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New York Times
05-04-2025
- Business
- New York Times
Explained: The Premier League's letter on ATP rules and City's issue with shareholder loans
The Premier League has written to its clubs to inform them about the second legal challenge Manchester City launched in relation to their amended Associated Party Transactions (APT) rules earlier this year. An independent tribunal comprised of Lord Dyson, Christopher Vajda KC and Sir Nigel Teare concluded that the APT rules in place between December 2021 and November 2024 were 'unlawful' and 'void and unenforceable'. Advertisement Premier League clubs then voted through amendments to the APT rules in November, despite Manchester City warning them against doing so until the tribunal had released its full ruling. And on February 6, Richard Masters, the Premier League's chief executive, wrote to clubs to inform them that City had launched a legal challenge against the amended APT rules. Following on from that, the Premier League has now written to clubs to provide an update on the process. In it, the Premier League included a statement of claim outlining why City believe the amended rules to be unlawful. After Manchester City launched a fresh challenge against the Premier League's latest version of the APT rules, both parties will be readying themselves for another legal showdown. But once that legal claim had been lodged, it is standard procedure from the league's perspective to then tell its clubs what is happening. So, with that in mind, the Premier League has now written to the other 19 clubs to inform them of the process that will now be followed. This included a statement of claims that details what Manchester City are challenging regarding the rules. It is important to note that the latest development is not the beginning of another legal challenge — it is all tied to the one City launched in February. Dan Sheldon Shareholder loans are when clubs borrow money from their ownership, usually interest-free. According to City, and agreed by the panel, as a matter of principle, an interest-free loan cannot be fair market value — and, therefore, this is the sort of loophole APT laws need to close. The likes of Arsenal, Everton, and Brighton & Hove Albion all have over £250million ($316m) in interest-free loans from their shareholders. Jacob Whitehead City believe that clubs not having to pay interest on loans granted to them by their owners is unfair because it effectively gives those clubs an advantage. Interest on loans can amount to millions of pounds, so avoiding those — due to a close relationship with an owner — should be considered in a similar way to how sponsorships are scrutinised if they are deemed to be from a company 'associated' to a club. In essence, City say that if their sponsorship deals with Abu Dhabi-based companies are put under the microscope and could potentially have new values assigned to them, the interest that would normally be paid on loans should be scrutinised, too. Advertisement They say that this should be factored into PSR calculations and in their latest legal challenge, they provide figures showing that certain clubs have benefitted in this way. Sam Lee Based on the most recent figures to the summer of 2024, Everton led the way, with £450.8million due to the Farhad Moshiri-controlled Bluesky Capital Limited. That loan was converted to equity in full when the club was sold to The Friedkin Group last September. The loan was interest-free. If charged at market rates, Everton would have been on the hook for significant financing costs, which would have worsened their already fraught profit and sustainability Rules (PSR) position. Confusion around how the funds from Moshiri were used was one of the key areas of dispute in Everton's PSR battle with the Premier League last season. In all, six clubs owed their owners (or related parties) over £100million at the last check. A look at five of those clubs shows a common theme. All of them, bar Chelsea, can link at least some of their 'internal' debt to building new stadia or enhancing existing facilities. Naturally, those improvements flow through eventually in higher gate receipts, helping clubs' bottom lines, but the Premier League's PSR rules also encourage clubs to spend on infrastructure. That isn't all shareholder loans get spent on. Brighton, for example, owed owner Tony Bloom £406.4million as recently as June 2022. The club built a new stadium under Bloom in 2011, though it only cost £101m per their accounts at the time. It's undeniable Brighton benefited from Bloom's interest-free funding in their march up the pyramid. The club has, however, repaid £106.7m to him over the past two seasons. Doing so didn't impact the club's PSR figures but did constitute a substantial cash outflow. At the other end of the scale, City themselves owe their owners nothing. The club was long funded by equity under the current ownership, much like Newcastle United since October 2021. Those two clubs' owners have rather deeper pockets than most, so funding has been provided with seemingly little expectation of, or need for, repayment. Even clubs without owner loans on their books aren't necessarily similar. Where City and Newcastle have minimal debt overall, Tottenham Hotspur took on huge external loans to fund their new stadium, with none of the money for the build coming from their owners. Spurs spent £29.7million on servicing their £851.4m debts last season. Chris Weatherspoon As with just about everything to do with Premier League finances these days, nuance abounds. On the face of it, owners ploughing in hundreds of millions interest-free, or at low interest, does confer an advantage over those clubs that are left to tap alternative funding sources — particularly in an era of rising interest rates. Clubs still have to manage any subsequent losses carefully, but the argument around fairness centres on the fact they can do so without the need to charge what those loans would normally cost in interest. Advertisement Yet it's hardly that simple. Take Arsenal. Up until 2020, the club's debt was entirely external, brought about by their building of the Emirates Stadium. Their owner debt (which isn't interest-free, either) only leapt us as the pandemic hammered gate revenues — which were linked to the outstanding bonds. Arsenal's owners stepped in and refinanced the debt to the tune of £202million, incurring £32.2m in costs to repay the bonds early, so it's not as straightforward as stating they've benefitted from £300m-plus in low-interest financing. City's pushing of the matter is unlikely to be solely focused on their belief other clubs have an unfair advantage. This latest claim appears to be yet another front in its ongoing legal tussle with the Premier League. After all, City have rarely owed their owners anything since their late 2008 takeover by the Abu Dhabi United Group despite receiving huge amounts from them, and they've benefited more than most from financial regulations subsequently being introduced. In the five seasons before the inception of Premier League PSR (then known as Financial Fair Play rules) in 2013-14, City received £984.8million in owner funding, much of it in equity. That conferred a huge competitive advantage. Had PSR loss limits been in place then, City would have breached dramatically. Obviously, they weren't, and clubs act in accordance with the existing conditions of the time. Yet that presents another question from this latest case: what if backdating interest on shareholder loans to 2021, as City appear to be advocating, pushes a club into a PSR breach? Should the club be punished when they could argue they would not have taken out the loans if the rules were different? The answer, almost certainly, would lie in yet more courtroom battles. This is a short answer: no. Not officially, anyway. All of this stuff goes back to last year's legal challenge against the legality of the Premier League's APT regulations, which was, legally, entirely separate to the ongoing saga related to the 130 charges against City. All of the fall-out, including Friday's updates, relate to associated party transactions. This second challenge from City is to ensure that the Premier League properly scrutinise the interest-free shareholder loans, something that came from the first challenge. In terms of any 'unofficial' crossovers to the much-anticipated charges, any legal defeats for the Premier League — whether at the hands of City's lawyers or anybody else's — are likely to give City encouragement while they, and the rest of us, await the much bigger verdict. Plus, one byproduct of the APT challenge may see Arsenal and Brighton, two of City's biggest rivals off the pitch, handed a considerable PSR headache. Sam Lee Both parties, unsurprisingly, are confident they will emerge victorious following the tribunal, which is being chaired by the same three-person panel, that is yet to take place regarding the second APT challenge. As it stands, the existing APT rules — voted in by clubs in November — remain in place and, for now, are deemed to be legally sound. Advertisement Before that vote took place, City warned their fellow Premier League sides not to vote through any changes to the rules until the tribunal had delivered its full verdict in relation to their first legal challenge. And on the back of their victory in February, City will undoubtedly feel confident they have a strong case to present when it comes to getting the amended APT regulations thrown out. If that proves to be the case, then it will be another significant defeat for the Premier League as far as its APT rules are concerned. Dan Sheldon
Telegraph
04-04-2025
- Business
- Telegraph
Man City accuse Premier League of favouring Arsenal
Manchester City's latest 'discrimination' claim accuses the Premier League of distorting spending check rules in favour of Arsenal and a handful of rivals. City have taken renewed issue with shareholder loans being spared from the same level of fair market scrutiny as other sources of owner funding. As a result, Arsenal, Brighton, Everton and Leicester City in effect get preferential treatment, a statement of claim to an independent tribunal argues. The claim, which has now been shared with the 20 member clubs, is part of a wider challenge to amends made last year by the Premier League to Associated Party Transactions (APTs). After previous APT rules were declared 'void and unenforceable' in February, City now argue that there needs to be a return to pre-2021 rules until matters are fully resolved. The rules continue to 'discriminate', the new claim says, adding that they 'fail to meet the requirements of transparency, objectivity, precision and proportionality… and are liable to distort competition'. Sources close to City have consistently drawn issue with shareholder loans not being included in APT calculations. An independent tribunal ruled in October that elements of the rules regarding APTs were unlawful, notably around shareholder loans being exempt from financial calculations, prompting City to declare the entire APT system void. The APT system was introduced in 2021 following the takeover of Newcastle United by the Saudi Arabian Public Investment Fund and is designed to prevent clubs from agreeing inflated sponsorship deals with companies associated with their ownership. City's belief that the system is void was then upheld in February for the three-year period from 2021 until new rules were introduced in November 2024. The ruling did not deal with the validity of amended APT regulations that were voted in late last year, however, which is why City are now challenging them. The outcome of that challenge, expected later this year, is likely to be critical in determining whether shareholder loans should face limits. City have separately been defending themselves against the 130 Premier League charges for alleged breaches of financial rules. An independent commission spent 12 weeks last year hearing evidence in relation to the charges, with a verdict in football's so-called ' trial of the century ' expected in the coming weeks.
Yahoo
15-02-2025
- Business
- Yahoo
Manchester City Court Case Victory Plunges Premier League into Crisis
Manchester City has won a significant court case against the Premier League, leaving England's top football division in turmoil. Mark Goldbridge, speaking on the That's Football YouTube channel, described the situation as a 'massive embarrassment' for the league, warning of far-reaching implications for competitive integrity and financial regulation. The dispute centred on the Premier League's Associated Party Transactions (APT) rules, introduced in 2021 to prevent clubs from securing inflated sponsorship deals with companies linked to their owners. City challenged these regulations and, as Goldbridge explained, the tribunal found the rules 'not correct,' handing victory to the club. Goldbridge highlighted the significance of this verdict, saying: 'The Premier League have lost that. There are massive ramifications for that.' He pointed out that the decision could enable clubs like Manchester City and Newcastle United to pursue lucrative sponsorship agreements with state-linked businesses, potentially distorting the competitive balance. The Daily Mail's Mike Keegan, credited by Goldbridge during the podcast, first reported the story, describing how the ruling undermines rules designed to curb inflated sponsorships. Goldbridge summed up the implications: 'If Newcastle or Man City feel they've had a deal turned down that would have helped them be more competitive, they could sue for loss of earnings.' The ruling could spark further legal action, with City and Newcastle potentially suing the Premier League for lost earnings over the past three years. Goldbridge warned of 'massive impacts on the future of football' if clubs start claiming compensation, adding: 'This could be massively helpful to rich football clubs and a massive issue for clubs with owners who want to make money.' He also raised concerns about how the decision might impact the league's ongoing investigation into 115 alleged breaches of financial rules by Manchester City. While the two cases are distinct, Goldbridge speculated that City's legal strategy might hinge on exposing weaknesses in the league's governance to undermine the broader case against them. 'Man City will do what many of us predicted – expose the Premier League's weaknesses and potentially negotiate a deal that suits them.' Goldbridge expressed deep concern about the future of the league's competitive integrity if clubs with wealthy owners can inject unlimited funds through related-party sponsorships. 'What's the point of having any football league if you've got one or two clubs throwing billions in while everyone else can't?' he asked, warning that football could become a 'billionaire's playground.' He also questioned the fairness of existing financial practices, pointing out that clubs like Arsenal and Liverpool benefit from shareholder loans at favourable rates. 'If Arsenal and Liverpool can get favourable loans, why can't City and Newcastle get favourable sponsorship deals?' Goldbridge argued, suggesting that the league's rules might have been inconsistently applied. Looking beyond City and Newcastle, Goldbridge voiced concerns about how the ruling might impact other clubs, particularly his own club, Manchester United. He noted that the club's new part-owners, INEOS, have pursued a self-sustaining financial strategy that could now be rendered obsolete. 'If these rules come in and rich owners can get money into their clubs quite easily, then Manchester United's whole strategy just died tonight,' Goldbridge warned. He compared the situation to a local shop competing against a supermarket giant, predicting that financial disparity would grow unchecked. 'Fans should be protesting now because football will become all about who has the richest owners.' Concluding his analysis, Goldbridge painted a bleak picture of the league's future if it fails to respond decisively. 'The Premier League is the best league in the world, the most watched league in the world, but this could be the beginning of the end,' he said. He called for clearer, fairer regulations to prevent excessive financial influence from distorting the competition while acknowledging that the damage might already be done. 'I just don't think the Premier League are competent enough to take on Man City and win,' Goldbridge concluded, suggesting that the league's authority now hangs by a thread.
Telegraph
14-02-2025
- Business
- Telegraph
Man City win legal fight with Premier League – and other top-flight clubs could now sue
Manchester City have won a major victory in the latest round of their legal battle with the Premier League after financial rules enforced between 2021 and 2024 were declared void and unenforceable. An independent tribunal ruled in September that elements of the rules regarding Associated Party Transactions (APT) were unlawful, notably around shareholder loans being exempt from financial calculations, prompting City to declare the entire APT system void. That interpretation has now been upheld for the three-year period which followed the takeover of Newcastle United by the Saudi Arabia Public Investment Fund in 2021, a ruling that could leave the Premier League open to further legal action from impacted clubs. However, this ruling does not relate to new APT rules that were voted in late last year, which attempted to address the unlawful elements, and is now subject to a separate legal challenge from City. The outcome of that challenge, expected later this year, is likely to be critical in determining the extent to which clubs like City or Newcastle can strike major sponsorship deals with companies linked to their owners. This latest ruling is also separate to the charges, believed to total 130, which were issued against Manchester City over alleged breaches of financial rules between 2009 and 2018. The APT tribunal, made up of senior judges Sir Nigel Teare, Lord Dyson and Christopher Vajda KC, held a further two-day hearing last month to decide whether the rules were still valid between 2021 and 2024 without those elements being deemed unlawful and have sided with City in concluding that they are void. Their conclusion, which has been seen by Telegraph Sport, says: 'In the first partial final award it was declared that the APT rules and amended APT rules were unlawful in three respects. 'There now arises for decision the question whether those three respects can be severed from the remaining APT rules so that those remaining APT rules are valid and enforceable. 'The three respects in which the APT rules and amended APT rules were unlawful cannot be severed with the result that the APT rules as a whole are void and unenforceable.' At the time of the first partial final award in October, the Premier League took the findings to be an endorsement of the 'overall objectives, framework and decision-making of the APT system', which is designed to prevent clubs from agreeing inflated sponsorship deals with companies associated with their ownership. In an email to clubs on Friday, Premier League chief executive Richard Masters said: 'The league has previously told clubs that this decision was about the legal status of previous APT rules and would not impact the operation of new rules.' Masters had also informed clubs last week that the Premier League champions had launched a new arbitration to challenge the updated APT rules that came into force in November. 'On January 20, 2025, Manchester City FC began a further arbitration to challenge the APT rules,' he wrote. 'As you will see, the new challenge relates to the amendments to the APT rules that clubs approved at the 22 November 2024 shareholders' meeting. Manchester City FC seeks a declaration that the amendments approved by clubs in November (and therefore the current APT rules in force) are unlawful and void. 'The Premier League remains strongly of the view that the amendments passed in November were lawful and the APT rules comply with all competition law requirements. We consider that the new arbitration must be resolved as soon as possible and, to that end, have agreed that the same tribunal should be appointed to hear the new case. The parties are currently corresponding in relation to further directions. 'The APT rules remain in full force and effect and clubs remain required to comply with all aspects of the system.'
Yahoo
14-02-2025
- Business
- Yahoo
Man City win legal fight with Premier League – and other top-flight clubs could now sue
Manchester City have won a victory in the latest round of their legal battle with the Premier League after financial rules enforced between 2021 and 2024 were declared void. An independent tribunal ruled in October that elements of the rules regarding Associated Party Transactions (APT) were unlawful, notably around shareholder loans being exempt from financial calculations, prompting City to declare the entire APT system void. That interpretation has now been upheld for the three-year period which followed the takeover of Newcastle United by the Saudi Arabia Public Investment Fund in 2021, a ruling that could leave the Premier League open to further legal action from impacted clubs. However, this ruling does not relate to new APT rules that were voted in late last year, which attempted to address the unlawful elements, and is now subject to a separate legal challenge from City. The outcome of that challenge, expected later this year, is likely to be critical in determining the extent to which clubs like City or Newcastle can strike major sponsorship deals with companies linked to their owners. This latest ruling is also separate to the charges, believed to total 130, which were issued against Manchester City over alleged breaches of financial rules between 2009 and 2018. The APT tribunal, made up of senior judges Sir Nigel Teare, Lord Dyson and Christopher Vajda KC, held a further two-day hearing last month to decide whether the rules were still valid between 2021 and 2024 without those elements being deemed unlawful and have sided with City in concluding that they are void. Their conclusion, which has been seen by Telegraph Sport, says: 'In the first partial final award it was declared that the APT rules and amended APT rules were unlawful in three respects. 'There now arises for decision the question whether those three respects can be severed from the remaining APT rules so that those remaining APT rules are valid and enforceable. 'The three respects in which the APT rules and amended APT rules were unlawful cannot be severed with the result that the APT rules as a whole are void and unenforceable.' At the time of the first partial final award in October, the Premier League took the findings to be an endorsement of the 'overall objectives, framework and decision-making of the APT system', which is designed to prevent clubs from agreeing inflated sponsorship deals with companies associated with their ownership. In an email to clubs on Friday, Premier League chief executive Richard Masters said: 'The league has previously told clubs that this decision was about the legal status of previous APT rules and would not impact the operation of new rules.' Masters had also informed clubs last week that the Premier League champions had launched a new arbitration to challenge the updated APT rules that came into force in November. 'On January 20, 2025, Manchester City FC began a further arbitration to challenge the APT rules,' he wrote. 'As you will see, the new challenge relates to the amendments to the APT rules that clubs approved at the 22 November 2024 shareholders' meeting. Manchester City FC seeks a declaration that the amendments approved by clubs in November (and therefore the current APT rules in force) are unlawful and void. 'The Premier League remains strongly of the view that the amendments passed in November were lawful and the APT rules comply with all competition law requirements. We consider that the new arbitration must be resolved as soon as possible and, to that end, have agreed that the same tribunal should be appointed to hear the new case. The parties are currently corresponding in relation to further directions. 'The APT rules remain in full force and effect and clubs remain required to comply with all aspects of the system.' The Premier League spent £45 million on legal costs last season, a figure that is certain to rise further this season. City have separately been defending themselves against the 130 Premier League charges for alleged breaches of financial rules. An independent commission spent 12 weeks last year hearing evidence in relation to the charges, with a verdict in football's so-called 'trial of the century' expected in the coming weeks. City were previously also embroiled in legal disputes with the European governing body Uefa, eventually appealing to the Court of Arbitration for Sport after being suspended from the Champions League for two years for allegedly 'overstating its sponsorship revenue' between 2012 and 2016. In its ruling, Cas overturned the suspension after finding that a number of the claims brought by Uefa had fallen outside a five-year 'time bar' and others were 'not established'. They did, however, still impose a €10 million fine after ruling that City had failed to co-operate with investigators. City have always denied breaching financial rules – whether those of Uefa or the Premier League – and described the CAS judgement as 'a validation of its position'. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
