Q&A: Why Premier League gave Chelsea’s Paramount Plus sponsorship the red card
Chelsea’s hunt for a new main shirt sponsor hit the news this week when it emerged that the Premier League had refused to sanction a potential deal with Paramount Plus.
Here’s why the agreement was not allowed, why this situation isn’t unique to Chelsea or the top division of English football, and what it means for the club’s search for a new sponsor.
Why was Chelsea’s Paramount Plus deal blocked?
The first thing to make clear is that the Premier League did not have a decision to make – such agreements are simply prohibited by their rules.
All clubs in the division sign up to a Deed of Licence, which covers a range of matters relating to broadcasters and media.
This contract is confidential so the exact wording is not known, but Premier League sources confirmed that Chelsea’s proposed deal with Paramount Plus was always going to infringe it.
For context, it’s worth remembering that the Premier League’s chief source of income is the sale of its media rights to domestic and overseas broadcasters, so it is logical that there would be some protections for those important rights holders.
“The Premier League is a company limited by shares as each club is a shareholder and bound by the rules,” says Stephen Taylor Heath, head of sports law at JMW Solicitors.
“A further layer might be what is being referred to as the ‘Deed of Licence’ between the Premier League and the clubs and this is ultimately a legally binding agreement and a licence which sets out the legal basis on which one party’s legal rights may be utilised by another party.
“It is anticipated the broadcaster deals will contain extensive provisions designed to preserve the integrity of the rights acquired including restrictions on ‘ambush marketing’ and the exposure of any competitor.
“I would anticipate that Premier League clubs will be obliged to collectively adhere to that contract as if they were each a party to it.”
Has this situation arisen before?
While it is not known to what degree other clubs might have explored similar deals, the fact that none has another media company as their shirt sponsor tells its own story.
And similar rules apply elsewhere, says Taylor Heath. “This framework is not unique to the Premier League as broadcast partners of several sporting events will impose restrictions on the sporting governing bodies and event organisers with regards to exposure of other broadcasters.”
So what now for Chelsea’s sponsor search?
Blues chiefs have been searching for a new front-of-shirt sponsor since mobile network Three decided not to renew its £40m-a-year deal, which expired at the end of the season, and their task has not been made easier by the team’s failure to qualify for European competition, robbing it of valuable international exposure, next term.
Having failed to land the Paramount Plus deal, Chelsea is now in talks with online cryptocurrency casino Stake.com. The company appeared on the front of Everton’s shirts last season and has previously partnered with Watford.
But it has caused controversy due to the collective pledge from Premier League clubs to phase out gambling sponsors by 2026, and the Chelsea Supporters’ Trust has voiced its opposition to the mooted deal.