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In a landmark judgment, an independent court has held that the Premier League’s Associated Party Transactions (APT) rules, in place between 2021 and 2024, are “void and unlawful.” It is a huge legal success for Manchester City and puts in jeopardy key principles of the Premier League handbook.
The tribunal labeled three particular APT rules as illegal, namely those relating to owners’ and shareholders’ loans to clubs. Manchester City contended that illegal provisions of this kind rendered the whole APT regime invalid—a contention that the tribunal accepted. This ruling not only clears Manchester City of its charge but also exposes the Premier League to the risk of having to indemnify clubs who have been disadvantaged by such a rule. The Premier League legal costs amount to more than £10 million. The APT rules, brought into force in December 2021 after the Saudi-backed takeover of Newcastle United, were designed to maintain the competitiveness of the Premier League by ensuring that clubs would not overstate commercial transactions with individuals related to their owners. The tribunal ruling highlights inherent faults in the rules, finding that they are structurally unfair and illegally discriminatory.
This ruling follows a series of successive court fights between Manchester City and the Premier League, along with accusations of 130 breaches of financial rules by the club. The ruling by the tribunal has significant implications, including potentially opening up compensation claims for clubs who believe they have been unfairly prejudiced by discredited APT rules. The Premier League’s legal bill will also cost more than £10 million, adding to its concerns over regulatory inefficiency.
At the tribunal’s behest, the Premier League has asserted that the former APT rules were empty. The league has established new rules, supported by a majority of clubs, to prevent the problems that had been discovered. The new rules are too vulnerable to challenge in law, and Manchester City has initiated new arbitration proceedings with a view to challenging their validity.
This trend has introduced a far-reaching scrutiny of the Premier League’s regulatory practice. Critics assume that the regulation of the league’s finances has been overly draconian and are skeptical of the league’s ability to adequately cope with sophisticated management of finances. The tribunal’s decision further underscores such concerns and implies a stringent necessity for proper scrutiny of the Premier League’s regulatory practice to ensure fairness and legality in the management.
As the Premier League tries to comprehend the consequence of this ruling, English football stakeholders demand higher levels of accountability and transparency in handling the league. This ruling is a landmark ruling, and strong and lawful governance arrangements within the Premier League are needed now more than ever.
