Skip to main content

City sue Premier League

Manchester City’s legal case against the Premier League’s associated party transaction (APT) rules will begin on Monday, June 10.  City are suing the league in an attempt to have the rules — which they claim are unlawful — abolished in a two-week private arbitration hearing.

The regulations are in place to guard against clubs using sponsorship deals with companies linked to their owners to inflate revenue streams and allow more room for spending.  In February, Premier League clubs voted to toughen rules on associated party transactions.

City now argue that they are the victims of “discrimination” in a 165-page legal document justifying their case. City are also arguing the league’s democratic system of requiring at least 14 clubs, or two-thirds of those who vote, to implement rule changes should be abolished to guard against decisions being made by “the tyranny of the majority”.

It is arguable that many Premier League rules are not compatible with compeition law, specifically the 1998 Act.

If City are successful in their claim — and some rival clubs fear they will be — it could enable the richest clubs to value their sponsorship deals without independent assessment, vastly boosting the amount of money they can raise and therefore giving them far greater sums to spend on players.

While The Times knows of at least one club who have submitted a witness statement in support of City for next week’s arbitration hearing, sources believe more than half have sided with the Premier League. 

Their rivals believe that what City are doing will actually destroy the competitiveness of the world’s most popular league, allowing clubs with super-rich owners to spend unlimited amounts of money on their playing squads and infrastructure and nullify Financial Fair Play rules.

Millions are being spent on legal fees to fight this case. One senior club source says the Premier League’s legal bill has more than quadrupled in the past year, from about £5million to more than £20million. They also point to the fact that since February the Premier League’s own legal department has been forced to shift its focus to this claim when it is also trying to prepare for the hearing into City’s 115 charges. 

City also complain that, when it comes to negotiating any form of sponsorship agreement, clubs in the north are at a disadvantage to those in London, who, they say, can charge higher ticket prices. However, rival clubs estimate that, based on median ticket prices at the Etihad Stadium and the seven Premier League clubs in London, City are ranked third.

City blame the Premier League for not regulating spending when clubs such as Manchester United were more dominant, arguing they have been prevented from monetising their brand in the way United did. City also say the rules penalise clubs who have “lower-profile sporting histories”.


Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day ...
Post a Comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
Post a Comment
Read more