Mark Kleinman: Football watchdog search approaches injury time
Mark Kleinman is Sky News’ City Editor and the man who gets the Square Mile talking in his weekly City PM column. Today, he tackles the football watchdog search, big pay at GSK and CityFibre’s M&A warchest
Football watchdog search approaches final whistle
They think it’s all over. To paraphrase the immortal line of Kenneth Wolstenholme, the 1966 World Cup Final commentator, the government’s search for the inaugural chair of the new Independent Football Regulator (IFR), is nearing a conclusion.
An initial recruitment process was stalled by Rishi Sunak’s poorly judged decision to call last summer’s general election, although I suspect the shortlisted names now are likely to have been in the mix last time around too.
The role is a crucial one, with huge ramifications for the sport and its financial liberty in the coming years. Whether it should be being established at all is debatable in the context of Labour’s wider push to roll back economic regulation – which I’ve reported recently will include scrapping some watchdogs altogether.
The more notable of the chair candidates to have emerged so far is Christian Purslow, the former Aston Villa and Liverpool FC chief executive, who has been out of the game since leaving Villa Park in 2023.
An outspoken and opinionated figure, Purslow would inevitably divide opinion between Premier League and EFL factions, although it’s worth remembering that part of his stint at Villa was while they were languishing in the second tier.
“He would be welcomed by the football community as someone who has worked in football and not a civil servant or politician,” one senior football figure told me last week. This, it’s fair to say, is not a unanimous view.
Also on the list is Sanjay Bhandari, a former EY partner and fraud lawyer who now serves as chair of the Kick It Out anti-racism charity and on the board of the Lawn Tennis Association.
The third candidate, I am told by sources, is a woman, possibly a member of the House of Lords but at any rate someone with substantive experience of dealing with parliamentary select committees.
Whoever Lisa Nandy, the culture secretary, picks, they need to get on with it – English football’s internecine warfare is deepening by the month.
GSK’s pay medicine may be too much for investors
Now that is punchy. Even by the standards of boundary-pushing UK company boards, GSK’s decision to hand Dame Emma Walmsley, a potential pay package of more than £21.5m as part of a new remuneration policy is likely to test investors’ tolerance levels.
To secure the maximum payout, Walmsley would need to oversee a 50 per cent rise in its share price – or add something in the region of £30bn to its market capitalisation. Give its anaemic performance over one-, three- and five-year periods, such stellar performance would appear unlikely. To be fair to GSK’s board, that’s the point of stretching targets: to incentivise executive outperformance for the wider benefit of shareholders.
In practice, the increase in the CEO’s long-term bonus opportunity from 600 per cent to 800 per cent of salary reflects a wider trend among FTSE-100 companies to seek to align their bosses’ pay packages more closely with those of US peers.
“The proposed changes to our executive remuneration policy further strengthen the link between management and shareholder interests, with higher rewards contingent on industry-leading R&D progress and shareholder returns,” a GSK spokesperson said. “In particular, the proposed changes strongly incentivise pipeline progress and the delivery of high-value opportunities like we have in Respiratory, Immunology & Inflammation and Oncology.”
To date, many of the London-listed companies which have put big pay rises to shareholders have been confronted with little dissent. There does not, though, appear to be universal permission for such hikes; a number of blue-chip companies are quietly having to reframe their pay proposals after being confronted by an unexpected degree of pushback from investors
GSK might also find that its next medicine should be for a bloody nose – to be administered by shareholders.
Altnet giant CityFibre dials up M&A warchest
As far as Britain’s altnets are concerned, it’s the elephant in the room. CityFibre Holdings, the largest independent challenger to BT’s Openreach arm, has, like much of the industry begun to confront the twin financial squeezes of rising costs and the struggle to win customers.
It received a major boost last year when it struck a crucial broadband deal with my employer, Sky, but its balance sheet was in need of further repair. Last week, it emerged that CityFibre’s lenders had opted to hire bankers from Lazard to advise on a refinancing following a warning from the company that its existing funding was expected to run out by the middle of the year. I understand that FTI Consulting is also working for the lenders on the technical aspects of the refi.
As I reported late last week, CityFibre’s shareholders – which include an arm of Goldman Sachs and Mubadala, the Abu Dhabi sovereign wealth fund – are now in talks to inject as much as £500m of new equity in order to secure the lenders’ backing for a comprehensive reset of its balance sheet.
Importantly, this will provide CityFibre with the firepower to spearhead further consolidation in the sector, with a number of smaller altnets said to be firmly in its crosshairs. The number of smaller rival players in the industry is about to shrink – fast.