Manchester City, the embattled champions of English soccer’s top-tier Premier League (EPL), are preparing themselves for a second legal attack on the EPL’s associated party transaction rules (APT).
City – who are waiting on a verdict on 130 charges brought against them by the EPL for allegedly breaking financial rules – have written to the league requesting arbitration against the new set of APT rules which were agreed by clubs in late November last year.
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Those new rules had themselves been introduced as a result of previous legal claims brought by City. In the ensuing initial arbitration, elements of the original APT rules were found to be unlawful.
APTs, financial and commercial moves made by clubs that involve a party already associated with the club’s ownership, are regulated by the league to prevent the over-inflation of deal values for financial purposes and to maintain a competitive balance in the league.
The changes in the rules specifically refer to clubs receiving loans from shareholders, which must now be submitted as APTs for scrutiny at a fair market value (FMV) assessment conducted by the Premier League board. If a loan is not assessed to be at FMV it will either be required to be altered to suit FMV, or terminated entirely.
However, when voting to bring in the new rules, City were one of four clubs from the 20-team EPL to vote against – alongside Aston Villa, Newcastle, and Nottingham Forest. Chelsea, meanwhile, abstained.
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By GlobalDataManchester City’s primary sponsor is Etihad, the airline flag carrier of the UAE. The club is majority-owned by Abu Dhabi United Group, a private equity group from the emirate, headed by UAE vice president and royal family member Sheikh Mansour bin Zayed.
This second legal challenge was confirmed by Richard Masters, chief executive at the Premier League, in a letter to clubs late last week.
Masters is cited as saying: "On 20 January 2025, Manchester City FC began a further arbitration to challenge the APT rules. As you will see, the new challenge relates to the amendments to the APT rules that clubs approved at the 22 November 2024 shareholders’ meeting.”
He added: “The Premier League remains strongly of the view that the amendments passed in November were lawful and the APT rules comply with all competition law requirements. We consider that the new arbitration must be resolved as soon as possible and, to that end, have agreed that the same tribunal should be appointed to hear the new case. The parties are currently corresponding in relation to further directions.
“The APT rules remain in full force and effect and clubs remain required to comply with all aspects of the system.”
Before the vote to bring in the second set of APT rules, Aston Villa wrote a letter to the other 19 clubs, warning of the threat of further legal action if they passed.
In that letter, the Birmingham club said: “It is now abundantly clear that any vote (if passed) will result in immediate further litigation by Manchester City and an associated defense by the EPL, incurring material further costs and unnecessary distraction and devotion of time to this issue.”
City currently sit fifth in the 2024-25 EPL, 15 points behind leaders Liverpool.
The 130 charges against City were issued in February 2023, with some of the alleged breaches relating to income secured by City reported as being from various Abu Dhabi-linked sponsors.
