Clubs will be sent updated rule change proposals by the Premier League following the first full top-flight meeting since the outcome of Manchester City’s legal challenge was made public.
City challenged the league’s associated party transaction (APT) rules on competition law grounds, via arbitration.
The arbitration panel found the rules – which are designed to ensure any deals between clubs and entities linked to their ownership are done for fair market value (FMV) – were unlawful because they excluded shareholder loans.
City said that meant all the APT rules were void, and accused the Premier League of misleading the other 19 clubs in its initial interpretation of the panel judgement.
Club statement
— Manchester City (@ManCity) October 7, 2024
The league is since understood to have sought clarification from the panel over the implications of the judgement, but in the meantime has been canvassing clubs over changing the aspects of the rules found to be unlawful or unfair.
The league, in co-operation with its clubs, is now examining how to include shareholder loans within the APT rules and requested feedback by October 10 from clubs about the shareholder loans they have, or have had in the last three years.
Two Premier League working groups met last Thursday to help further scrutinise proposals for rule amendments which were put to all 20 clubs – including City – at a hybrid meeting lasting around an hour on Tuesday.
Following feedback provided at the meeting, the league will now further update the proposals and recirculate them to clubs. It is understood the feedback was around amendments, rather than any suggestion the proposals be scrapped and taken back to the drawing board.
An FMV assessment of shareholder loans might look at what rate of interest would be charged on such a loan in the open market, which could vary from club to club depending on their credit score.
Crucially, this interest cost would then need to be included within a club’s calculation under the profitability and sustainability rules (PSR), potentially putting more clubs at risk of breaching those rules.
In addition to the inclusion of shareholder loans, the panel also said it was procedurally unfair that City had been unable to comment on comparison data used by the Premier League board before it made a decision on whether a commercial deal was for fair market value, so the new rules are expected to afford clubs that right at an earlier stage.
Some rule amendments made in February this year are also set to be reversed.
