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Published on Oct 7, 2024 at 5:54 p.m. par
Abdel Maarous
Manchester City partially wins legal battle against Premier League
The court delivered its verdict in the case opposing Manchester City to the Premier League regarding the rules on related party transactions (APT). Two points disputed by the club were ruled illegal, giving City a partial victory in this complex legal battle. However, the Premier League clarified that the majority of the challenges raised by Manchester City had been rejected, while confirming the overall validity of the objectives and framework of the APT rules.
What are Related Party Transactions (RPTs)?
THE APT are commercial transactions between a club and companies closely related to its owners. These transactions are closely monitored by the Premier League to ensure they comply with the Fair Market Value (FMV)a concept introduced in December 2021 following the acquisition of Newcastle by a Saudi consortium. The aim is to prevent clubs from artificially inflating their income through affiliated sponsors, which would allow them to circumvent current financial rules and increase their spending capacity.
The points contested by Manchester City
In this case, Manchester City had challenged certain aspects of the APT rules, notably the fact that shareholder loans are not included in the scope of the APTs, and that certain modifications introduced by the Premier League last February are not retained. The court ruled in favor of the club on both counts.
However, the court rejected other claims by the club, including those regarding the general purpose of the APT rules. As a result, the Premier League described this decision as confirmation of the validity of its decision-making framework and regulatory mechanisms.
Context and actors involved in the trial
The lawsuit is not directly related to 115 charges of violating financial regulations which Manchester City has faced since 2009. This is a challenge to recent rules on related party transactions. Several other Premier League clubs were involved in the case as witnesses. Chelsea, Newcastle et Everton supported Manchester City’s position, while clubs like Manchester United, Liverpool, Arsenal, Tottenham, Brighton et West Ham testified in favor of the Premier League.
