Man City land major legal victory over Premier League which could impact rivals

A tribunal has deemed that the league's Associated Party Transaction (APT) regulations, which ran from December 2021 to November 2024, were unlawful in their entirety.

City saw proposed deals with Etihad Airways and First Abu Dhabi Bank blocked in 2023, leading to a legal battle around what the club deemed to be unlawful APT rules.

In September, a tribunal agreed with City's claim and highlighted three areas that they deemed to be unlawful.

One was the fact that shareholder loans - where parties with stakes in clubs lend money at low or no interest - were not subject to the same fair market value tests included in the APT rules.

This led to a row between the Premier League and City with the top-flight's CEO Richard Masters claiming that a number of tweaks to the rules would be sufficient.

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However City's legal counsel, Simon Cliff, urged clubs not to make hasty amendments to the rules, stating that the whole system - not just certain sections were unlawful.

Speaking on talkSPOR Drive, The Times' journalist Matt Lawton said: "It's bad.

"There's been this legal battle going on since on last June and it's around sponsorship rules and potentially how much Man City could get from a sponsorship deal from an associated party - a company related to them, Etihad Airways or whatever.

"The significant bit is that when this tribunal delivered their first ruling in the autumn the Premier League tried to dress it up as only a minor defeat on only a couple of minor points where as City were saying that the fact they lost on that meant that the whole rule was unlawful and void.

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"They argued over that quite publicly and sections of the media argued on the Premier League's behalf that it was only a setback that was relating to shareholder loans and they pressed ahead with amending these rules.

"City argued, in letters that they sent to all of the clubs, don't amend these rules just yet because we are telling you that the whole lot is void.

"The Premier League pressed ahead with amending their rules, this tribunal met again last month to determine what it meant in a broader sense and contrary to the legal advice that the Premier League got, City were right all along.

"The clubs were having to operate under financial regulations that weren't legally applicable."

Asked if Premier League clubs could now look for compensation if they've been undervalued, Lawton replied: "Potentially.

"To be honest, we haven't had a chance to examine what deals may have been blocked completely or undervalued but every club in the Premier League has been operating under rules that this tribunal say didn't stand up to legal scrutiny.

"The whole thing is a mess, but the big point here is that late last year Richard Masters was telling all of the clubs that this is not a victory for Man City and it shouldn't be interpreted like that, but he was wrong.

"They were wrong. It is a victory for Man City and it is significant.

"The Premier League have changed their rules and where it leaves everybody now is that the same three members of this tribunal will now look at the new rules to see if they're lawful. That's the next step.

"But given that the Premier League only described them as minor tweaks - the rules prior to the minor tweaks have been declared unlawful and so it's quite a precarious position going forward."

Pressed if it will affect Man City regarding their 115 charges for an alleged breach of financial rules, Law added: "It's hard to ascertain.

"This is all about financial regulation and this is a body blow to the Premier League and their administration and the fact of the matter is that it's the same group of lawyers who have fought this particular battle who are leading that one as well.

"There is a degree of separation between the two things but it's all about financial regulation and how the rules are enforced and drawn up.

"It erodes confidence in the Premier League and the way they drew up the rule book."

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Lawton was then asked whether this will open the door to huge sponsorship deals that could bolster the wealthiest clubs such as City and Newcastle.

To which he stated: "You're not going to get a situation where Man City sign a new shirt deal and it's worth £4billion a year, there's still regulation around this stuff."