Manchester City win watershed case against Premier League over sponsorship rules

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Manchester City win legal case against Premier League over sponsorship rules

Manchester City have landed an early blow in what is set to be a long and arduous series of legal proceedings over the coming months as they have won a case against the Premier League over their rules around sponsorship and related party transactions.

The current English champions, who have won a record four Premier League titles in a row, launched legal action against the division back in June after claiming that their restrictions around Associated Party Transactions (APT) rules and sponsorships were unfair and unlawful.

Now, as it turns out, an independent panel of three retired judges ultimately concluded that the rules were unlawful and, at least in part, contrary to the Competition Act 1998.

The details of the case are obviously numerous and complex but, in short, it has been found that Man City were unfairly blocked from moving forward with two huge sponsorship deals earlier this year.

Although the outcome has been somewhat debated by the league itself, it was decided that the imposed regulations were unfair and “discriminatory in how they operate, because they deliberately excluded shareholder loans.”

Issuing a statement following the decision, the Premier League said they “welcome the Tribunal’s findings, which endorsed the overall objectives, framework and decision-making of the APT system”, adding that it also “upheld the need for the APT system as a whole and rejected the majority of City’s challenges” while reiterating that the rules are necessary for their “financial controls to be effective”. 

They went on to add that “the decision represents an important and detailed assessment of the APT Rules, which ensure clubs are not able to benefit from commercial deals or reductions in costs that are not at Fair Market Value (FMV) by virtue of relationships with Associated Parties.”

Meanwhile, the City Football Group responded to the news in a series of bullet points, insisting that the “Premier League was found to have abused its dominant position, […] had reached the decisions in a procedurally unfair manner” and that they will now have to “restate the fair market value of two transactions entered into by the Club.”

Safe to say people have noted quite a distinct difference in tone when it comes to statements from the two parties regarding associated parties and their transactions with clubs but, nevertheless, it’s a victory for the Manc club could have a huge knock-on effect regarding how much teams can spend in the future.

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The Premier League have also reassured that two particular aspects of the existing rules that didn’t fully comply with the Competition Act will be rectified promptly and will be “conducting a process that can allow the league and clubs to enact those specific changes quickly and effectively”.

Not only does this mean that CFG is likely to restart conversations with the two blocked parties – one being the Etihad Group and another with a bank based in Abu Dhabi – but that other clubs could now potentially look into further lucrative sponsorship deals, although ‘fair market value’ will still be assessed.

You can read page 164 of the document which summarises the full Tribunal HERE.

Meanwhile, the still outstanding case against Man City over their 115 charges regarding FFP breaches has now begun, though a decision is still a ways off.

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Featured Images — The Manc Group/Premier League