City secure a landmark verdict (Picture: Getty)
Manchester City have claimed a partial victory in their battle with the Premier League after aspects of commercial rules on sponsorship deals were branded ‘unlawful’.
An independent panel found some of the Premier League’s rules regarding commercial deals between clubs and related parties were not satisfactory.
City, who are currently facing 115 charges of breaking Premier League financial rules in a separate case, welcomed the verdict as a victory.
But in a statement of their own, the Premier League also welcomed the tribunal’s findings which they claim ‘endorsed the overall objectives, framework and decision-making of the APT system’.
City made a legal challenge against 25 of the regulations in the Premier League’s rulebook regarding Associated Party Transactions (APTs) which they claimed breached competition law.
The club also saw two large sponsorship deals blocked from completion.
The panel agreed that shareholder loans – where shareholders or ‘associated parties’ lend to or borrow money from the clubs they own – should not be excluded from those rules.
City have won the last four league titles (Picture: Getty)
It was also found two sponsorship deals with First Abu Dhabi Bank and another with Etihad Aviation Group were blocked unfairly as the Premier League did not provide City all relevant information used for its decisions in time for them to sufficiently respond.
Man City statement in full
Following today’s publication of the Rule X Arbitral Tribunal Award, Manchester City Football Club thanks the distinguished members of the Arbitral Tribunal for their work and considerations and welcomes their findings:
The Club has succeeded with its claim: the Associated Party Transaction (APT) rules have been found to be unlawful and the Premier League’s decisions on two specific MCFC sponsorship transactions have been set aside
The Tribunal found that both the original APT rules and the current, (amended) APT Rules violate UK competition law and violate the requirements of procedural fairness.
The Premier League was found to have abused its dominant position.
The Tribunal has determined both that the rules are structurally unfair and that the Premier League was specifically unfair in how it applied those rules to the Club in practice.
The rules were found to be discriminatory in how they operate, because they deliberately excluded shareholder loans.
As well as these general findings on legality, the Tribunal has set aside specific decisions of the Premier League to restate the fair market value of two transactions entered into by the Club.
The tribunal held that the Premier League had reached the decisions in a procedurally unfair manner.
The Tribunal also ruled that there was an unreasonable delay in the Premier League’s fair market value assessment of two of the Club’s sponsorship transactions, and so the Premier League breached its own rules.
Other claims made by City against the Premier League were dismissed, however.
A statement from City on Monday thanked the panel and said its findings demonstrated the Premier League had ‘abused its dominant position’.
Premier League statement in full
The decision of an Arbitration Panel has been published (click here) following a legal challenge by Manchester City FC against the Premier League’s Associated Party Transaction (APT) Rules.
The Premier League welcomes the Tribunal’s findings, which endorsed the overall objectives, framework and decision-making of the APT system. The Tribunal upheld the need for the APT system as a whole and rejected the majority of Manchester City’s challenges. Moreover, the Tribunal found that the Rules are necessary in order for the League’s financial controls to be effective.
The decision represents an important and detailed assessment of the APT Rules, which ensure clubs are not able to benefit from commercial deals or reductions in costs that are not at Fair Market Value (FMV) by virtue of relationships with Associated Parties. These Rules were introduced to provide a robust mechanism to safeguard the financial stability, integrity and competitive balance of the League.
The Tribunal did, however, identify a small number of discrete elements of the Rules which do not, in their current form, comply with competition and public law requirements (more information below). These elements can quickly and effectively be remedied by the League and clubs.
In the meantime, the Premier League will continue to operate the existing APT system, taking into account the findings made by the Tribunal.
While the Arbitration process is confidential, the Premier League and the Club have agreed to make public a redacted copy of the decision, withholding only confidential and commercially sensitive information.
‘Following today’s publication of the Rule X Arbitral Tribunal Award, Manchester City Football Club thanks the distinguished members of the Arbitral Tribunal for their work and considerations and welcomes their findings.’
BBC Sport report Chelsea, Newcastle and Everton all acted as witnesses for City in this arbitration process.
Witnesses for the Premier League meanwhile included Manchester United, Liverpool, Arsenal, Tottenham, Brighton and West Ham.