Man City’s Legal Challenge to APT Rules
City challenged the league’s associated party transaction (APT) rules, which assess whether deals between clubs and entities linked to their ownership represent fair market value, on competition law grounds earlier this year.
Since a takeover from Sheikh Mansour bin Zayed Al Nahyan, vice president of the United Arab Emirates, in 2008, City has become the dominant force in English football.
However, their rivals have questioned the legitimacy of major sponsorship contracts from companies with links to Abu Dhabi.
The APT case was unrelated to the 115 Premier League charges that City faces for historical breaches of the competition’s financial regulations.
An arbitration panel found aspects of the previous APT rules unlawful, sparking a disagreement between the City and the league over the appropriate next steps.
The English top flight said in its summary that City was “unsuccessful in the majority of (their) challenge” and that the tribunal considering the case had determined the APT rules were necessary and pursued a legitimate objective.
But City, in their statement, said the tribunal had declared the league had abused a dominant position under competition law.
The major change to the rules is to include shareholder loans as APTs and apply a fair market interest rate.
The city had support for a postponement from Aston Villa, whose owner Nassef Sawiris told the Daily Telegraph earlier this week that a delay was needed to achieve unanimity on the rules.
Nottingham Forest and Saudi-backed Newcastle also voted against the rule change, which passed with a 16-4 majority in favor of the other Premier League clubs.
“The amendments to the rules address the findings of an arbitration tribunal following a legal challenge by Manchester City to the APT system earlier this year,” the Premier League said in a statement.
“The purpose of the APT rules is to ensure clubs are not able to benefit from commercial deals or reductions in costs that are not at fair market value (FMV) by relationships with associated parties.
“These rules were introduced to provide a robust mechanism to safeguard the financial stability, integrity, and competitive balance of the league.”
The foundations for City’s success were built before stringent rules on APTs and financial sustainability were applied.
By contrast, Newcastle has been frustrated in their attempts to quickly challenge at the top end of the table through major investment since a takeover from the Saudi Public Investment Fund in 2021.
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