In a significant legal development, Manchester City has initiated a new legal challenge against the Premier League concerning recent amendments to the Associated Party Transaction (APT) rules.
This move follows the Premier League’s decision to modify the APT regulations in November, a change that was approved by a majority vote of 16 out of 20 clubs. Manchester City had previously attempted to prevent these amendments but faced defeat in that effort.
The crux of Manchester City’s challenge lies in the assertion that the recent amendments should be considered “void” following an initial tribunal ruling. The club argues that these changes could potentially distort competition and affect trade within the UK. A central issue in this dispute is the Premier League’s rejection of a substantial sponsorship deal between Manchester City and Etihad Airways, which was deemed not to reflect fair market value. Manchester City contends that sponsors should have the discretion to determine the value of deals, emphasizing that there may be valid reasons for sponsors to pay above the typical market rate.
Rival clubs have expressed concerns that if Manchester City succeeds in its legal action, it could lead to the removal of constraints on sponsorship deals. This potential outcome raises fears about the future competitiveness of the Premier League, as it could significantly alter the financial landscape of the league. An executive from a rival club described this possibility as an “existential threat” to the Premier League’s success, highlighting concerns that it could diminish the league’s competitiveness, which is considered a unique selling point.
Adding to the complexity, a judgment on Manchester City’s alleged 115 breaches of Premier League rules is anticipated in the coming weeks. While this case is separate from the APT dispute, it underscores the club’s readiness to explore all legal avenues to challenge unfavorable judgments. The Premier League’s legal expenses have already seen a significant increase, with last season’s legal bill reaching £48 million, a substantial portion of which was related to actions involving Manchester City. The latest developments suggest that these costs could escalate further in the current season.
This ongoing legal battle highlights the tensions between Manchester City and the Premier League, with potential implications for the governance and financial regulations within English football.
