Manchester City tribunal verdict: mixed results in APT rule dispute

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By Martin Graham | 8th Oct 2024
The legal case between Manchester City and the Premier League over the league’s regulations on commercial transactions tied to club owners has concluded. In a ruling by a tribunal, City achieved partial success, with two provisions of the Associated Party Transaction (APT) rules being declared unlawful. However, the Premier League stated that the majority of City’s arguments were dismissed, and the tribunal largely upheld the integrity of the APT system.

APT rules govern sponsorship deals between clubs and companies closely associated with their ownership, aiming to prevent inflated sponsorship values. The verdict marks a significant moment, but is not connected to the ongoing Premier League investigation into 115 separate financial charges against Manchester City, some dating back to 2009.

The tribunal, in its 175-page judgement, found that shareholder loans should not be excluded from the APT rules and that certain amendments introduced by the Premier League in February 2024 should be reversed.

Reactions and implications for APT rules
A number of clubs were involved in the arbitration, with Chelsea, Newcastle, and Everton testifying in support of Manchester City. Meanwhile, the Premier League’s case was backed by clubs like Manchester United, Liverpool, Arsenal, Tottenham, and others. Despite the tribunal’s mixed decision, both Manchester City and the Premier League claimed victories.

The Premier League, in its response, emphasized that City’s broader challenge to the APT framework was mostly unsuccessful. It noted that the tribunal had endorsed the rules’ necessity, particularly regarding fair market value assessments, to prevent financial distortion through excessive sponsorship valuations.

In contrast, City focused on the two areas where the tribunal ruled in its favor. They highlighted that the exclusion of shareholder loans from APT scrutiny was deemed discriminatory and that the Premier League’s delays in assessing some of their sponsorship deals were unreasonable. The club argued that these findings amounted to an abuse of the Premier League’s dominant position.

What comes next for the Premier League?
The Premier League is now expected to adjust the two areas that were ruled unlawful. This includes modifying the treatment of shareholder loans and rolling back some of the amendments introduced earlier this year. A meeting is planned to discuss how these changes will be implemented swiftly.

Although the tribunal’s decision highlights flaws in certain areas of the APT rules, legal experts believe the overall ruling supports the Premier League’s broader objectives. Simon Leaf, a lawyer specializing in sports law, noted that while the decision may cause some embarrassment for the league, it ultimately confirms the legality of most of the APT regulations.

The Premier League’s response echoed this, stating that the ruling did not represent a major victory for Manchester City. Both sides, however, will now have to navigate the post-verdict changes, ensuring that the rules are adapted while still maintaining their original intent to regulate fair market transactions fairly across all clubs.

Martin Graham is an MFF sports writer