Manchester City has achieved a significant partial victory in its legal dispute with the Premier League regarding the Associated Party Transaction (APT) regulations. The independent tribunal found that the APT rules, which were introduced to ensure fair market value in commercial transactions between clubs and their associated parties, violate UK competition law and procedural fairness. This ruling is a major setback for the Premier League's financial oversight framework.
The tribunal's decision, published on October 7, 2024, upheld Manchester City's claims that the APT rules were structurally unfair and discriminatory. Specifically, the rules were criticized for excluding shareholder loans, which are often used by clubs to inject money without incurring interest. This exclusion was deemed discriminatory by the tribunal.
The Premier League's APT rules were designed to prevent clubs from inflating sponsorship deals with companies linked to their owners. However, Manchester City argued that these rules unfairly blocked their proposed sponsorship deals with Etihad Aviation Group and First Abu Dhabi Bank. The tribunal agreed with City's assertion, ruling that these deals were unfairly blocked.
In a statement, Manchester City Football Club welcomed the tribunal's findings and thanked the Arbitral Tribunal for their work. The club emphasized that it had succeeded in proving the APT rules were unlawful and that the Premier League's decisions on two specific sponsorship transactions were set aside.
The Premier League, however, maintained that the tribunal upheld the overall objectives, framework, and decision-making of the APT system. They acknowledged that a small number of discrete elements of the rules do not comply with competition and public law requirements but emphasized that these issues can be quickly remedied.
This legal challenge is part of a broader context where Manchester City is facing 115 charges for alleged breaches of Premier League rules. The outcome of this case could have significant implications for the financial regulations of the Premier League and potentially influence future legal challenges from other clubs.
The tribunal's ruling has been seen as a significant victory for Manchester City, undermining the Premier League's financial rules and setting a precedent for future legal challenges. It remains to be seen how this decision will impact ongoing cases involving other clubs and whether it will lead to changes in the APT regulations.
