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Manchester City and the Premier League could clash again in the coming weeks as the fallout from the ruling into Associated Party Transaction regulations continues
Manchester City could be on another collision course with the Premier League.
The reigning champions landed a huge blow in their bid to have Associated Party Transaction regulations rewritten last week when an independent panel ruled the current framework is unlawful.
City’s victory means loans provided to clubs by their owners at rock-bottom rates of interest must now be included in Profit and Sustainability calculations. Clubs like Everton, Brighton, Arsenal, Chelsea and Liverpool have all benefited from borrowing money from their owners or shareholders at cheap or zero interest rates.
Incredibly, there are only six clubs in the PL without owner loans. While there have been suggestions that the Premier League will only take future loans into consideration for PSR purposes, there is a growing belief inside the game that City are one of a number of clubs who want any newly-drafted rules to be applied retrospectively.
If the Premier League refuse to acquiesce, the likelihood is that another tribunal will be asked to judge on whether the Premier League are continuing to operate outside the law. And another defeat for chairman Richard Masters could plunge a number of clubs into a PSR nightmare stretching over multiple seasons.
Simon Leaf, a partner with international law firm Mischon de Reya who specialises in sport, warned: “There’s a danger that the league may descend into civil war if a workable and sensible solution to the present issues are not found.
“Manchester City have left the Premier League with the huge challenge of deciding whether the new rules about shareholder loans should be applied retrospectively. If they aren’t, then it’s quite conceivable that City will mount another legal challenge.
Arsenal: £259m – Stan Kroenke
Bournemouth: £115m – Black Knight FG
Brighton: £373m – Tony Bloom
Chelsea: £146m – Todd Boehly (had £1.5billion in owner loans written off when Roman Abramovich left)
Everton: £451m – Farhad Moshiri
Leicester: £132m – Srivaddhanaprabha family
Liverpool: £71m – FSG
“It’s a real mess. The only way to fix it, I suspect, is for those loans to be considered retrospectively – and that wouldn’t be popular with a number of clubs.
“But if the Premier League insists on only considering new shareholder loans then it’s very possible that City will claim the rules are still unlawful.”
City’s stance already had the support of several other top-flight clubs. We understand that since the ruling, others are now in agreement.
It is also believed that the panel’s award means the Premier League will have to pay a hefty chunk of City’s legal costs. And the
champions have also been granted leave to demand compensation if they can show they have been damaged financially after seeing two huge sponsorship deals with Etihad and the Abu Dhabi First Bank blocked by APT.
City are three weeks into an even more challenging legal battle with the league after being hit with 115 charges based on allegations that they failed to supply accurate financial information over a nine-year period from 2009.
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If any of the more serious claims are proved they face being kicked out of the top-flight.
Both City and the Premier League claimed victory when the outcome of the APT case was made public – and City’s general counsel Simon Cliff felt compelled to write to the other 19 clubs to warn them that Masters’ verdict is flawed.
Masters has suggested issues with APT legislation can be “quickly and effectively remedied” in time to be put to a vote at an emergency Premier League meeting on Thursday.
But Leaf warned: “Man City are right to point out that rushing through new rules could lead to the Premier League opening themselves up to further legal challenges if the process isn’t undertaken correctly.
“City have been criticised for being aggressive in their letter to the 19 other Premier League clubs, but their point that this has to be done with proper legal advice is a valid one. Just voting through new rules that satisfy 14 clubs doesn’t
guarantee that they will comply with the law.”
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