S Poddar
Manchester City has been handed a major court win in its long-standing battle with the Premier League after a tribunal declared that the initial rules on associated party transactions (APTs) from 2021-2024 are “void and unenforceable.” The ruling not only gives City its way but also further throws into doubt the league’s rulebook, especially following the recent postponement of squad cost control rules.
The ruling by the tribunal comes despite a previous decision that found three of the most significant elements of the APT rules to be illegal. These regulations, effective between December 2021 and November 2024, aimed at tracking club financial transactions involving bodies connected to their owners. Due to the complexities involved, both Manchester City and the Premier League requested further clarification on how these illegal factors would affect the larger picture.
That was made clear, and the tribunal ruled that the said unlawful aspects cannot be disassociated with the entire scheme of the APT guidelines. Therefore, the whole package of regulations has been made unenforceable. The decision may open the door for clubs whose sponsorship or monetary arrangements were being held up under these rules to claim money from the league.
In spite of this defeat, the Premier League has since implemented a new version of the APT rules. These new rules, which are now in place, were intended to deal with the issues raised by the tribunal. Manchester City has already challenged these new rules too, though, and the same tribunal is set to decide on their legality in the next few weeks.
Should the new APT rules also prove to be unenforceable, it would set off a serious crisis within the governance system of the league. This judicial unrest occurs when the Premier League is already confronted with other substantial challenges, such as the long-awaited ruling on the 130 disciplinary charges levied against Manchester City. Also, talks of the creation of an independent English football regulator are underway in parliament.
The Premier League is resolute in its position that the newly adopted APT rules are legally valid and enforceable. In a Friday statement, the league reaffirmed its faith in the new rules, asserting its determination to end the issue at the earliest opportunity.
“The league remains of the view that the new APT rules are effective and enforceable and is insisting on a speedy resolution of this issue,” the statement said. “The new APT rules are in operation and clubs are still obliged to adhere to all parts of the system, including to report shareholder loans to the Premier League for fair market value consideration.”
This courtroom showdown illustrates the continued friction between Manchester City and the Premier League over financial regulations. The APT rules were originally put into place as a way to provide fair play so that clubs with deep-pocketed owners would not be able to sign inflated sponsorship agreements with companies affiliated with their ownership syndicates. But these rules have long been criticized, including by Manchester City, for being unfairly biased against certain clubs and creating an unlevel playing field.
Manchester City’s lawyers have repeatedly taken issue with the league’s attitude, claiming the APT structure was intended to restrict the club’s financial mobility more than guarantee financial fair play for all. With this new ruling, City’s case receives significant credibility, possibly prompting other clubs to examine the Premier League’s regulatory decisions more forcefully.
The potential financial cost to the league could be substantial. If clubs whose sponsorship agreements were rejected under the nullified rules opt to claim compensation, the league could face major financial burdens. Furthermore, this decision could undermine the authority of the Premier League in enforcing financial rules going forward, as clubs can potentially be encouraged to challenge rules that they view as restrictive or unjust.
In addition to the immediate legal implications, the case also continues the larger debates regarding the regulation of English football. The drive for a free-standing football regulator has gathered pace in recent times, with those in support believing that it must be an external body in order to provide the financial fairness and regulatory discipline needed. The Premier League’s failures to establish and enforce coherent financial regulations serve only to enhance the case for a free-standing entity to fulfill such a purpose.
For Manchester City, this decision is another milestone in its long-standing fight against regulatory control that it sees as discriminatory. The club has frequently been at the center of financial scandals, such as the highly publicized investigation into its financial affairs, which resulted in UEFA’s now-reversed two-year European competition ban in 2020.
As the tribunal sets out to decide on the validity of the new APT rules, everyone waits with bated breath for the Premier League’s response. In case the new rules are invalidated as well, the league will have to resort to a wholesale reorganization of its financial governance systems. Such an event has the potential to redefine the means of enforcing financial regulations in English football, thereby changing the complexion of the competition in the sport.
No matter what happens in the legal process in the next few weeks, this much is certain: Manchester City’s win in this case has rocked the Premier League’s financial regulation to its core. While the club’s appeal against the new APT rules is still pending, the uncertainty regarding financial regulations in English football is very much alive.
