The Premier League insists the “majority” of Manchester City’s legal challenge to its rules on commercial deals has failed as the champions declared victory in the case.
City launched a legal action against the league’s associated party transaction (APT) rules earlier this year on the grounds they were anti-competitive.
City issued a statement on Monday afternoon announcing the rules had been found to be unlawful by an arbitration panel and that the league had abused a dominant position. The club say they can now seek damages arising from the case.
However, the Premier League said there were just two findings in City’s favour on the rules and that City were “unsuccessful in the majority of (their) challenge”.
Crucially, the league said the tribunal had determined the APT rules were necessary and pursued a legitimate objective.
Club statement
— Manchester City (@ManCity) October 7, 2024
The APT rules are designed to ensure commercial deals with entities linked to a club’s owners are done for fair market value.
A judgment determining all APT rules as unlawful would have had huge ramifications for competition within the Premier League and made it easier for clubs with the wealthiest owners to strike deals linked to their ownership, and in the process benefit from higher revenues, strengthening their position in regard to the league’s profitability and sustainability rules (PSR).
However, the Premier League’s position is that while the panel ruling will require some amendments to the rules, it does not call for them to be ripped up, which would in effect give clubs free rein over commercial deals.
Both parties released the 175-page judgment on Monday afternoon, but came to very different conclusions about what it meant.
The panel did find it was anti-competitive to exclude shareholder loans from APT rules and also called for changes to the rules which were adopted earlier this year to be amended.
However, the Premier League said the tribunal had supported the legitimacy of the rules, and said it had found them essential to make the profitability and sustainability regulations (PSR) effective.
The Premier League said the panel had agreed with it that if a transaction is evidently not at fair market value, that would distort competition within the league.
The league also said the panel had rejected City’s argument that the purpose of the rules was to discriminate against clubs with ownership from the Gulf region.
City said the panel had set aside decisions by the league related to two transactions involving City, on the basis that they were procedurally unfair.
The club have also suggested they could look to seek damages based on the panel’s ruling, and that other clubs may look to do the same.
The Premier League concluded its release by saying that beyond the two findings the panel highlighted, its rulebook had been found compliant with competition and public law standards.
Manchester City v The Premier League Today we have finally been able to read the written reasons in the MCFC v PL arbitration about the legality of the PL’s Associated Party Transaction Rules (‘APT’) and their application. As is often the case with lawyers, both sides have…
— Nick De Marco KC (@nickdemarco_) October 7, 2024
Leading sports lawyer Nick De Marco KC posted on X: “As is often the case with lawyers, both sides have declared victory. The truth is somewhere in between, with each side winning on different issues.”
He added, however, that parts of the league’s APT rules being declared unlawful was “significant”.
The panel’s conclusions were set out in paragraphs 592 to 602 of the 175-page document.
The first of those refers to City’s challenge to the APT rules as first adopted and the rules as amended earlier this year. It found the exclusion of shareholder loans unlawful but stated “all other challenges fail”.
On City’s claim that the rules were procedurally unfair, it found it was unfair that City were not allowed to comment on the comparable transaction data relied upon by the Premier League before it makes decisions on fair market value, but that “all other challenges fail”.
PA understands the Premier League has called a meeting of its clubs for next week to discuss the panel ruling. It is understood the league has told the impact of any change to the rules to include shareholder loans will be minimal in reality.
This case is completely separate to the 115 charges laid against City by the Premier League for alleged breaches of its financial rules. City deny any wrongdoing, and a hearing in that case is ongoing.
