Why Man City have launched PL legal case and how it could impact FFP charges (original) (raw)

Reigning champions Manchester City are suing the Premier League over their Associated Party Transaction rules, which relate to sponsorship deals having connections to club owners

Manchester City have launched legal action against the Premier League

Manchester City have launched legal action against the Premier League

Manchester City have launched an unprecedented legal case against the Premier League, with a hearing set to take place next week.

As reported by The Times, City allege that the league is discriminating against Gulf ownership and are hoping to bring an end to Associated Party Transaction (APT) rules. City's lawyers filed a 165-page claim against the league.

According to the Press Association, the league were warned by City at a shareholders' meeting in February that they were considering taking legal action against the APT rules. However, those rules were ultimately strengthened after a majority of clubs voted in favour of them at that meeting.

Here, Mirror Football takes a look at City's case and the wider impact it could have on the league.

What are APT rules?

The rules were introduced after Newcastle were bought by Saudi Arabia's Public Investment Fund in 2021 and are essentially meant to stop clubs from agreeing sponsorship deals or transfers at inflated prices with companies linked to their owners as a way of flouting profit and sustainability rules.

Those rules were then tightened earlier this year, with a club director now having to sign a declaration stating that they believe any sponsorship or transfer with an associated party is of "fair market value".

Until that change was voted through, it was down to the league to prove a deal had been inflated. Both City and Newcastle are understood to have voted against the changes, while the likes of Liverpool, Manchester United, Arsenal and Tottenham all voted in favour.

Premier League chief executive Richard Masters (

Image:

Getty Images)

What's the case?

City allege that the rules make them subject to a "tyranny of the majority" and that they are victims of "discrimination against Gulf ownership".

The other 19 Premier League clubs are said to have been invited to provide evidence, with City branding the rules "unlawful". They are suing the league for damages.

City claim the rules were only introduced due to rival clubs being concerned about Newcastle's Saudi takeover and that they are an attempt by those sides to "safeguard their own commercial advantages".

They go on to claim the rules are "deliberately intended to stifle commercial freedoms of particular clubs in particular circumstances, and thus to restrict economic competition". City also insist that "there is no rational or logical connection between a club's financial non-sustainability and its receipt of revenues from entities linked to ownerships".

City's owner Sheikh Mansour (

Image:

Getty Images)

How could it impact City's 115 charges?

City are, of course, still facing 115 charges of breaching the league's PSR rules and those alleged breaches include claims that the club concealed extra investment from their owner by disguising the funds as revenue from sponsors.

Premier League chief executive Richard Masters stated earlier this year that City's case will be resolved "in the near future" and the Times state that the independent hearing into the charges is due to start in November.

However, if City are successful in their legal action against APT rules it could majorly strengthen their defence. Club chairman Khaldoon Al Mubarak has referenced the 115 charges in an interview with club media, admitting the process is "taking longer than what anyone hoped for".

Club chairman Khaldoon Al Mubarak (

Image:

Getty)

"Of course, it's frustrating," he said. "I think the referencing is always frustrating. Having it being talked about the way it's being talked about. I can feel for our fanbase, and everyone associated with the club, to have these charges constantly referenced.

"I think we as a club have to respect that there is a process that we have to go through, and we’re going through it. It's taking longer than what anyone hoped for, but it is what it is, and I've always repeated, let's be judged by the facts, and not by claims and counterclaims."

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