Manchester City's Signing of Savio Under Scrutiny: Fair Market Value and Compliance with Cost Controls

Introduction

Manchester City's recent signing of winger Savio from an affiliated club is expected to face scrutiny from the Premier League regarding fair market value. This is due to the fact that Savio is already an employee of the City Football Group (CFG), which raises concerns about circumventing cost controls.

Valuation and Deal Details

The exact fee that Manchester City will pay the affiliated French club Troyes, who signed Savio in 2022 and then loaned him to Girona this season, is unclear. However, bids from other Premier League and Bundesliga clubs have reportedly been around £25 million. Manchester City is currently preparing the necessary paperwork to finalize the agreement.

Rules and Regulations

Both UEFA and the Premier League have clauses in their rulebooks that address business transactions between teams under the same ownership. If these deals are deemed to involve rival teams, UEFA would be expected to block them. In light of the recent takeover of Newcastle United by Saudi Arabia, Premier League clubs have also tightened rules on related-party transactions involving their members.

Under the new terms drafted in 2021, clubs must demonstrate the "fair market value of the transaction" to the league's board. This will be a crucial factor in determining whether the Savio deal is approved. The Premier League is aligning itself with the new UEFA assessment system, which will be implemented from next season. The player's value will be assessed at "book value," allowing Manchester City to spread the agreed fee over the duration of Savio's contract.

Savio's Background and Future

Savio has not yet played for Troyes, as he has spent last season at PSV Eindhoven and has been playing for Girona this season, where he has scored five goals in 23 appearances. He is expected to remain in Spain until the summer before joining Manchester City as a left-sided attacker. Given the competition for places at the treble winners, another loan move is likely.

Increased Scrutiny and Future Developments

The Savio deal is the first since more scrutiny was introduced to affiliated club transfers. New rules regarding loans and multi-club ownership are still being finalized by the Premier League, which is meeting with its shareholders in London. Manchester City was part of a coalition of eight clubs that successfully opposed a temporary ban on loans between clubs with the same owners for this January.

Other English club ownerships, such as Todd Boehly's consortium in control of Chelsea and the Saudi Public Investment Fund (PIF) that owns Newcastle United, are also expanding their ownership across multiple clubs. Everton is also the subject of a proposed takeover by 777 Partners, a US group with an extensive multi-club ownership strategy.

In conclusion, Manchester City's signing of Savio is under scrutiny by the Premier League to ensure fair market value and compliance with cost controls. The valuation of the player and the demonstration of fair market value will be crucial in obtaining approval for the deal. The introduction of stricter rules and regulations regarding related-party transactions and multi-club ownership reflects the league's efforts to maintain transparency and fairness in football transfers.