Manchester City launched its last legal assault on the Premier League – by contesting its attempt to modify the sponsorship rules.
Last year, the champions of four rows triumphed over competition when a court found that the transaction regulations of the associated parties (APT) – designed to prevent clubs from reporting trade agreements inflated with companies linked to their owners and were introduced following the takeover of Newcastle United, led by the Saudi. competition.
Despite numerous objections of the city, clubs voted from 16 to 4 to support the Premier League to modify rather than rewrite the rules in November.
And the city’s assembled legal team has now kept this promise via another burning attack, which affirms that the modified regulations continue to discriminate ” and highlight a multitude of rivals, including Arsenal, which, according to them, enjoy an unfair advantage.
The same panel that reassured itself with City on their initial complaint will stabilize again on the last dispute. If City succeeds a second time, it would put the financial rules of the Premier League in disarray and again see clubs hit with a legal bill.
The case is distinct from the 130 accusations against City by the Ligue for alleged violation of financial rules. However, City uses the same legal team to represent them.
Man City (in front of the owner Sheikh Mansour, on the left, President Khaldon Al Mubarak, Center, and CEO Ferran Soriano, on the right, developed the modified sponsorship rules of the Premier League
The Premier League – manufactured by the director general Richard Masters (photo) – changed their rules rather than rewriting them after a vote by high -level clubs in November
The city’s assembled legal team led by Lord Pannick KC (Photo), says that the “discriminant” rules against the club
The City’s argument, shared with clubs by the Premier League, is largely double. The original rules have been marked illegal thanks to the fact that the shareholders’ loans – the funds generally lend to clubs at favorable or zero interest rates by the owners – were not subject to the “fair market value” (FMV) test as commercial offers.
The modified Apt rules are trying to deal with this problem by allowing clubs that have benefited from shareholders to see them converted into equity during a “grace period” which ended in January.
Those who are not converted are subject to an FMV test which, depending on the city, continues to be discriminatory because the clubs can keep the loan, are not required to pay interest from the FMV and must only take into account figures received for the first time from this season’s accounts – that they claim that up to three years of interest expenses could be excluded.
The city claims that such a “differential treatment” means that the changes in rules “do not eliminate but on the contrary perpetuate the discriminatory and distortive treatment previously found by the court”.
They also underline the fact that shareholders ‘loans can be paid in full before any FMV assessment is carried out, unlike the waiting period of 30 days, an agreement with an associated part is subject to offers “a substantial advantage of cash flow and a reduction in costs for the club receiving shareholders’ loan”. They add: “This preferential and continuous discriminatory treatment of loans for shareholders has the object and / or the effect of distorting economic competition between member clubs on the affected markets”.
In a global attack, City affirms that the rules as they “do not meet the requirements of transparency, objectivity, precision and proportionality … and are likely to distort competition”.
The Premier League interpreted the initial conclusions of the Tribunal as a verification of the majority of the Apt rules and thought that they could simply make a small number of modifications. City urged them not to do so and was supported by others, including Aston Villa.
They asked the Premier League to hold the fire until the court judged if all the rules – rather than simply certain sections – were zero and not with. In February, the panel did exactly that, the mark of “empty and inapplicable” rules in their entirety. The Premier League said that the decision had not had an impact on the modified rules, which, according to them, are always “valid and enforceable”.
City received support for their position on the sponsorship rules for Aston Villa Wes Edens (left) and Nassef Sawiris (right)
The new legal affair is distinct from the 130 accusations suspended on the Pep Guardiola team
But City lawyers – who published their first challenge after a large agreement with Etihad were blocked by the Premier League – say in the second half of their argument that this is not the case and that the modifications are invalid.
“This vacuum means that the changes are themselves empty, because it is not legally possible to modify the rules which are themselves empty,” they add.
To illustrate their point, City is also immersed in the accounts of rival clubs in the 88 pages, stressing that Arsenal benefited from the shareholders to around 259 million pounds Sterling in 2022-23 2021-22.
Another victory for City would send the Premier League to the drawing board and will peel the pressure on the director general Richard Masters. He would also see the clubs return to the system before 2021, which did not include the Apt rules. Instead, there were less rigorous regulations on the agreements with “linked parties”.
The Premier League refused to comment.
