Rules, damn rules and Crystal Palace

Multi-club ownership is at the heart of the dispute between Crystal Palace and UEFA, and everyone has questions to answer

In a sport, which by definition must contain different entities that compete against each other, having the same people in control of more than one of those entities has to be a bad idea. But this is football, the laboratory of bad ideas, and so we must talk about multi-club ownership (MCO).

There are a host of questions that need answering about Crystal Palace’s demotion from the Europa League and, while I have sympathy for Palace and the club’s fans, some of the questions are aimed at the people in charge at the south London club. I’m assuming a level of knowledge about the case, so I’ll try not to go over ground readers will be familiar with.

The rule that UEFA says has been broken is Article 5 of the regulations of the UEFA Champions League, which was introduced in 2025 to cover all UEFA club competitions for the 2025/26 season. The relevant wording is: “No one 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. No individual or legal entity may have control or influence over more than one club participating in a UEFA club competition.”

Anything that would constitute a conflict of interest under this rule had to be resolved by 1 March 2025. The Palace case boils down to the fact that John Textor was considered by UEFA to have been “involved, either directly or indirectly” in both Crystal Palace and Lyon on and before that date.

To recap the facts, Textor bought a 43% stake in Crystal Palace in 2021 for £90m. Six months later, he bought 90% of Brazilian club Botafogo, along with 80% of Belgian club RWD Molenbeek in the same week. And, almost a year after buying into Palace, he acquired 40% of the shares of French club Lyon.

MCO has been an issue in football since the 1990s, but really gained momentum in the 2010s as the Red Bull group and the City Football Group acquired multiple clubs. Research suggests that over 180 clubs worldwide are now part of MCO groups. By 2022 it would be safe to assume that anyone who knew their way around football would know that having a stake in more than one club might be an issue.

So there are a number of questions that can legitimately be asked of Palace chairman Steve Parish and the club board.

• When did they realise Textor’s involvement might be a problem?

• If Textor’s involvement was not a problem, why did he sell his shares for £190m (realising a £100m profit), in June and in the same month exit from Lyon?

• Why did the Palace board not succeed in hitting the rule deadline of 1 March 2025?

Palace’s case seems to be that Textor, to use Parish’s exact words, “didn’t have decisive influence over the club”. But the rule doesn’t use the word decisive.* Without that word any judgement must surely rest on whether Textor had influence. It is hard to imagine anyone would spend £90m on 43% of something they had no influence on. And those competitors of Palace who did not benefit from the injection of Textor’s 43% could justifiably argue influence was exerted.

Could it be that Palace thought they could get around the rule on MCO? If they did, it can be argued they had good reason.

Because Palace are not the only club where an individual can be said to “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.” At clubs such as Manchester City, Manchester United and, to add spice to this particular tale, Nottingham Forest – the club that has taken Palace’s place in the Europa League – a device called a blind trust has been used to ensure compliance with the rules. And here is where things get really interesting.

Research carried out by investigative football website Josimer (and if you don’t subscribe you really should) not only reveals how blind trusts are being deployed to stop clubs falling foul of MCO rules, but that the device is the brainchild of Sunil Gulati – the chairman of UEFA’s Club Financial Control Body since 2021 and close friend of UEFA president Alexsander Čeferin. In an article headlined Bend it like UEFA, Josimar details the blind trust device, the involvement of Gulati, and how numerous clubs have got around the rules.

As Josimar observes, owners including Evangelos Marinakis at Nottingham Forest and Jim Ratcliffe at Manchester United, as well as executives at City Group, “were smart enough to beat the system at its own game. The door was left ajar – all they did was to push it open.

And, Josimar concludes: “The problem is, however, that it is UEFA which unlocked it. More than that, it had signposted the exit.”

Josimar asked UEFA directly if it had advised clubs on how to circumvent its own rules, exactly what Gulati’s role was, and how its active promotion of blind trusts sat with its commitment to open competition and transparent decision-making. It has received no reply.

An added twist in this case is that Forest appear to have played a significant role in alerting UEFA to the fact that Palace may be in contravention of the rules, thereby helping to secure a decision they directly benefitted from. Forest appear to have anticipated a potential problem and acted upon it sooner than Palace by setting up a blind trust, then writing to UEFA to ask for “clarity” over Palace’s position. While Forest can claim accurately to have done nothing wrong, they have engaged in what most would see as sharp practice.

This is a tale as much about the application of rules as it is about the desirability of those rules, and it features the now familiar twisting and turning of those who claim to be running our sport in its best interests. For a rule-based system to work it needs to have the confidence of those subject to and affected by those rules. This case is a real mess because rules do not appear to be being applied consistently or in the spirit they were intended, and punishment for not being sufficiently smart in circumventing the rules appears to be worse than for not complying with the spirit of them.

The point has been made too, that Palace are not the only club to be punished. While they have been demoted to the UEFA Conference League, Irish side Drogheda United FC and Slovakia’s DAC 1904 Dunajka Streda have been kicked out of that competition altogether for failure to comply with MCO rules – or should that be for not being smart enough to get around them? Are Palace getting more attention because they have a higher profile in a higher profile league? Or because they have a better case?

The whole thing is a mess, and the whole mess wouldn’t exist without MCO. The solution would be to apply a simple common sense test to the question of whether an individual is involved at more than one club, by seeing whether an individual was involved at more than one club – in any capacity. This would, of course, be characterised as ‘preventing investment’, but it would be nothing of the sort. It would be preventing investment by people who had already invested, and leaving the way clear for other investors who wanted a slice of the world’s most popular sport. UEFA needs to make its position on MCO clear, and act consistently once it does.

There are some challenging questions for fans here too. While fan organisations such as the FSA in England and Wales and European body Football Supporters Europe have stated opposition to the MCO model, and spent a lot of time flagging the problems it can bring, many fans are seemingly prepared to put up with it as long as it benefits their club.

In the research quoted above, the benefits of MCO are listed as hedging exposure, compounding assets, diversifying risk, increasing global talent arbitrage and increasing exit flexibility. You’ll never, as they say, sing that. Here’s yet another example of where the business has forgotten what makes the sport so special. The thing that stands out about the Palace case is that few of the characters in the story come out well.

* As someone has pointed out in the comments, and I’ve acknowledged, the word ‘decisive’ appears in a later, seperate, clause of the rule. Poorly-drafted rules are nothing new in football. This does raise the question of whether someone needs to come under the definition of both parts of the rule or either in order for the rules to have been broken.

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In the last edition I wrote about the growing tension between regular matchgoing fans and TV companies. September’s TV picks have been announced, and on one weekend two games have been moved from Saturday to Sunday for live TV coverage, but subject to late change should the teams be involved in European games that mean they can’t play on Sunday. In which case, the games will be on the original Saturday, where they could have been left in the first place. They are not even pretending to care any more.

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Finally, I have to mark the week in which the Football Governance Act passed into law. It’s the culmination of years of hard work and campaigning, and will establish an Independent Regulator for Football. It is a great opportunity.

Inevitably, those who have always opposed the establishment of the IRF will continue to snipe, and the track record of the powers within the game suggests they will do as much as they can to stymie and frustrate the regulator’s work. But a more sustainable game, better ownership requirements, and improved fan engagement are prizes worth having, and so work will continue.

Also inevitable is that fact that many ordinary fans will ask what has really changed. The regulator needs some early wins to build confidence in it, and a number or areas on the fan engagement front present opportunity. But if, in five years time, we haven’t had another Bury or Southend or Morecambe or … well, that will be the measure of the achievement.

Photo by Bruno Kelzer on Unsplash