In a landmark ruling, the Arbitration Panel has handed down its verdict on Manchester City’s challenge to the Premier League’s Associated Party Transaction (APT) rules. While the club claimed victory, the panel’s decision was more nuanced, upholding only two of City’s complaints.
The dispute centered on sponsorship deals between clubs and affiliated companies, such as City’s partnership with Etihad Aviation Group. Manchester City argued that the rules unfairly targeted Gulf-owned teams and were unlawful. However, the panel rejected most of the club’s claims, including its bid to overhaul the APT and Fair Market Value (FMV) systems.
The panel did find in City’s favor on two counts. Firstly, it ruled that the APT rules were unlawful because they excluded shareholder loans from their scope. This means that millions of pounds in interest-free loans provided by wealthy backers to clubs like Everton, Brighton & Hove Albion, Arsenal, and Chelsea will now be taken into account.
Secondly, the panel deemed it unfair that clubs were not given the opportunity to comment on the data used by the Premier League to determine FMV before a decision was made. The panel also criticized the Premier League’s procedure as unfair and too slow.
Despite these concessions, the panel ultimately endorsed the APT system as a whole, rejecting Manchester City’s claims that it was discriminatory and unlawful. The Premier League hailed the decision as a major victory, stating that the APT rules were necessary to ensure financial stability, integrity, and competitive balance in the league.
The ruling has significant implications for clubs with state-backed ownership, such as Newcastle United, as it prevents them from making sponsorship deals at inflated valuations. The Premier League will now reassess the rejected APTs, including those with Etihad and First Abu Dhabi Bank, using revised guidelines.
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