Man City's legal battle with Premier League will drag into next year
The legal battle between Manchester City and the Premier League is likely to continue into next year with a hearing for the latest dispute over sponsorship rules not due to take place until the autumn.
Last month City issued a new claim in response to the Premier League's attempt to amend sponsorship rules that were declared unlawful and void by an independent tribunal.
The English champions have accused the Premier League of distorting the competition in favour of Arsenal and other rival clubs who have benefited from huge loans from their owners.
In the new statement of claim, City complain that Arsenal, as well as Brighton & Hove Albion, Everton and Leicester City, have had an unfair advantage. They say that shareholder loans — where the owners lend clubs money — worth hundreds of millions of pounds at those four clubs have not been treated the same as other Associated Party Transactions (APTs), such as sponsorship deals with companies linked to club owners.
According to The Lawyer magazine, that hearing is not due to take place until the autumn and, while both the Premier League and City declined to comment on Tuesday, insiders believe it to be correct.
The hearing for City's original legal challenge against APT rules took place last June, with the tribunal issuing its initial ruling in October. However, it was not until February this year that the final ruling was published in what amounted to a crushing defeat for the Premier League.
The outcome of the case involving City's 130 alleged breaches of Premier League financial regulations is expected in the coming weeks but the battle over sponsorship rules is now sure to drag on long after that.
In February the tribunal — comprising three senior legal figures in Sir Nigel Teare, Lord Dyson and Christopher Vajda KC — concluded those APT rules were 'void and unenforceable', and City now argue that there needs to be a return to the pre-2021 rules until these matters are fully resolved. They argue in their latest claim that the amended rules continue to 'discriminate'.
City argue that they 'fail to meet the requirements of transparency, objectivity, precision and proportionality … and are liable to distort competition'.
Key to City's claim is the argument that the Premier League's attempt to change the APT rules after its latest legal defeat is unfair because they treat the shareholder loans differently, adding that the clubs who utilise that form of borrowing are benefiting from an unlawful exemption.
City, who launched their initial legal challenge last year after two Abu Dhabi-related sponsorship deals were blocked by the Premier League, make the broader point that the league should not change rules that have already been declared void, and was too hasty and slapdash in its response to the previous verdict.
Further to that, City have attacked the 50-day grace period given to clubs to convert shareholder loans into equity spending, while also criticising the league for claiming that shareholder loans do not need to be assessed for fair market value in the same way as other APTs.
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