Manchester City Football Club has agreed an out-of-court settlement with the Premier League over its Associated Party Transaction (APT) Rules. Manchester City sent the arbitration proceeding on its way with a notice of arbitration filed January 20, 2023. They took on the validity of rules meant to ensure that transactions between clubs and their ownership-related entities are at fair market value.
The Premier League charged Manchester City in February with over 100 counts of non-compliance with those APT Rules. That hearing was held between September and December of 2022. It concluded with a settlement that peacefully and successfully brought an end to the years-long conflict.
Details of the Settlement
In further consideration of the settlement, Manchester City accepts the validity and enforceability of the current APT Rules. This agreement represents an important, new and historic development in the relationship of the club to the league. It follows Manchester City’s loud and public criticisms of the way shareholder loans were treated by regulators.
That nasty outburst started when the Emirate’s club signed an Insulting New Sponsorship Agreement with Etihad Airways and First Abu Dhabi Bank. The club was extremely disappointed with parts of the amended APT rules. In September, an independent panel ruled that several of the important provisions of these rules were illegal, leading the club to first file legal action against them.
In February, the tribunal found 2021-2024 APT regulations passed by the state unconstitutional. They retroactively declared those rules unlawful to enforce. This decision initiated negotiations between Manchester City and the Premier League. It did help lead to a recent settlement.
“The Premier League and Manchester City FC have reached a settlement in relation to the arbitration commenced by the club earlier this year concerning the Premier League’s Associated Party Transaction (APT) Rules, and as a result the parties have agreed to terminate the proceedings.” – Manchester City
Implications of the Agreement
The settlement agreement does bring to a close the lengthy legal battle over the APT Rules. That means this resolution moots the trial set to begin in October. As a result, this resolution is the best course for both parties to proceed without further litigation on this issue.
In an industry where silence often mars progress, Kaveh Solhekol a prominent sports pundit further stressed the importance of this settlement. He noted that this is an extraordinary turning point in the long and combative relationship between Manchester City and the Premier League. The unresolved regulatory issues have been fundamental in influencing their relationship.
“This settlement brings an end to the dispute between the parties regarding the APT Rules. As part of the settlement, Manchester City accepts that the current APT Rules are valid and binding.” – Manchester City/The Premier League
Solhekol is here to emphasize the importance of this resolution. It’s particularly fascinating as Manchester City had, until recently, legally contested these very regulations in court. This is an unprecedented gambit at this level of club-versus-club dealings.
Continued Legal Challenges
This bill of settlement is distinct from the legal troubles that continue to dog Manchester City. The club is currently defending more than 100 charges of breaches of Premier League financial regulations. Even still, the club has persisted through these realities and landed on its feet and in full compliance with new-covenant obligations around APT Rules.
With this resolution, Manchester City now has the opportunity to lead. Moving forward, the team can focus on its larger objectives without being diverted by litigation over outdated APT regulations. The club is firmly focused on complying with league policy but pushing back in order to protect its interests in sponsorship negotiations.
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