Bruised Premier League calls emergency meeting as City claim victory after landmark ruling

Manchester City and the Premier Legaue have both claimed victory. Credit: PA

While the Premier League and Manchester City are both claiming victory in a landmark legal judgement released today, it is likely the current champions will be sleeping more easily tonight.

Also, on a seismic day, some of City’s title rivals will be deeply concerned about the ramifications of the case, after a panel found that sections of the League’s Associated Party Transaction (APT) rules were unlawful.

Those ramifications will be discussed at an emergency meeting of all 20 Premier League clubs next week. The hearing’s conclusions have threatened to spark a financial civil war within English football.

The Premier League’s APT rules are designed to ensure that any sponsorship deal a club does with a company linked to its owners is of ‘Fair Market Value’ (FMV).

In a judgement that will send shivers through the league, the tribunal found that the current APT rules are unlawful under the Competition Act. It based that decision on the grounds that the rules do not incorporate shareholder loans.

These are loans an owner or shareholder may make to a club but because of their close relationship will charge little or no interest.

Manchester City’s lawyers argued successfully that these loans should be part of the APT system.

It's currently estimated that combined, Premier League clubs enjoy £1.5 billion of these favourable loans which currently sit outside the Profit and Sustainability Rules (PSR).

These are the regulations that Everton and Nottingham Forest fell foul of and led them to being docked points.

It’s thought that if all clubs had to apply the generally accepted level of interest payments, several of them would struggle to meet PSR requirements.

The tribunal also ruled that the APT rules were unlawful because they were "procedurally unfair."

Specifically, the panel found in favour of Manchester City because the club was not allowed to make representations about the data the Premier League used to assess FMV.

The Etihad stadium, Manchester City's home ground. Credit: PA

This applied to two large sponsorship deals, from associated parties, that City were barred from accepting.

The tribunal signalled that it would potentially consider losses incurred by City in due course.

The dominant force in English football said today the ruling showed the League had "abused its dominant position".

While all the above feels like a dark day for the Premier League and its leadership, they are also claiming a ‘win.’

Mainly it seems because the panel upheld the need for the APT system, and rejected the majority of Manchester City’s challenges.

In a statement, the Premier League said it welcomed the tribunal’s findings “which endorsed the overall objectives, framework and decision-making of the APT system.”

The panel’s exact wording was "The APT Rules are designed precisely to ensure that competition is not distorted between clubs that use Associated Parties and those that do not”.

A victory of sorts, however, the Premier League did accept the tribunal identified a "small number of discrete elements" that didn’t comply with competition law.

“These elements” the statement went on “can be quickly and effectively remedied by the League and clubs.”

Elements that will be front and centre of what is likely to be a tense meeting of all clubs next week.

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