Manchester City have kicked off a fresh legal battle against the Premier League’s sponsorship rules, and the stakes could not be higher.
Moreover, the club is determined to challenge recent amendments to the associated party transaction (APT) regulations. In fact, this move marks the latest escalation in a fierce legal war that has already seen an arbitration panel deem parts of the previous rules unlawful.
Notably, City are not standing down after their earlier victory. Their legal team, led by Lord Pannick KC and supported by legal counsel Simon Cliff, is now pushing for an arbitration hearing over the newly amended APT rules. Furthermore, the club insists that these rushed changes will continue to undermine fair play and transparency in financial dealings.
In addition, City have raised serious concerns about the way shareholder loans are treated. Previously, these loans from parties with stakes in clubs were not subject to fair market valuations, a point the arbitration panel criticized. Consequently, the original decision exposed the inherent inequality in the system and set the stage for this renewed legal action.
Moreover, the new rules exempt existing shareholder loans from such valuations. As a result, clubs can avoid paying retrospective fees that run into the millions. In turn, this loophole not only disrupts financial fairness but also benefits several of City’s rivals, including Arsenal and Liverpool, who have enjoyed significant advantages from this practice.
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Importantly, Manchester City argue that the rules remain discriminatory and unjust. They contend that while only the interest rate on shareholder loans undergoes a fair market value assessment, clubs secure the full loan value without proper scrutiny. Therefore, City maintain that this arrangement violates principles of financial integrity and competitive balance.
Meanwhile, the Premier League has defended its stance with robust statements. Chief Executive Richard Masters informed clubs about City’s new challenge and reiterated that the amendments passed in November comply with competition law. Additionally, he stressed the need to resolve the arbitration quickly by appointing the same tribunal for the new case.
Furthermore, the amendments were approved by a decisive 16-4 vote in November. Clubs such as Aston Villa, Nottingham Forest, and Newcastle United supported the changes, even though Villa warned that any vote would trigger further litigation by Manchester City. In this context, every decision carries weight, and the controversy shows no signs of abating.
In conclusion, both Manchester City and the Premier League now await further clarification from the original tribunal panel. The outcome of this arbitration will determine whether the entire APT system should be scrapped or reformed. Consequently, all eyes are now on the upcoming Premier League shareholder meeting, where the next chapter of this legal saga will undoubtedly be set in motion.
