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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”.


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