The Premier League’s rules on commercial deals – prior to their amendment last November – have been declared “void and unenforceable” by an arbitration panel after a challenge by Manchester City.
The four-time champions sued the league over its associated party transaction (APT) rules last year with a panel declaring three aspects of them unlawful last October.
The APT rules seek to ensure deals done between clubs and entities linked to their owners are for fair market value.
The Premier League felt the October ruling required only discrete elements of the APT rules to be amended, which clubs duly voted to do a month later.
Club statement
— Manchester City (@ManCity) October 7, 2024
City’s position in October was that the whole set of rules was void and that no “knee-jerk” changes should be made. Both sides sought clarification of the ruling from the original panel.
In its concluding remarks the panel stated: “The three respects in which the APT rules and amended APT rules were unlawful cannot be severed with the result that the APT rules as a whole are void and unenforceable.”
The panel’s reference to amended rules refers to changes made in February last year.
City have now also separately challenged November’s amended rules, which is being heard by the same arbitration panel.
On that, the panel said: “However, there remains for decision (in the fresh arbitration commenced on January 2025) whether the November 2024 amended APT rules are valid and effective.”
Clearly, in light of Friday’s news, that decision is crucial for how commercial deals are governed in the future.
Manchester City declined to comment.
The Premier League said in a statement: “The tribunal’s decision has found that the three narrow aspects of the old APT rules, previously found to be unlawful, cannot be separated from the rest of the previous rules as a matter of law. The result, the tribunal has determined, is that the previous APT rules, as a whole, are unenforceable.
“However, the previous APT rules are no longer in place, as clubs voted new APT rules into force in November 2024. This decision expressly does not impact the valid operation of the new rules.
“The tribunal has made no findings as to the validity and effectiveness of the new rules. The tribunal states that whether its decision has any benefit to the club, therefore, depends on whether the new APT rules are found to be lawful as part of the second challenge issued by the club last month.
“The league continues to believe that the new APT rules are valid and enforceable and is pressing for an expeditious resolution of this matter.”
The key amendments made to the league rules in November were the inclusion of shareholder loans, the introduction of the right for clubs to access databank information – used by the Premier League board to make a fair market assessment – at an earlier stage and the rolling back of the February 2024 amendments.
Fighting City’s challenge to the rules has come at significant cost to the Premier League and its clubs, with the legal bill for the APT case alone likely to be in the tens of millions of pounds.
Uncertainty around the APT challenge was understood to be a factor in Premier League clubs deciding not to adopt new financial rules at a meeting on Thursday.
Instead, clubs will be governed by the existing profitability and sustainability rules (PSR) next season.
An outcome is also awaited in another, arguably much more significant, legal battle between City and the Premier League.
In February 2023 the league charged City with more than 100 alleged breaches of its financial rules and with failing to co-operate with an investigation, all of which the club strenuously deny.
The case was heard by an arbitrational panel between September and December last year.
