Man City successful in legal battle over sponsorship deals

 Manchester City have landed a blow in their latest legal challenge against the Premier League, after an independent tribunal ruled the league unfairly blocked two of the club’s spon­sorship deals and that some of the regulations breached compe­tition law.

The tribunal also concluded that Premier League’s financial fair play calculations should factor in interest-free loans from club shareholders, which clubs such as Everton, Brighton, Arse­nal and Chelsea all significantly benefit from.

If these loans are now to be considered associated party deals, it means City’s rivals could be in danger of breaching profitability and sustainability rules (PSR).

City launched a legal action against the associated party transaction (APT) rules earlier this year on the grounds they were anti-compet­itive. The rules are designed to ensure com­mercial deals with entities linked to a club’s owners are done for fair market value.

The matter is sep­arate to the ongoing case of 115 charges City face for alleged breaches of the Premier League’s financial rules, but the APT rules which City have partially success­fully challenged here are central to that larger case.

The Premier League claimed its own victory, pointing to the tribunal’s conclusions that, “the objectives, framework and deci­sion-making of the APT system” were broadly sound. The league promised to quickly remedy “a small number of discrete ele­ments of the Rules which do not, in their cur­rent form, comply with competi­tion and public law require­ments”.

The league also said the panel had rejected City’s argu­ment that the purpose of the rules was to discriminate against clubs with ownership from the Gulf region.

City indi­cated that the panel found that APT rules were “structurally unfair” and that the panel had set aside specific decisions of the Premier League to restate the fair market value of the two transactions entered into by the club.

City said in a statement: “The Club has succeeded with its claim: the Associated Party Transaction (APT) rules have been found to be unlaw­ful and the Premier League’s decisions on two specific MCFC sponsorship trans­actions have been set aside:

“The Tribunal found that both the original APT rules and the current, (amended) APT Rules violate UK competition law and violate the require­ments of proce­dural fairness. — Independent