A landmark verdict has seen Manchester City gain a massive victory in their war with the Premier League, as reported by Mail Sport’s Mike Keegan.
A panel of retired judges ruled that regulations aimed at preventing clubs from inflating deals linked to their owners breach the Competition Act.
It is a ruling that is set to send shockwaves through England’s top flight as the Associated Party Transaction (APT) regulation was deemed ‘unlawful’.
The current champions – who are still facing 115 charges of breaking Premier League financial rules – had taken the league to court earlier this year.
They claimed the APT, brought in after the Saudi-led takeover of Newcastle United and amended in February, were unfair.
But what exactly is the Associated Party Transaction rule? Mail Sport has the breakdown here.
Man City have won their legal challenge against the Premier League’s sponsorship rules
The Premier League champions took legal action against these sanctions that they deemed as a form of ‘discrimination’ in February
What is the Associated Party Transaction regulation?
The Associated Party Transaction regulation was introduced at the end of 2021 before being updated at the start of 2024.
Under this regulation it required any club, its players, manager or any ‘senior official’ to run dealings with ‘associated parties’ past them.
The Premier League’s board would then review each transaction reported to them.
The aim here was to ensure that all deals between the associated parties represent a fair market value.
For clarity, an ‘associated party’ is described as companies or people who have a significant interest in the relevant club, financially or otherwise.
The league says the rule was intended to help build ‘fairness’ across the division by ending a ‘reliance on enhanced commercial revenues linked to the club’s ownership.
What was the ruling in Manchester City’s favour?
The panel ruled that the Premier League was wrong, under ATP rules, to reject a wide-ranging new sponsorship deal Manchester City had lined up with Etihad late in 2023.
City’s previous 10-year deal with the Abu Dhabi-based airline features heavily in the separate case on the 115 charges.
The stopping of another deal with an Abu Dhabi-based bank was also branded procedurally unfair.
A panel of retired judges ruled the Premier League was wrong to reject Manchester City’s deal with Etihad in late 2023
City’s expensively-assembled legal team led by Lord Pannick, the KC spearheading City’s defence against the 115, launched a series of claims against APT rules, many of which centred on the element that deals had to represent what the league deemed Fair Market Value (FMV).
They claimed rules were designed to end their reign of success and were the result of a ‘tyranny of the majority’.
What are the 115 charges Manchester City are facing?
This allows the FFP a ‘true and fair’ view of a club’s revenue which includes sponsorship deals and their operating cost, which involve player salaries.
Every club in the Premier League signs up to a code of compliance, which essentially translates to clubs agreeing to behave themselves and provide the league with accurate and up-to-date accounts that are expected to be audited each year.
Over the past few years City have been accused of inflating the value of their sponsorships which are connected to their owners.
They are also facing 14 charges of failure to provide accurate financial reports for player and manager compensation for those seasons.
The Manchester outfit are also facing 35 charges for failures to comply with Premier League investigations from December 2018 to the present day.
All of City’s 115 charges were first reported by German outlet, Der Spiegel.