Manchester City yesterday won a landmark legal victory against the Premier League after judges ruled that some of the competition’s sponsorship rules are unlawful.
The Associated Party Transactions (APTs) regulations are intended to prevent companies associated with the owners of football clubs from deliberately paying over the odds for sponsorship deals with the clubs concerned.
The rules were introduced following the Saudi takeover of Newcastle United in an attempt to stop wealthy owners from using these link-ups to boost their teams’ revenues so they can spend more money without breaking financial fair play rules.
In City’s case, the Premier League rejected new sponsorship deals the club had lined up with current shirt sponsor Etihad Airways and First Abu Dhabi Bank. City is owned by a firm linked to Abu Dhabi’s ruling family.
The club took the league to court earlier this year, claiming APTs were unfair, and a panel of three retired judges has now ruled the league was wrong to stop the deals because elements of the APT regulation breach the Competition Act.
City said in a statement: “Manchester City Football Club thanks the distinguished members of the Arbitral Tribunal for their work and considerations and welcomes their findings.”
It added: “The Premier League was found to have abused its dominant position. The Tribunal has determined [that] the rules are structurally unfair.”
For its own part, the Premier League focused on the positive, noting that not all of City’s complaints had been upheld and that the panel’s findings “endorsed the overall objectives, framework and decision-making of the APT system.”
It added in a lengthy, 1,200-word+ statement: “The tribunal did, however, identify a small number of discrete elements of the rules which do not, in their current form, comply with competition and public law requirements. These elements can quickly and effectively be remedied by the league and clubs.”
Specifically, the tribunal found City to be in the right in no less than seven key arguments, which are likely to be the seven that are remembered from the case rather than the ones the Premier League is seeking to highlight.
It ruled the league was wrong to reject, under APT rules, a wide-ranging new sponsorship deal City had lined up with Etihad late last year as well as the second deal with FAB. The Etihad verdict was “procedurally unfair” and “must be set aside” because City did not have the opportunity to respond to the Premier League’s analysis before it reached its decision. The deal with First Abu Dhabi was also unfair because City were not given details of transactions with other clubs the Premier League referred to in its final decision and that there was an “unreasonable delay” of around three months.
The league’s statement added that the APT system would continue to operate “taking into account the findings made by the tribunal,” which seems optimistic to put it mildly. City are expected to seek costs and damages, while other clubs could also seek damages if they believe they have been impacted. Realistically, the Premier League seems likely to have to drastically amend its ATP rules, or dump the system entirely.
It should be noted that this case is entirely separate to the much-hyped “115” charges against City, although there is some crossover – the club’s previous, 10-year sponsorship deal with Etihad features in that case.
As opening salvos in what looks set to be a drawn out battle between City and the league the club has won for the last four seasons in a row go, however, the decision certainly marks out a statement of intent from City’s expensively-assembled legal team led by Lord Pannick, the KC who successfully argued that then-PM Boris Johnson had given unlawful advice to the Queen over the 2019 proroguing of parliament.
Within the ruling it also emerged that Arsenal, Manchester United, Liverpool, and West Ham gave evidence in favour of the Premier League, while Brentford, Bournemouth, Fulham, and Wolves wrote letters in support. On the other hand, Newcastle, Chelsea and Everton all gave evidence in support of City.
It’s long been a popular hobby among fans of the club from just outside Manchester in nearby Stretford to refer to their blue neighbours as “bitters.” The way this saga is panning out, the bitterness looks like it will be spilling out way beyond East Manchester.
