The recent arbitration ruling between Manchester City and the Premier League regarding associated party transaction (APT) rules has shaken the landscape of English football. This case is one of two highly anticipated decisions that will impact not only the club and the league but English football as a whole. The dispute centers on the Premier League’s regulations concerning financial transactions between clubs and entities linked to their owners, such as Manchester City’s relationships with companies like the Etihad Aviation Group.
The controversy arose when the Premier League tightened its rules on these transactions in February 2023. Manchester City challenged the new regulations, arguing that they imposed a “tyranny of the majority” by requiring a two-thirds majority vote for decisions. While most of the club’s objections were dismissed, they secured wins on two key points: the evaluation of shareholder loans and the lack of transparency in the assessment of certain sponsorships.
City’s first victory focused on shareholder loans, which, according to Premier League rules, did not require fair market value assessments like sponsorship deals. City argued that this was anti-competitive, as not all clubs have access to favorable loan terms. The arbitration panel sided with Manchester City, a decision that could affect other Premier League clubs that have been financed through preferential loans from their owners.
REEVALUATION OF TWO CITY SPONSORSHIPS
In practical terms, this ruling doesn’t make a significant difference for Manchester City but could compel other Premier League clubs to reassess their financial practices. Moreover, the decision reinforces City’s criticism of the Premier League as a regulatory body, showing that some rules and procedures were not properly enforced. Two major City sponsorship deals, with Etihad and First Abu Dhabi Bank, were nullified and will need to be reevaluated.
While the ruling granted Manchester City some victories, the tribunal largely upheld the legitimacy of the Premier League’s rules. City’s claims about the lack of transparency and distortion of competition were rejected, allowing the league to maintain most of its regulatory framework intact. Despite City’s limited successes, the Premier League successfully defended the core principles of its governance model.
Following this ruling, both sides are claiming victory, albeit for different reasons. Manchester City highlighted the irregularities in the league’s procedures, which could influence future cases, while the Premier League demonstrated that its fundamental rules remain robust. As these issues are resolved, one thing is clear: the legal battle between the two parties is far from over.
