Newcastle United's owners, the Saudi Arabian Public Investment Fund (PIF), have been handed a major boost after a decision to lift a temporary ban on related party transactions was lifted.
The controversial takeover of Newcastle by the Saudi PIF worth in excess of £350bn in October was not warmly welcomed by Liverpool and the rest of the Premier League, with 18 of the 20 clubs mobilising to impose a temporary ban on commercial deals involving related parties for fear that Newcastle would ramp up their activity and beyond fair market value for deals thanks to their wealthy business contacts in the Arab nation.
Manchester City, owned by the Abu Dhabi-based City Football Group, who themselves were accused of inflating sponsorship deals to get around the issues of Financial Fair Play (FFP) abstained from the voting when the Premier League member clubs convened.
A temporary ban was put in place while a working group, which included the face of the Newcastle takeover, Amanda Staveley of PCP Capital Partners, with the remit to look at related part transactions, with a new set of rules agreed upon by member clubs on Tuesday.
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The new rules will allow for related party transactions provided that they represent fair market value, and the remuneration of players and staff through business interests related to ownership would have to now be fully disclosed, meaning that they would fall under FFP regulations.
Liverpool owners Fenway Sports Group were one of the clubs to initially seek to impose a temporary ban in the wake of the Newcastle takeover.
The Reds, who haven't had issues with any potential breach of FFP owing to their business focused approach they take with the football club, haven't any related party transactions in their most recent set of accounts, their commercial might having been accrued through their ability to leverage the global appeal of the club to blue chip companies who have been willing to pay handsomely.
On the field Newcastle have major problems. Joint bottom with one win in 16, Eddie Howe's men have the immediate focus of making sure that they are a Premier League club come next season so that the investment from PIF gets a chance to really take root. There is the anticipation that, given they are well beneath a potential FFP rule breach, they can spend heavily if they should choose in January, although the pool of players they would be fishing from might not be as large as they would have hoped for given their precarious situation.
But should Newcastle remain in English football's top tier then the new ruling does provide PIF with a platform to challenge the domination of the so-called 'big six' in years to come. In order to achieve that goal they need commercial revenues to be raised significantly, and being able to strike generous deals, albeit at 'fair market value' means that a whole host of new partners will likely come on board from industries that may not have previously been involved.
In the short term the impact will be minimal. Newcastle will see gains each season and will spend to get themselves up the table and eventually challenging for the lucrative Champions League, which is really the game changer that allows clubs to be in a financial position to challenge the biggest clubs.
It will be a football club built piecemeal, and the inclusion of clubs having to declare payments to players or staff through third parties, something that would come under FFP scrutiny, was likely a required caveat for the other member clubs in allowing a workable solution to be found around related party transactions.
But in the longer term it will raise some concerns from the other Premier League club owners in the top six that Newcastle could be in a position to make a move to challenge their dominance in a few years time, although anything like that happening within five years seems a bit of a stretch.
Liverpool's own approach will be challenged. The Reds are one of only two teams in the past five years to turn an economic profit.
Economic profit and loss is the method used by financial analysts Vysyble when measuring the financial performance of a business and is different to the commonly used metric of EBITDA (earnings before interest, tax, depreciation and amortisation).
The formula for working out economic profit and loss is taking the net operating profit figure and subtracting all of the capital invested into the business. Until a business turns a profit greater than the cost of its capital then it is a business that runs at a loss.
In the past five years, while taking into account the impact of the pandemic, only the Reds and Burnley have been run as profitable businesses using the economic profit model, something that Vysyble believe provides the best indication of business performance.
Liverpool have made an economic profit of £21.5m over the past years, with Burnley at £38m.
Comparing the Reds' figure to that of their closest title rivals in Chelsea and Man City makes for stark reading, with the former having made an economic loss of £345.2m and the latter £403.2m - more than £700m combined - in the past five years.
Newcastle aren't a global pull like Liverpool are, and that is something that requires generational change and doesn't just occur through throwing some money at the first team in the pursuit of success.
But Newcastle will be far more comfortable falling into the economic loss bracket like Manchester City and Chelsea than being a profitable business like Liverpool, the PIF takeover might come under the guise of 'investment' but it is likely that seeing a return on what they will sink into the club through fees, wages and capital injection for infrastructure means that they won't be seeing a return on it.
And not having to operate on a more sustainable basis means that the need for Liverpool to keep on delivering success on the pitch, and being able to leverage that success off it, has never been more important should FSG be able to keep Newcastle and other challengers to the established order of things at bay.
