Manchester City is reportedly taking legal action against the Premier League, according to The Times. The club is challenging the Premier League’s Associated Party Transaction (ATP) rules, which govern commercial and sponsorship deals involving companies linked to the club’s owners. These rules require that such transactions be independently assessed to ensure they represent fair market value.
City believes these rules are “unlawful” and is seeking damages for revenue they claim to have lost due to these regulations. The Times’ Matt Lawton has cited a 165-page legal document in which City argues that they are victims of “discrimination.” The ATP rules were implemented in December 2021, coinciding with the Saudi Arabian Public Investment Fund’s acquisition of Newcastle United.
The legal dispute is set to be resolved in a two-week arbitration hearing starting Monday, June 10. Sky Sports News has reached out to both the Premier League and Manchester City for comments.
Associated Party Transaction Rules Explained
The Premier League’s ATP rules require that any dealings a club has with associated parties—defined as companies or individuals with a significant interest in the club—must be reviewed by the Premier League board. The board assesses whether these transactions reflect fair market value. This rule aims to ensure fairness across the league by preventing clubs from inflating their commercial revenues through deals with entities linked to their ownership.
Potential Ramifications
Sky Sports News chief reporter Kaveh Solhekol explains that the legal action by Manchester City is unprecedented. City will argue at the arbitration hearing that some of the Premier League’s financial rules, specifically the ATP rules, are unlawful and violate UK competition law. If City succeeds, it could significantly impact the future competitive balance of the Premier League.
Connection to Man City’s Existing Charges
This legal action is separate from the 115 charges the Premier League brought against Manchester City in February 2023. These charges allege that City breached financial fair play rules over a nine-year period from 2009 to 2018, including failing to fully disclose financial remunerations to a manager and non-compliance with UEFA’s financial fair play rules. The hearing for these charges is scheduled for November, and City denies all allegations.
Solhekol notes that while the charges and the current legal action are distinct, a win for City in the upcoming arbitration could weaken the Premier League’s case in November. If City successfully argues that some financial rules are unlawful, it could undermine the Premier League’s charges related to sponsorship deals involving companies connected to City’s owners.
Credit: Sky Sports
