Landmark verdict in the case on the regulation of sponsorship agreements. Manchester City shakes the foundations of the Premier League’s financial rules

The decision of the Arbitration Tribunal on the Associated Party Transactions (APT) rules in the Premier League has shaken the foundations of financial regulation in English football. The tribunal branded some aspects of the APT rules illegal, prompting a stormy reaction from Manchester City and the league’s management. While City celebrate the victory and claim that the league abused its dominant position, the Premier League stresses that the basic principles of the APT system remain valid.

• Some of the APT rules have been described as illegal and in breach of British competition law
• In particular, the exclusion of shareholder loans from the rules has been criticised
• Premier League must overturn two previous decisions to veto Manchester City sponsorship deals

What are the APT rules?

The APT rules were introduced by the Premier League in December 2021. They aim to regulate sponsorship deals between clubs and companies associated with their owners. These measures are designed to prevent clubs artificially increasing their income and ensure fair competition.

The tribunal’s decision

The arbitration panel issued its decision after several months of deliberations. The tribunal ruled that some parts of the APT rules violate competition law. In particular, it criticised the exclusion of shareholder loans from the rules.

Manchester City considers this decision a victory for them. The club said the tribunal found the elite English competition guilty of abuse of dominance. City also stressed that the league should overturn two decisions on the club’s sponsorship deals.

However, the Premier League says the ruling upholds the overall aims of the APT system. The league has admitted that some elements of the rules are not in line with competition law. However, it also said that these issues can be resolved quickly and effectively.

Implications for other Premier League clubs

The decision has significant implications for the operation of the English Premier League and its clubs. Manchester City can now expect a reassessment of its sponsorship deals. This applies in particular to agreements with Emirates Air Group and First Abu Dhabi Bank.

Newcastle United, which is owned by a Saudi Arabian investment fund, will also be watching developments closely. The club recently had to subject its sponsorship deals with Sela and Noon to market value tests.

The tribunal’s decision on the APT rules in the Premier League could have significant implications for clubs, particularly those with wealthy owners. The decision could potentially be favourable to financially strong teams.

It could allow them greater flexibility to enter into sponsorship agreements with related companies, potentially leading to higher commercial revenues. As a result, wealthy clubs could make better use of their financial resources and potentially increase investment in players and infrastructure.

The future of financial management in the Premier League

The Premier League has announced that it will continue to operate the APT system. However, the League will take into account the Tribunal’s findings and amend the problematic parts of the rules. The English League aims to create a system that ensures fairness for all clubs while complying with the law.

English League clubs will be voting on changes to the APT rules in the near future. The approval of at least 14 of the league’s 20 clubs is required to adopt the new regulations. This may be a challenge given the differing interests of individual clubs.

This dispute highlights the complexity of regulating modern football. England’s top football competition now faces a difficult task: balancing the interests of clubs with wealthy owners with the desire to ensure fair competition. The outcome of this case will have a major impact on the future of financial rules in English football.

Source: Manchester City, Premier League, Athletic, X