Manchester City has secured a major legal victory against the Premier League, with a tribunal ruling that the league’s Associated Party Transaction (APT) rules – which were in effect from December 2021 to November 2024 – are “void and unenforceable”.
This decision could have significant implications for the club and the league, though it remains separate from the 115 charges leveled against Manchester City for alleged financial breaches between 2009 and 2018.
The APT rules were initially introduced to ensure that commercial deals between clubs and companies linked to their owners were at fair market value, especially after the Saudi Arabia Public Investment Fund’s takeover of Newcastle United in 2021. Manchester City immediately retaliated by challenging these rules after the Premier League blocked proposed deals with Etihad Airways and First Abu Dhabi Bank.
A key point of contention was the treatment of shareholder loans under the APT rules. The tribunal sided with Manchester City, determining that the APT regulations were entirely unlawful. This landmark ruling opens the door for clubs to potentially file compensation claims for deals rejected or reduced in value under the previous APT system.
Now, in a verdict which underlines City’s position and which may have serious ramifications for the Premier League, the panel, featuring legal experts Christopher Vajda KC, Lord Dyson and Sir Nigel Teare, has returned its final verdict, ruling that the APT regulations were unlawful in their entirety.
That means that any deals that were rejected or reduced in value under the system, which operated between December 2021 and November 2024, could now be subject to hefty compensation claims.
Put simply, if a club believes its competitive performance was harmed by a decision made under the previous APT system, it could sue the Premier League.
City have also launched a legal challenge against the amended rules voted through in November. The same panel is due to rule on their legality in the near future. Should they deem those unlawful, the league could be thrown into chaos.
The outcome of this challenge could further influence the financial landscape for clubs like Manchester City and Newcastle, potentially allowing them to secure more lucrative sponsorship agreements with affiliated companies.
The recent legal victory is separate from the 115 charges Manchester City faces for alleged breaches of financial rules between 2009 and 2018. While the APT ruling addresses the validity of specific sponsorship regulations, the 115 charges concern broader financial conduct over a longer period.
However, it is important to note that while this recent legal victory does not directly impact the proceedings related to the 115 charges, this latest favorable outcome for City in their challenge against the amended APT rules could indirectly strengthen their position.
With the tribunal ruling that the amended rules are also unlawful, this could lend heavy support to City’s argument that the Premier League’s regulatory approach is flawed.
As it stands, the final verdict on the 115 charges remains outstanding.