Premier League make financial vote decision before imminent meeting amid Man City case verdict

Premier League clubs are set to convene on Tuesday for crucial talks regarding amendments to the top division's financial regulations, following a legal confrontation spearheaded by Manchester City. The summit will see discussions on how to factor in shareholder loans within the league's associated party transaction (APT) rules, which came under scrutiny after an arbitration panel ruled that excluding such loans was in breach of competition law.

This meeting marks the first occasion for the clubs to unite since the panel's decision was disclosed on October 7. City cast the league's reaction to the hearing as "misleading", asserting that the judgement signifies that all APT rules have become invalid. Meanwhile, the four-time consecutive champions put forth their perspective that the verdict invalidated the entire suite of APT regulations.

Despite seeking further insights from the arbitration panel regarding the repercussions of its ruling, the Premier League is pressing ahead with resolving the parts of the legislation deemed illegal. The APT rules aim to assure that commercial agreements between clubs and entities associated with their owners reflect true fair market value, thereby preventing any artificial inflation intended to escalate revenue.

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In anticipation of the meeting, clubs had been instructed to furnish the league by October 10 with details pertaining to their current blend of shareholder loans versus loans converted into equity, tracking back over the past three years. The consensus among clubs is that only new shareholder loans could be evaluated for fair market value, rather than existing ones.

A fair market value assessment might consider the interest rate that would be charged on such a loan in the open market, which could differ from club to club based on their credit score. Importantly, this interest cost would then need to be factored into a club’s calculation under the profitability and sustainability rules (PSR) and could potentially put more clubs at risk of violating those rules.

The PA news agency reports that there will not be a vote on any rule changes at Tuesday’s meeting. The rules must also be amended to allow clubs to access databank information being used as a comparison by the Premier League board while it is making a fair market value assessment so that clubs can make representations based on that data before a decision is made.

The tribunal found it was procedurally unfair not to allow clubs to comment on the data before the league’s board makes a decision. Some amendments to the rules voted through in February are also set to be rewound to the wording prior to that vote.

The proposals to be discussed by clubs on Tuesday have already passed through two league working groups, including the financial controls advisory group (FCAG) which features the City Football Group’s chief financial officer Ingo Bank.