Manchester City has obtained an important legal ruling against the Premier League in a case involving the Associated Party Transactions regulations of the league. An Arbitral Panel of three judges ruled that aspects of the regulations are illegal and contravene the Competition Act.
The regulations were introduced by the league management following the Saudi takeover of Newcastle to avoid situations where rich club owners use companies they have an interest in to arrange inflated sponsorship deals, which in turn increases their teams’ earnings that can then be spent without running foul of the financial fair play rules.
The Premier League has deployed the ATP regulations to block a sponsorship deal Man City were set to seal towards the end of 2023 and another deal with a bank based in Abu Dhabi. With this new ruling, the league management must reinvent its future strategy for carrying out financial governance. Reports indicate that the Premier League is set to call an emergency meeting of its clubs in the coming weeks to chart a course forward.
City, also embroiled in a separate case in which they face 115 charges over non-compliance with Premier League financial regulations, sued the league earlier in the year arguing that the ATP is unfair. The club has welcomed the ruling of the Arbitral Tribunal. A statement by City reads, “Manchester City Football Club thanks the distinguished members of the Arbitral Tribunal for their work and considerations and welcomes their findings.”
The Premier League has also received the ruling, claiming it “endorsed the overall objectives, framework and decision-making of the APT system.” Notwithstanding, it recognized the fundamental position of the ruling over “discrete elements of the rules which do not, in their current form, comply with competition and public law requirements.” It went further to assure that “These elements can quickly and effectively be remedied by the league and clubs.”
While it is unclear what the next course of action would be for City and the league, the club might seek costs and damages.
