exercise by any means a decisive influence in the decision-making of the club”.

That is why Crystal Palace’s dreams of competing in their first ever European campaign hang in the balance. That is why the Premier League club’s largest shareholder, John Textor, is looking to offload his 43 per cent stake to New York Jets co-owner Woody Johnson — because Textor’s Eagle Football Holdings investment vehicle is also the largest shareholder of French club Lyon, who, like Palace, have qualified for next season’s Europa League.

It has been a major problem for Palace. And so it should be. Bear with me on this one, but it should be a problem. Why on earth should UEFA, European football’s governing body, allow any two clubs under the same ownership or management structure to enter the same competition? Of course there should be rules to guard against such conflicts of interest and threats to integrity.

Palace have spent the past couple of weeks quietly making their case to UEFA, pointing out that, while Textor has been indeed the club’s largest shareholder, he has had just 25 per cent of their voting rights. Indeed, in an interview with The Athletic in May last year, Textor found himself conceding that his vision of integrating Palace into his Eagle Football empire with Lyon, RWD Molenbeek (Belgium), Botafogo (Brazil) and FC Florida (United States) had proved unachievable because the club is effectively run by chairman Steve Parish.

UEFA must now decide whether the scramble to sell Textor’s shares to Johnson means Palace are in compliance. The deal, which will also have to be ratified by the Premier League, will not be completed before UEFA make their decision. The deadline for clubs to register mitigations regarding multi-club ownership passed on March 1. Palace will hope that UEFA look favourably on the act that Textor began the process of trying to sell his shares in the club last year.

If Palace are expelled from the Europa League, they cannot drop into the third-tier Conference League because, summing up this whole tangled web, the Danish club Brondby have already qualified for that competition and are owned by Global Football Holdings, an investment vehicle led by Palace part-owner David Blitzer. And Brondby, like Lyon, would take precedence over Palace because UEFA’s rules stipulate that in issues relating to multi-club ownership, priority is given to the team finishing in the highest position in their respective domestic leagues.

Sympathy will flow naturally for Palace if the UEFA decision goes against them. Everyone could see what winning the FA Cup last month meant to their supporters, the first major trophy success in their history, but it was also warmly welcomed by the wider football community because beating Manchester City in the final was an underdog triumph of the type that has become depressingly rare in the sport — not least in England, where trophies had appeared to become the preserve of a handful of rich, powerful clubs.

Sympathy also flows naturally for Drogheda United, of the League of Ireland, who have already been excluded from next season’s Conference League because of the possibility — only a one-in-15 chance in the second qualifying round — that it could have brought them into direct competition with Danish club Silkeborg, who are also under the ownership of the Alabama-based Trivela Group.

Reading through Drogheda’s statement last Monday after their appeal was rejected by the Court of Arbitration for Sport, you could not help but feel their anguish: a “community-driven club… who fight every day to punch above their weight”, who felt that a first European campaign in 12 years, by virtue of winning the FAI Cup for only the second time, would have been “transformational… not just financially, but emotionally for our players, our staff, and our community”.

But like it or not, there is still a conflict of interest — whether potential or actual — when two clubs in the same competition are operating under the same ownership. There are, as of last June, regulations to prevent it. And so there should be. What kind of governing body would UEFA be if there were not?

Palace supporters celebrate victory at Wembley in the FA Cup final last month (Andrew Kearns – CameraSport via Getty Images)

The problem is that UEFA’s belated clampdown on multi-club ownership goes nothing like far enough.

It doesn’t deter multi-club ownership at all. It just seeks to offer a semblance of compliance — a little window-dressing, really — where UEFA’s competitions are concerned, as if the only issue with multi-club networks is the relatively small (but fast-growing) threat of teams under the same ownership playing each other, rather than the much more serious issues of them losing their sovereignty, losing their identity, losing their purpose.

UEFA’s most recent benchmarking report, titled “the European Club Finance and Investment Landscape”, detailed that 105 top-flight sides across Europe are now part of a multi-club structure. That includes 15 in the Premier League, 11 in Italy’s Serie A, 10 in Ligue 1 in France, nine in Spain’s La Liga and six in the German Bundesliga.

Some clubs have done very well out of multi-club ownership — perhaps most obviously RB Leipzig, Red Bull Salzburg and Girona — but as the phenomenon has grown, the success stories have come to be vastly outweighed by the number of historic names across Europe whose identity and ambitions have been sold to overseas investors (usually, but not always, from the United States) who regard them as little more than stocks in an investment portfolio.

Some of those investors can at least claim to offer some level of expertise. Many do not.

One of the fastest-growing multi-club networks in recent years was that of 777 Partners, which bought significant stakes in teams in Spain (Sevilla), Italy (Genoa), Belgium (Standard Liege), France (Red Star of Paris), Germany (Hertha Berlin), Australia (Melbourne Victory) and Brazil (Rio de Janeiro’s Vasco da Gama). Shortly after it agreed a deal to buy Premier League side Everton — for which it failed to raise the necessary funds — the 777 Partners empire crumbled, plunging its entire stable of clubs into uncertainty or worse.

A banner reading ‘777 Game over’ hangs from a gate at Standard Liege in May 2024 (Bruno Fahy/BELGA MAG/AFP via Getty Images)

As outlined in this column in 2023, there are so many reasons to be concerned by the rise of multi-club ownership and UEFA president Aleksander Ceferin’s apparent ambivalence to the issue.

As important as the sporting integrity question is — the idea that, for example, Palace could come up against Textor’s Lyon in the Europa League — it is far less of an issue for the future of football than the existential threat multi-club ownership poses to teams, and indeed to entire leagues, if they serve as mere satellites to those at the top of the chain.

But UEFA’s long-awaited crackdown only addresses that single issue. It merely requires clubs to jump through a few hoops so that, on paper at least, the appearance of any conflict of interest is averted.

City Football Group, for example, was required to transfer its shares in Spanish side Girona to independent trustees as a temporary measure through a “blind trust” structure, under UEFA supervision, to be cleared to play in last season’s Champions League, because Manchester City were already in that competition. INEOS was required to do likewise with their shares in France’s Nice to play in the Europa League, where they could have faced Manchester United, where INEOS chairman Sir Jim Ratcliffe owns a 28.9 per cent stake and has control over sporting matters.

In the final weeks of last season, Nottingham Forest announced that Evangelos Marinakis had diluted his control of the club — placing his shares in a blind trust, submitting documents to Companies House in April to say he was no longer a “person with significant control” of NF Football Investments Limited — to ensure that they would comply with UEFA regulations next season if they ended up in the same competition as his Greek team, Olympiacos.

In the event, Olympiacos won the title, so will play in next season’s Champions League, whereas Forest ended up in the Conference League. And so, on June 12, there was a filing at Companies House to report that Marinakis was a person with significant control at the City Ground once more.

As for whether anything ever really changed beyond the paperwork, we can only take Forest’s word for it. But it is worth noting that after Marinakis went onto the pitch to remonstrate with head coach Nuno Espirito Santo after the 2-2 draw with Leicester City on May 11, the club issued a statement in praise of “our owner” and extolling the strength of “his leadership, not just through words, but through action and presence”.

Marinakis speaks with Forest coach Nuno on the pitch after the draw with Leicester last month (Justin Tallis/AFP via Getty Images)

Please excuse the tangent. The point is simply to underline that, even with his shares placed in a blind trust, Marinakis appeared to be more hands-on at Forest than your typical long-distance Premier League owner would be — more involved than Textor at Palace, certainly. But because this essentially comes down to paperwork, a box had been ticked.

Why or how Palace and Drogheda failed to jump through those particular hoops by March 1, only they know. Palace could easily claim that multi-club ownership is so far off their agenda that it did not cross their mind back in March — European qualification likewise, perhaps — but when they have not one but two significant investors with controlling interests in other teams, it looks like a serious oversight.

As for Drogheda, they won the FAI Cup last November, so surely they had ample time to ensure compliance.

That emotionally-wrought club statement last week mentioned “months of engagement, constructive dialogue, countless hours of legal preparation, and multiple proposals based on frameworks that have been accepted in the past” but said that ultimately the club had “come up short”. Whatever their frustration, the club — and they appeared to be talking for their owners here — said, “We accept responsibility and we’re sorry.”

It is genuinely a sad situation.

When you think of the various abuses, loopholes and suspicious activities that multi-club ownership allows, no one would suggest that Drogheda (or indeed Palace) are anywhere near the crux of the problem. Drogheda’s is a regulatory failure of the type that the big beasts of European football would never make. Or if they did, they would have enough weight behind them — in terms of power, finance and legal backing — to give them every chance of finding a way around it.

But none of these blind trusts or cosmetic reshuffles come close to addressing the issue in a meaningful way.

Drogheda United’s Aaron McNally (left) and Andrew Quinn celebrate winning the FAI Cup last November (Stephen McCarthy/Sportsfile via Getty Images)

What UEFA are addressing is just the tip of the iceberg: small regulatory issues at a small number of clubs at a time when there is so much more potential damage being caused to European football under the surface.

The further and deeper the tentacles of multi-club ownership spread, the closer we come to a scenario where, in future, football could be dominated by a handful of rival networks who own the biggest teams in every league on every continent — and whether those networks are owned by energy-drink manufacturers, venture capitalists or sovereign wealth funds, whether or not those sides are temporarily placed into blind trusts for appearances sake, it is a nightmarish vision for a sport whose popularity since the 19th century has been based on the very simple and very appealing principle that clubs exist simply to represent their community.

The football authorities have never shown the slightest appetite to tackle the multi-club issue, and it somehow feels entirely typical that the crackdown centres on paperwork.

Should two clubs under even partial control of the same individual or entity be allowed to compete in the same competition? No, they should not. But when it comes to addressing the issue of multi-club ownership, excluding clubs like Drogheda and Palace would achieve nothing except to underline the importance of getting the paperwork right.

(Top photo: Adrian Dennis/AFP via Getty Images)