Manchester City Challenges Premier League’s Associated Party Transaction Rules in Landmark Hearing
Premier League Champions Challenge Associated Party Transaction Rules in Landmark Hearing
In a groundbreaking development, the Premier League champions, Manchester City, are currently challenging the league’s associated party transaction (APT) rules in a hearing set to last until June 21. It is reported that City will challenge the validity of these rules under UK competition law.
The introduction of associated party transaction rules came in the wake of the Saudi-led takeover of Newcastle in 2021, with the rules designed to ensure that any commercial deals or player transfers between a club and entities linked to the club’s ownership are conducted at fair market value to prevent artificial inflation of club revenues.
If the arbitration panel were to declare the APT rules invalid, clubs would essentially have free rein to conduct commercial deals without independent scrutiny on their fairness. This could potentially lead to clubs boosting their revenue and having more flexibility in their transfer and wage spending, with concerns raised about clubs with wealthy owners like City and Newcastle dominating in terms of spending.
City’s lawyers have argued 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 rule-making process is successfully challenged.
While some clubs have offered support to the Premier League’s defense in this case, it remains to be seen how this challenge could impact the separate matter of the 115 charges brought against City for alleged breaches of the league’s financial rules. City has denied any wrongdoing in that case.
The outcome of the arbitration process is not required to be made public under the Premier League’s rules, but given the significance of the case, it is likely that the ruling will not remain confidential for long. Both City and the Premier League have refrained from commenting on the matter at this time.
