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The reigning Premier League champions won a legal dispute against the league body after a landmark ruling
Manchester City have secured a significant legal victory against the Premier League, marking a pivotal moment in the ongoing battle surrounding financial regulations and club sponsorships.
A panel of retired judges ruled that some of the league's sponsorship rules, particularly those related to Associated Party Transactions (APT), were unlawful in a decision that is seen as a major blow to the Premier League.
The APT Regulation: What Is It?
The Associated Party Transactions (APT) regulation was introduced by the Premier League as a means of ensuring that clubs do not artificially inflate their sponsorship revenues through deals with companies closely linked to their ownership.
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This rule was intended to maintain fair competition, especially in the wake of mega takeovers like the Saudi-led acquisition of Newcastle United.
Under the APT guidelines, deals involving associated parties such as sponsors or companies with close ties to a club's owners had to be approved by the Premier League to ensure that the financial figures represented "Fair Market Value" (FMV).
Manchester City, whose owners have long-established links with sponsors such as Etihad Airways and various Abu Dhabi-based enterprises, found themselves under scrutiny in 2023 when the Premier League blocked two of City’s potential sponsorship deals, citing concerns over their compliance with APT rules.
City, however, contested the decision, claiming that the rules unfairly targeted them and amounted to financial micromanagement that hindered their growth.
Manchester City's legal victory set to change Premier League regulations
Manchester City’s legal team, led by the experienced Lord Pannick KC, launched a full-scale challenge against the Premier League's decision to block their deals and argued that the APT regulations were not only flawed but also designed to curtail their success.
City felt that the rules allowed other clubs to influence decisions and accused the league of bowing to a "tyranny of the majority" as several of the Cityzens’ rival clubs, including Arsenal, Manchester United, and Liverpool, had supported the Premier League’s position.
In a landmark ruling, the panel of retired judges sided with Manchester City, declaring the APT regulations to be in breach of the Competition Act.
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The judgement pointed out that the Premier League’s handling of City’s sponsorship deals, particularly the ones with Etihad and an Abu Dhabi-based bank, was procedurally unfair, especially as City were not given the opportunity to review the Premier League’s analysis before decisions were made, which further compounded the unfairness of the process.
This ruling is set to reshape how the Premier League manages financial oversight going forward. While the league maintains that the overall objectives of the APT system are sound, they admitted that "discrete elements" of the rules must be revised to comply with competition laws.
Impact of legal victory for Manchester City’s 115 charges
The implications of this ruling stretch far beyond Manchester City as the decision will undoubtedly embolden clubs with wealthy owners, opening the door for more lucrative sponsorship deals without the risk of interference from the Premier League.
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The reigning champion's victory could serve as a precedent for future financial disputes, particularly in cases where associated party sponsorships are at play.
Although City’s triumph in this case is significant, the club remains embroiled in a separate investigation related to 115 alleged breaches of Premier League financial rules.
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These charges include accusations of inflating sponsorship values, providing inaccurate financial reports, and obstructing investigations, and while the current ruling does not directly affect this ongoing case, it is likely to add to the tension between City and the Premier League, as well as further complicating financial governance in English football.
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