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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