Manchester City has emerged victorious in a legal battle against the Premier League regarding financial regulations. However, there are differing opinions on the significance of the ruling from both sides.
In a case initiated by Manchester City, an independent panel has reportedly declared the Associated Party Transaction (APT) rules to be null and unenforceable, according to Sky News.
The APT rules were introduced in December 2021 following the Saudi takeover of Newcastle to ensure that commercial agreements involving companies connected to club ownership were conducted at fair market values. These rules were also aimed at regulating the revenue generated by City, backed by Abu Dhabi, from sponsorships with state entities.
Manchester City filed the legal challenge after facing obstacles from the Premier League in pursuing more lucrative deals with Etihad Airways and First Abu Dhabi Bank.
The reigning Premier League champions are under the ownership of UAE vice president Sheikh Mansour.
An arbitration panel recently found fault with the Premier League’s regulatory capabilities in creating rules, following an initial ruling in October. In response, the league revised three areas of the rules deemed illegal, and these revisions were approved by a majority of clubs in November.
One significant change is that the fair market value of shareholder loans must now be considered in evaluating the financial sustainability of clubs, determining the legitimacy of their income.
The Premier League also ensured that clubs would have access to a database of comparable sponsorship values to assess their agreements.
Manchester City have won a legal challenge against the Premier League’s financial rules. Pic: Reuters
Richard Masters, the Premier League’s chief executive, believes that the new rules have replaced the ones invalidated by the tribunal, downplaying the impact of the recent ruling. The Premier League stated, «The tribunal’s decision has invalidated the previous APT rules as a whole, but the new APT rules, approved by clubs in November 2024, remain in effect.»
The Premier League maintains that the new APT rules are valid and enforceable, seeking a swift resolution on the matter. However, Manchester City is challenging the legality of the new rules aimed at preventing affluent clubs from inflating deals to increase spending on players and comply with Profit and Sustainability rules.
Under the Profit and Sustainability rules, clubs can only incur losses of £105m over three years, a regulation that will persist into the next season despite legal challenges impeding new regulations.
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Manchester City manager Pep Guardiola. Pic: PA
Manchester City is pinning its hopes on a favorable ruling from a panel for the third time, arguing that the rules amended by the Premier League in November should never have been in place. This legal battle precedes a significant verdict expected soon on more than 100 alleged breaches of financial regulations dating back to 2009.