Defending champions Manchester City have challenged the Premier League legally. They are currently contesting the newly updated APT regulations which regulate commercial agreements between professional football clubs and businesses ostensibly owned by their owners. The club has a Herculean task before them. The Premier League has thwarted its attempts to lock down new, richer sponsorship contracts with partners such as Etihad Airways and First Abu Dhabi Bank.
These landmark APT rules came into effect in December of 2021. It was a blatant effort to short-circuit the rising opposition to the Saudi Arabian takeover of Newcastle United. These statutes apply to commercial agreements and mandate that contracts be made at “fair market value.” They are trying to prevent the richest clubs from artificially inflating the value of their transactions with businesses. These rules are meant to bring the clubs into line with the Profit and Sustainability Rules (PSR) of the Premier League. Their stated mission is to ensure honesty and equity in competition.
In February, an independent arbitration panel found profound weaknesses in the Premier League’s implementation of its own rules. This finding resulted in a detailed re-interpretation of individual provisions. In November, the league made good on that promise and rewrote three parts of its rules that violated – in varying degrees – the law. The overwhelming support of clubs passed these crucial amendments all the faster. Manchester City argues that the Premier League’s revisions should not have been enacted, claiming that they infringe upon the club’s rights to enter into commercial arrangements.
This legal challenge is separate from the continuing court case about more than 100 supposed breaches of the Premier League’s financial regulations. It happens to include Manchester City. One notable example is the club’s current fight against APT rules limiting the club’s capacity to make money from sponsorships. This is particularly troubling for sponsorships linked to state-owned enterprises supported by Abu Dhabi.
City’s management continues to argue that because of the adoption of the APT rules, their opportunity for growth and financial progress has been severely restricted. The plaintiffs’ legal team is continuing to work for a ruling against the FHWA’s new, stronger regs. Lastly, they argue that these regulations are inherently invalid and not appropriately tailored to limit the operations of the gentlemen’s club.
Whatever the outcome, this legal battle is sure to have monumental consequences for Manchester City. It rightfully could recast the entire paradigm of commercial relations across the Premier League. As clubs navigate the complexities of financial regulations, the tension between compliance and competitive advantage remains a critical issue.
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