Manchester City triumphs in a significant triumph over the Premier League
Manchester City emerges victorious in a court case against the Premier League. An impartial judicial panel declares that the league's fresh sponsorship regulations, which aim to hinder clubs from boosting their sponsorship deals with firms affiliated with their proprietors, are illegal, based on various English news sources. These regulations, known as Associated Party Transactions (APTs), were implemented in December 2021 following Newcastle United's takeover by a consortium led by the Saudi state fund PIF (Public Investment Fund), and subsequently amended in March 2024 with 12 out of 20 top-flight clubs voting in favor, 6 voting against, and 2 abstaining.
The Premier League had hindered two of Manchester City's sponsorship arrangements, including a significant collaboration with airline Etihad, which the judicial panel has now deemed illegal. City contended that the omission of shareholder loans from APT rules potentially tilted the playing field in favor of specific clubs, resulting in market distortion. The club directed by Pep Guardiola has now declared its intention to recover damages.
Both the league and the club welcomed the panel's decision, as it largely dismissed City's charges. The judges also concluded that the regulations were indispensable to maintain effective financial regulations. However, they will now reassess the two disputed aspects.
The case is unrelated to the Premier League's disciplinary committee, which is currently probing 115 instances of financial fair play violations against City, some dating back to 2009. The essence of the dispute revolves around sponsorship income, connections to business associates, and operational expenses, including suspected covert payouts to coaches and players.
The verdict might hold significant repercussions for other Premier League clubs functioning under similar financial frameworks, such as Arsenal and Brighton & Hove Albion, which have also received loans from their proprietors. The panel ruled that loans from shareholders and owners are exempt from APT regulations, thereby implying that the Premier League has no authority to control such transactions.
Manchester City's victory in the court case means they can continue their partnership with Etihad Airways, a major soccer sponsor. The judgment indicated that the Premier League's regulations, specifically those related to Associated Party Transactions (APTs), could not limit soccer sponsorship deals between clubs and their business associates.
