Premier League and Manchester City reach agreement in investigation concerning Anti-Poaching Treaty regulations
Manchester City and Premier League Reach Settlement over APT Rules Dispute
Manchester City and the Premier League have announced a settlement regarding the dispute over the Associated Party Transaction (APT) Rules. The settlement ends the arbitration proceedings initiated by Manchester City earlier this year.
The club, represented by super lawyer Lord Pannick KC, had argued that the new regulations were "unlawful". Specifically, City claimed the option for owners to convert shareholder loans of up to £400m-plus into equity stakes was unlawful, giving rivals an unfair advantage. City pointed to Arsenal, Brighton, Everton, and relegated Leicester as examples of clubs handed such an advantage.
Had City succeeded in the planned legal case, it would have opened the floodgates for state-backed clubs to enjoy huge extra funding from companies related to their owners. However, the settlement allows City to benefit from a new Etihad deal, improving their financial power.
Manchester City accepts that the current APT Rules are valid and binding. The revised APT rules, designed to curb the amount clubs can receive in sponsorship and other income from companies they are associated with, were approved by the top flight clubs in November.
The Premier League made tweaks to shareholder loans, the process of sharing financial information, and wording changes to some amendments in response to City's concerns. The revised APT rules have superseded the previous ones, according to the Premier League.
City's stance was that unconverted loans were subject to a "discriminatory" Fair Market Value test. The club's general counsel, Simon Cliff, suggested further legal action would likely follow due to the Premier League's interpretation of the tribunal's ruling not being correct.
The case is separate from the ongoing allegation of "115" breaches of financial rules, with the judgement from a three-man commission eagerly awaited. Neither the Premier League nor Manchester City will be making any further comments about the matter.
The Arbitration Tribunal, set to convene to hear the case next month, will not be proceeding due to the settlement. The previous version of the APT rules was declared "invalid" by senior lawyers.
This settlement marks a significant development in the financial landscape of English football, with the Premier League and its clubs continuing to navigate complex financial regulations to ensure a fair and competitive environment.
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