Man City ‘taking legal action’ against Premier League over financial rules ahead of own 115-charge hearing | football news

Manchester City takes legal action against the Premier League. The times has revealed exclusively.

The newspaper reports that City are attempting to end the Premier League’s Associated Party Transactions (ATP) rules.

Those rules refer to commercial and sponsorship agreements with companies owned or associated with the owners of the same club.

As things stand, those rules dictate that such transactions must be independently evaluated to determine whether they have fair market value.

The times reports that the city believes the rules are “illegal” and wants to seek damages for revenue lost from the preventions made by those rules.

The newspaper’s journalist, Matt Lawton, cites a 165-page legal document in which City claim they are victims of “discrimination”.

The rule was introduced in December 2021 when the Saudi Arabia Public Investment Fund bought Newcastle.

The legal dispute will be resolved during a two-week arbitration hearing beginning Monday, June 10.

Sky Sports News has contacted the Premier League and Manchester City for comment.

What are the rules for transactions with associated parties?

  • Premier League rules require any club, its players, manager or any “senior official” to make dealings with “associated parties” beyond themselves.
  • “Associated parties” are companies or individuals who have a significant interest in the club concerned, whether financially or otherwise.
  • The Premier League board then reviews each transaction to assess whether it believes they represent fair market value.
  • The league says the rule helps bring “fairness” across the division by ending the “reliance on increased commercial revenue tied to club ownership.”

“This could have big ramifications for the future competitive balance of the Premier League”

Sky Sports News Chief Reporter Kaveh Solhekol:

“What is being reported is unprecedented. We find ourselves in a situation where a Premier League club, Manchester City, the Premier League champions, are basically suing the Premier League.

“What City are going to argue in this arbitration hearing, which begins on Monday, is that some of the league’s financial rules are illegal and incompatible with UK competition law. The rules they are talking about are the rules of transactions of associated parties.

“These were introduced in 2021 and are designed to ensure that if a club signs a commercial agreement with a company linked to its owners, it has to be of fair value, and that is checked to ensure it is of fair value.

“So if you own a Premier League club and you have another company, say an airline or an energy company, and you want that company to sponsor your club, because that’s a good way to generate income for your club: that agreement must be verified by independent auditors to ensure that it has a reasonable value.

“You can’t just make up a number and say the deal is worth £100m, £200m or £300m as a way of bringing money into your club. It has to be of fair value.

“But City are going to argue that these rules are illegal and obviously this could have big and serious ramifications for the future competitive balance of the Premier League.”

How does this relate to Manchester City’s current 115 caps in the Premier League?

Manchester City was first accused in February 2023 of violating financial fair play rules around 100 times over a nine-year period, starting in 2009 and continuing until 2018.

They allegedly failed to fully disclose the financial compensation paid to one of their managers over a four-year period. The suggestion is that there was a secret contract, so one of the managers was paid much more than officially stated.

The Premier League also alleges that Manchester City failed to comply with UEFA’s financial fair play rules over a five-year period. They also allege that Manchester City has not fully cooperated with the Premier League investigation.

The Times report states that a hearing on the City’s 115 alleged violations will take place in November. Read more about the full charges here.

Sky Sports News chief reporter Kaveh Solhekol said: “The charges and this case are two separate things.

“All 115 charges have been brought by the Premier League against Manchester City over allegations of having breached the league’s financial rules over 12 or 13 years.

“The hearing on those charges is scheduled for November, but obviously a lot of those charges also have to do with sponsorship deals, deals that were made with companies that are connected to the owners of Manchester City.

“So if Manchester City win this case, which starts next week, it would open a big hole in the Premier League’s case at the November hearing on the 115 charges, because Manchester City would have successfully argued next week that “Some of these rules are illegal and inconsistent with UK competition law.”

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