Manchester City secured a partial victory against the Premier League on Monday after an arbitration panel issued a ruling regarding sponsorship agreements, termed Associated Party Transactions (APT), which the club was previously prevented from completing.
The Premier League interpreted the arbitration panel’s 175-page redacted document as support for the overarching aims and governance of the APT system, although the panel did identify that certain aspects of the APT rules contravened British competition law. It noted that these rules were unlawful due to clubs being unable to provide input on the data types considered by the league.
The panel determined that the league’s decisions regarding two transactions involving Manchester City in 2023, specifically with First Abu Dhabi Bank and Etihad Aviation group, were made in a procedurally unfair manner and must be annulled.
The APT regulations were implemented to safeguard the competitiveness of the Premier League by preventing clubs from artificially inflating sponsorship deal values linked to their owners. Following the ruling, City expressed that their claims had been vindicated, highlighting that the Premier League had misused its dominant position.
The club also emphasized that the tribunal found the rules to be fundamentally unfair and specifically biased in their application towards Manchester City. It pointed out that the rules were discriminatory, as they intentionally excluded shareholder loans from consideration.
Conversely, the Premier League remarked that most of City’s challenges were not upheld and that the tribunal recognized the necessity of these rules for effective financial regulation in the league.
Meanwhile, Manchester City is participating in a separate independent hearing regarding alleged breaches of Premier League financial regulations, which commenced in September, with a ruling anticipated before the conclusion of the current season.
Since being acquired by Sheikh Mansour’s Abu Dhabi United Group in 2008, City has clinched eight Premier League titles, the Champions League, three FA Cups, six League Cups, the UEFA Super Cup, and the FIFA Club World Cup.
Following the acquisition of Newcastle United by a Saudi-led consortium in 2021, the Premier League enacted a temporary ban on clubs being sponsored by entities associated with their owners. The rules were revised in March following discussions with Premier League clubs and received approval from the FA.
The panel’s ruling clarified that the APT rules were not designed specifically to target clubs owned by companies from the Gulf region but applied universally to any club utilizing APTs. According to the regulations, each APT must be presented to the Premier League Board for a Fair Market Value Assessment.
Several club representatives, including those from Chelsea, Newcastle United, and Everton, provided testimonies supportive of Manchester City’s claims during the arbitration process. Brighton & Hove Albion was included in the Premier League’s witness list, alongside written statements from clubs like West Ham United and Manchester United. Other clubs, such as Brentford, Bournemouth, Fulham, and Wolverhampton Wanderers, submitted letters backing the APT rules for the arbitration.
City raised concerns that the exclusion of shareholder loans from the APT rules created an uneven playing field that could distort competitive balance, noting that a significant portion of Arsenal’s and Brighton’s financial backing came from shareholders.
In their conclusion, the tribunal argued that excluding shareholder loans from the APT rules permits one type of financial support, a non-commercial loan, while disallowing another, namely non-commercial sponsorship agreements, thus distorting competition.