Man City Basks in Court Victory Amidst Premier League Triumph
Manchester City clinches legal triumph against the Premier League. An impartial tribunal consisting of retired judges declares that the league's new sponsorship regulations, intended to deter clubs from boosting their sponsorship deals with firms related to their owners through manipulative methods, are illegal.
England's reigning football champions, Manchester City, have secured their first legal victory against the Premier League. According to various English media sources, an independent tribunal has ruled that the league's recently implemented sponsorship regulations are illegal. These regulations target clubs' efforts to artificially inflate their sponsorship deals with companies closely associated with their proprietors.
Adopted in December 2021 following Newcastle United's takeover by a Saudi-backed consortium, and revised in March 2024, the regulations pertaining to Related Party Transactions (RPTs) received the backing of 12 top-tier clubs, opposition from 6, and abstentions from 2.
The league had previously blocked two of City's sponsorship deals, including a substantial partnership with airline Etihad, now deemed unlawful by the tribunal. City had argued that the omission of shareholder loans from RPT regulations could provide an advantage to certain clubs and distort the market. The Pep Guardiola-led club has now announced its intention to claim damages.
Both parties welcomed the tribunal's ruling, as it largely disregarded City's objections. The judges also acknowledged that the regulations are crucial to maintaining financial controls' effectiveness, but they will now scrutinize the two disputed aspects.
This case does not involve the Premier League's disciplinary commission, which is currently investigating 115 suspected breaches of financial regulations by City, some dating back to 2009. The primary allegations concern sponsorship income, relationships with business partners, and operational expenses, including undisclosed payments to coaches and players.
The tribunal's decision may bring about significant consequences for other Premier League clubs operating under similar financial arrangements, such as Arsenal and Brighton & Hove Albion, who have also obtained loans from their proprietors. The ruling established that shareholder and proprietor loans are not subject to RPT regulations, meaning the Premier League lacks authority to regulate such transactions.
Manchester City's legal triumph against the Premier League has significant implications for the football club. The ruling exempts shareholder and proprietor loans from the league's related party transactions regulations, potentially benefiting other clubs like Arsenal and Brighton & Hove Albion.
Following the tribunal's decision, Manchester City is planning to seek damages from the Premier League, further highlighting the club's determination to challenge the league's regulations.
