Manchester City has accused the Premier League of providing a "misleading" summary of the outcome in their legal battle over rules on commercial deals. The club sent a letter, seen by the BBC, to other top-flight teams and the league itself, claiming that its report contains "several inaccuracies."
The letter, written by City’s general counsel Simon Cliff, was sent on Monday. City and the Premier League claim victory after an arbitration panel’s decision was published. The case involved City challenging the Premier League’s associated party transaction (APT) rules. The tribunal found two aspects of these rules to be unlawful, which City claims as a win.
City, owned by the Abu Dhabi-backed City Football Group, argued their legal challenge "succeeded." However, the Premier League stated that most of City’s challenges were dismissed and insisted the tribunal supported the APT system's overall framework.
APT rules are designed to ensure sponsorship deals with companies linked to club owners reflect fair market value. City and the Premier League declined to comment further, though a senior Premier League source told BBC Sport that the league stands by its summary.
A consultation with the clubs is ongoing, with a meeting scheduled for next Thursday to discuss the aftermath. No vote will be taken at that time. This case is separate from another Premier League disciplinary commission set to review 115 charges against City for alleged breaches of financial regulations dating back to 2009, which City denies.
Details of the Letter
In the letter, Cliff offered clarifications, arguing that the league's summary, prepared by chief executive Richard Masters, was misleading. He stated that the tribunal found the APT rules unlawful, and therefore, in City’s view, the rules are entirely void.
Cliff refuted the league's claim that the tribunal endorsed the rules or considered them necessary for financial controls. The Premier League’s summary indicated that only a few specific elements of the rules did not comply with competition and public law but could be fixed quickly. Cliff disagreed, saying that even if City didn’t win every point in its challenge, proving the rules are unlawful for any reason is sufficient.
He also objected to the Premier League’s plan to amend the APT rules within ten days, warning of potential legal consequences and the need for clubs to carefully consider the situation rather than rushing decisions.
The Premier League intends to update the rules soon to align with competition law. The tribunal, in its 175-page decision, stated that low-interest loans from owners should not be excluded from APT rules, and some recent amendments must be revised. However, Cliff argued that it is premature for the Premier League to involve clubs in amending the rules when their status is still uncertain.
He added that rushing through changes without proper reflection could lead to further legal proceedings and costs. He stressed the importance of building trust between member clubs and the regulator.
This letter signals an escalation in the ongoing dispute between Manchester City and the Premier League. It shows that the conflict may continue, despite the Premier League’s confidence in its ability to update the APT rules to comply with competition law. Cliff’s warning about the potential for further legal action could concern clubs worried about mounting legal costs.
The tribunal ruled that the current exclusion of shareholder loans from the APT rules is unlawful, prompting the Premier League to propose changes. However, City’s legal team argues that it would be unfair to apply these rules to past sponsorship deals while exempting previous shareholder loans. They might even seek an injunction to prevent such amendments.
The letter has sparked speculation that City may seek compensation for losses they claim to have suffered under the rules. Despite City’s tone, the Premier League remains confident of gaining enough club support to pass the necessary rule changes. The league has become accustomed to City’s challenges over financial regulations.
Some Premier League members may worry that weakening the APT rules could allow rival clubs to boost revenues unfairly. There are also concerns about how this case might influence the ongoing arbitration over City’s alleged financial breaches.
The APT verdict has highlighted growing divisions among Premier League clubs and the challenges the league faces in enforcing its financial rules.
