Man City claim legal victory over Premier League in sponsorship case

Manchester City have are claiming victory over the Premier League as the top flight’s sponsorship rules were declared “unlawful”.

The reigning champions are expected to pursue damages from the Premier League for blocking two massive Abu Dhabi-linked commercial deals earlier this year from Etihad and First Abu Dhabi Bank.

This may well lead to an overhaul of the division’s regulations around associated party transactions (APTs) and could have significant implications for its financial health and future.

And while it is a victory for City which could undermine the Premier League’s authority in their ongoing case regarding 115 breaches of Profitability and Sustainability Rules (PSR), it poses a threat to other clubs.

For Pep Guardiola’s side, it will allow them to sign more lucrative deals with parties related to their ownership, boosting their overall revenue and further protecting them against PSR.

But the regulations were deemed unlawful as they did not include interest-free loans from shareholders to clubs, which make up £1.5bn of £4bn worth of loans across the league, including £250m of Arsenal’s borrowings.

These loans are not regulated within APT rules like City’s sponsorship deals from companies linked to or directly controlled by their owners. And because there is no test for fair market value (FMV), they could feasibly be unfairly disproportionate.

This could lead to these shareholder loans having commercial rates imposed on them, which are governed by PSR.

It could mean Arsenal, among a host of other clubs, are at risk of points deductions.

City called on representatives from Chelsea, Newcastle and Everton to support their claim, all clubs which appear to have supported the case against a league of which they are shareholders.

Arsenal, Manchester United, Liverpool, West Ham, Brentford, Bournemouth, Fulham and Wolves gave evidence in favour of the Premier League

The APT rules were initially introduced in December 2021 after Saudi Arabia’s Public Investment Fund (PIF) bought Newcastle and both the original and current rules were found to be “procedurally unfair”.

In a lengthy statement, the Premier League said the APT system would remain in place after “taking into account the findings made by the tribunal”.

It “welcomed” the three-person panel’s findings, “which endorsed the overall objectives, framework and decision-making of the APT system.

“The tribunal did, however, identify a small number of discrete elements of the rules which do not, in their current form, comply with competition and public law requirements. These elements can quickly and effectively be remedied by the league and clubs.”



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