Premier League Champions Challenge League’s Associated Party Transaction Rules in Arbitration Hearing

Premier League Champions Challenge League’s Associated Party Transaction Rules

In a bold move that could have far-reaching implications for the future of the Premier League, the reigning champions are challenging the league’s associated party transaction (APT) rules in a high-stakes hearing set to last until June 21.

Manchester City is reportedly challenging the validity of the rules under UK competition law, seeking to scrap the regulations that were first introduced in December 2021 following the Saudi-led takeover of Newcastle and were recently strengthened in February.

The APT rules are designed to ensure that any commercial deals or player transfers between a club and entities with links to that club’s ownership are conducted at fair market value, preventing club revenues from being artificially inflated. If the rules are declared invalid by an arbitration panel, clubs could potentially have more freedom to engage in commercial deals without independent oversight on fair market value.

This could lead to clubs boosting their declared revenue and having more flexibility in transfer and wage spending under financial sustainability rules. There are concerns that clubs with wealthy owners, such as City and Newcastle, could gain an unfair advantage in terms of spending.

City’s lawyers have claimed that the club has been discriminated against and subjected to a “tyranny of the majority” due to these rules, raising fears of a governance crisis for the Premier League if the rules are successfully challenged.

Several clubs have reportedly offered support to the Premier League’s defense of the rules, while one club has submitted a witness statement in support of City. It remains unclear how this challenge could impact the separate matter of the 115 charges brought against City for alleged breaches of the league’s financial rules, with a hearing expected to begin in the autumn.

The outcome of the arbitration process is not required to be made public under the Premier League’s rules, but given the potential implications, it is likely to become known once the ruling is issued.

Both Manchester City and the Premier League have remained tight-lipped on the matter, leaving fans and stakeholders eagerly awaiting the outcome of this legal battle that could reshape the landscape of English football.