Manchester City pursue legal action against Premier League’s “unlawful” ‘Associated Party Transaction’ rules

As revealed by Matt Lawton of The Times, Manchester City have launched legal action against the Premier League’s ‘Associated Party Transaction’ (APT) rules.

City are seeking damages from the league as well as an the abolishment of the rules, which Lawton states the Manchester club believe are “unlawful”, restrictive, and anti-competitive.

Their claim, which is believed to have been filed in February following a majority of Premier League clubs voting to strengthen said rules, is set to be settled after a two-week private arbitration hearing that will begin on Monday June 10.

The ATP rules were brought in following the takeover of Newcastle United by Saudi-backed PIF in December 2021, and are designed to prevent clubs from inflating the revenue receieved from commercial deals that are linked with companies,that are linked to the clubs’ owners – this can also include deals with a another football team under the same ownership of the club.

In turn, the hope is that these rules would maintain the competitiveness of the division. The rules state all commercial transactions will be independently assessed to ensure they are of “fair market value” (FMV). If they are deemed not to be of FMV, Premier League clubs could face possible sanctions, as was agreed by clubs in February’s vote.

However, in an 165-page legal document, The Citizens are said to have argued that the Premier League’s voting system – which requires 14 of the 20 clubs to agree to a rule change – provide the majority with too much control, and have led to the APT rules only being approved to stifle City’s success on the pitch. Meanwhile, they also claim that they are victims of “discrimination against Gulf ownership” by the league.

City’s claim is said to have split the league’s clubs, with a reported 10 to 12 stepping forward to partake in the legal action in defence of the Premier League.

The belief is that, if the City are successful in their pursuit, the lack of an independent assessment of deals could free up the richest clubs to significantly enhance the revenues generated from commercial transactions, and thus the amount they can spend on their playing squad and infrastructure; Consequently, giving clubs with the wealthiest owners unfair competitive advantage.

Meanwhile, clubs also skeptical over the positive impact a successful claim could have on the result of the champions’ hearing with the league over an alleged 115 breaches of its regulations and financial rules. Of these 115, many are linked to allegations that sponsorship deals may have been subsided by companies linked to their Abu Dhabi-led owners.

City, recently won their fourth straight Premier League title and who’s record revenues of €826m for the 2022/23 season was the second-highest in Europe, deny all wrongdoing related to the 115 charges.

Finally, whether successful or not, the outcome of City’s claim, which has already split the Premier league’s clubs, and will substantially impact the future of England’s top flight, its competitiveness, and how much its teams are able to generate, and thus spend.

Travis Levison | Get Football

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