Man City's legal win over the Premier League played down as 'minor' claim made
Manchester City won a statement battle against the Premier League as they argued over APT rules but a tweak to the rules around sponsorship will see the system change
by John Cross · The MirrorPremier League clubs will only have to overcome a “relatively minor issue” in their legal battle with Manchester City.
The 20 top-flight teams will hold a crunch summit next week in the escalating civil war with City after the current champions won a legal ruling on Associated Party Transaction (APT) rules. But top lawyer Simon Leaf, Mishcon de Reya’s head of sports law, believes City have only “won on penalties after extra time.”
The Premier League are confident they can tighten and update their rules but the whole system is due to undergo a major overhaul by next summer anyway. City have written to the other 19 top-flight clubs accusing the Premier League of “misleading” its clubs over the outcome of its legal dispute over sponsorship deals.
Leaf said: “It’s hard to argue that Manchester City haven’t won. Maybe you’d say they’ve won on penalties after extra time, because quite conceivably the Premier League can point to a lot of the points in this decision that support the development of its rules, and the rules themselves.
“It is a relatively minor issue that has been picked up by this panel, which is undoubtedly embarrassing but by no means the end of the world for the Premier League.”
City have claimed a victory on two key issues in challenging the APT rules around inflated commercial deals and shareholder loans. Arsenal, Chelsea and Brighton are three clubs who have taken loans from their owners.
Clubs may have to prove that the loans were offered at a fair market value. But the Premier League are confident that even if interest was paid, the amount would not be big enough to break Profit and Sustainability Rules. City are concerned at the Premier League's wish to pass through revised APT rules within the next 10 days, which would take into account shareholder loans, which are currently excluded under the current rulings.
But the Premier League are not expecting a vote on the revised rules next week and the meeting is to discuss the whole matter in general moving forward.
Clubs also believe they may be able to convert loans into equity while the Premier League are in the process of updating PSR with Squad Cost Controls already running in tandem. The Premier League also saw the APT verdict as a victory because it upheld the vast majority of their rules.
They believe City used all their legal might to throw everything at the APT rules and all but two stood up to examination. Therefore, the Premier League believe the rules will not take much re-examination while they also rejected City’s accusations that their statement and own communications to clubs was “misleading.”
Leaf said: “My understanding is that Man City were seeking to challenge the rules as a whole, and ultimately, one suspects that what a more decisive victory would have looked like from their perspective would have been the rules being completely scrapped.
“Where we’ve ended up is that actually we’re likely to see a broader set of rules (to include shareholder loans). The panel has said the rules didn’t go far enough and now need to be expanded to cover this particular part of financing. This is one of the main areas where the Premier League was successful – the panel did quite conclusively say that having these types of (APT) rules in place is lawful.
“It shouldn’t change the value of these deals, but it maybe makes it slightly easier for the clubs to try to challenge a Premier League finding that a deal was not undertaken at fair market value, because clubs will now effectively see the Premier League’s ‘working-out’ at an earlier stage in the process.”
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