Man City WIN legal case against Premier League over sponsorship rules in huge boost ahead of fight over 115 charges
MANCHESTER City have won a huge legal battle against the Premier League.
After a summer hearing, three senior judges have now ruled that the Prem’s Associated Party Transaction rules meant City were “unfairly blocked” from inking two major deals.
GettyMan City have won a big legal battle against the Premier League[/caption]
It means that financial regulations restricting the value of sponsorship deals with companies aligned to their ownership groups could no longer come under financial handcuffs.
While there is no direct link to the ongoing hearing into the “115” financial allegations made against City by Prem bosses in 2023, the scale of the defeat is a massive blow for the credibility of the League.
And with the victory giving City the right to seek significant damages, it will add to the growing pressure on Prem chief executive Richard Masters and his senior colleagues.
City were furious when League bosses pushed through the rules, strengthening oversight of commercial deals, at a fractious meeting of the 20 “shareholder” clubs in February.
The rules aimed to block clubs bypassing financial controls by earning “unfair” amounts from sponsorships by companies linked to an owner, or by signing a player for below market value from a club in the same ownership group.
In the tightest vote on record, the new rules were approved on a vote of 12 in favour and six against, with two clubs abstaining, meaning they passed with the bare minimum majority.
That came despite clubs being informed that one member – which swiftly became clear was City – had threatened legal action under the League’s rules allowing an Arbitration appeal.
That panel, headed by former Master of the Rolls Lord Dyson, sat to hear submissions in June.
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City argued that the new rules were anti-competitive, had been deliberately aimed at them by rivals and were both flawed and politically driven, while also questioning the cost of enforcement.
The judges concluded the rules were unlawful because they did not take into consideration interest-free loans which shareholders lend to clubs.
Of the £4billion borrowing across the Prem, £1.5bn is in loans from club owners and shareholders.
And if regulations are changed to make these loans included in a profitability and sustainability calculation, many clubs could find they are in breach.
That includes City’s title rivals Arsenal, who have borrowed more than £200million from shareholder loans.
