Premier League Rules Under Fire as Manchester City Begins Legal Proceedings
The arbitration hearing for the legal dispute between Manchester City and the Premier League, which could have a significant impact on the competition, begins on Monday.
The Premier League winners are disputing the league’s associated party transaction (APT) rules in a hearing that will go until June 21.
The Times, which first revealed details of City’s petition last Tuesday, said the club wanted to abolish the rules, which were initially established in December 2021 following the Saudi-led takeover of Newcastle and were most recently toughened in February.
The laws are intended to ensure that any commercial transaction or player transfer between a club and businesses related to that club’s ownership is performed at fair market value, preventing club earnings from being unduly inflated.
If an arbitration panel judges the APT regulations unlawful, clubs would effectively be free to do any commercial partnerships they wanted, without any independent judgment on whether such transactions were for fair market value.
This might then enable clubs to increase their declared revenue and give them more discretion with transfer and wage spending under financial sustainability guidelines.
Manchester City and Newcastle United’s Point of view on this?
There are concerns that the clubs with the deepest riches, City and Newcastle, will effectively be in a league of their own when it comes to spending.
This has generated concerns about a potential governance crisis for the Premier League if the rule-making process is successfully challenged, which now requires a 14-club majority vote to accept any motion.
The Times claimed that between 10 to 12 clubs had pledged their support in some form or another to the Premier League’s defense of this lawsuit, while one club had submitted a witness statement in support of City.
It is unclear what impact this allegation may have on the separate topic of the Premier League’s 115 charges against City for suspected breaches of the league’s financial regulations.
A hearing in that matter is likely to start in the fall. The City vigorously denies any wrongdoing.
Given what is at risk, it appears unlikely that it will remain secret for long after the arbitration panel issues a verdict.
Neither City nor the Premier League have made any remark on the situation.
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