Following Newcastle United’s Saudi-led takeover in 2021, the Premier League proposed rules on APTs as they aimed to prevent clubs like the Magpies and Man City from signing inflated sponsorship deals to avoid a financial breach.
Any deal deemed inflated was denied, with the Citizens taking legal action after sponsorship deals with Etihad Airways and First Abu Dhabi Bank were blocked.
Man City – who are fifth in the top flight – challenged the rules in court, stating that they were unfair and unlawful.
A report in February from the Daily Mail‘s Mike Keegan revealed that Pep Guardiola‘s side have been vindicated after a tribunal declared the regulations entirely void, with clubs who have been blocked deals potentially able to sue the Premier League.
Indeed, the result could spark a ‘crisis’ with the league potentially ‘thrown into chaos’.
It was said that the ‘bombshell verdict’ has the potential to ‘trigger a series of giant compensation claims and plunge the competition into crisis’, with an independent panel siding with the champions – whose case was led by Paul Harris KC and Lord Pannick KC of Freshfields.
The rules, which ran from December 2021 to November 2024, have been declared ‘unlawful in their entirety and were always ‘null and void’.
It was a ‘significant’ defeat for the Premier League as three elements were deemed unlawful. One was ‘the fact that shareholder loans were not subject to the same fair market value tests included in the APT rules’.
And now Matt Lawton in The Times has claimed that Man City ‘have accused the Premier League of distorting the competition in favour of Arsenal and other rival clubs who have benefited from huge loans from their owners’.
Man City ‘have issued an excoriating attack on the league’s attempt to amend sponsorship rules declared unlawful and void by an independent tribunal’ with the defending Premier League champions arguing ‘that Arsenal, as well as Brighton & Hove Albion, Everton and Leicester City, have had an unfair advantage’.
The Times adds:
‘City claim that shareholder loans — where the owners lend clubs money — worth hundreds of millions of pounds at those four clubs have not been treated the same as other Associated Party Transactions (APTs), such as sponsorship deals with companies linked to club owners.
‘However, the tribunal — comprising three senior legal figures in Sir Nigel Teare, Lord Dyson and Christopher Vajda KC — concluded those APT rules were “void and unenforceable” and City now argue that there needs to be a return to the pre-2021 rules until these matters are fully resolved. They argue in their latest claim, which the Premier League sent, over the past 24 hours, to its 19 other clubs, that the amended rules continue to “discriminate”.
‘City argue that they “fail to meet the requirements of transparency, objectivity, precision and proportionality … and are liable to distort competition”.
‘Key to City’s claim is the argument that the Premier League’s attempt to change the APT rules after its latest legal defeat is unfair because they treat the shareholder loans differently, adding that the clubs who utilise that form of borrowing are benefiting from an unlawful exemption.’
In a ‘broader point’, The Times continues by saying Man City insist the Premier League ‘should not change rules that have already been declared void, and was too hasty and slapdash in its response to the previous verdict.’
Man City highlight the huge shareholder loans, running into the hundreds of millions, that other clubs have benefitted from, giving them ‘an unfair advantage’ as Premier League sides battle with the profit and sustainability rules.
‘City say that the ‘differential treatment’ means the rule changes “do not eliminate, but on the contrary perpetuate the discriminatory and distortive treatment previously found by the tribunal”. The club add: “This continued preferential and discriminatory treatment of shareholder loans has the object and/or effect of distorting economic competition between member clubs on affected markets.”‘
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