Manchester City’s APT Ruling: How It Could Change Everything

EPL Index

·8 octobre 2024

Manchester City’s APT Ruling: How It Could Change Everything

Manchester City vs Premier League: APT Ruling and What It Means

Manchester City’s legal battle with the Premier League over Associated Party Transactions (APT) has taken another turn, with a ruling that offers victories to both sides. This latest arbitration decision could have a lasting impact on the financial regulations governing English football.

Background of the Case

In June 2024, Manchester City took the Premier League to arbitration, arguing that the current APT rules were unfair and anti-competitive. These rules, which govern the financial relationships between clubs and their associated entities, limit Manchester City’s ability to strike lucrative sponsorship deals.

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The crux of City’s argument lies in the assertion that these APT rules, especially after being tightened following Newcastle United’s takeover by Saudi Arabia’s Public Investment Fund (PIF), put them at a competitive disadvantage. City’s legal team claimed that the restrictions amounted to “discrimination” and labelled them as a “tyranny of the majority,” believing the rules were designed to curb their financial power.

Major Outcomes of the Verdict

After months of deliberation, the three-person arbitration panel delivered its ruling in late September. Both Manchester City and the Premier League claimed victory, but the verdict is nuanced.

Key Wins for Manchester City

City successfully challenged three elements of the Premier League’s APT regulations:

Benchmarking Process: The arbitration panel ruled that the Premier League’s current method for assessing sponsorship deals was procedurally unfair. Previously, City were denied access to the data used to evaluate whether their sponsorships met fair market value. This lack of transparency was found to be unlawful, meaning the Premier League must now offer clubs like City more insight into how their deals are evaluated.
Delays in Decision-Making: The panel agreed that the Premier League failed to meet its own timelines when processing certain City sponsorship deals. Although the delays didn’t directly cause City financial harm, they were still deemed unlawful.
Shareholder Loans: Perhaps the most significant outcome for City is the ruling that interest-free shareholder loans should be subject to APT regulations. City argued that these loans, used by several other Premier League clubs, provided an unfair advantage. The panel agreed, requiring a rule change that could impact several clubs, including Arsenal and Everton, who have previously benefited from such loans.

Photo: IMAGO

Wins for the Premier League

However, City’s broader attempt to dismantle the APT system was unsuccessful. The panel upheld the necessity of APT laws, rejecting City’s argument that these rules were anti-competitive. The Premier League can take solace in the fact that the fundamental principles of the APT regulations remain intact, preserving their ability to regulate financial relationships in football.

What This Means for the Future

The biggest immediate impact of this ruling will be the likely integration of shareholder loans into APT regulations. Clubs that have relied on these loans to remain financially compliant will need to reassess their spending, as the wiggle room previously available will be reduced.

For Manchester City, this ruling may have set a precedent that could help in future legal disputes, particularly their ongoing case regarding 115 charges related to breaches of financial rules. However, it is unlikely that this ruling will have a direct influence on that case, which is expected to drag on for several more months.