Manchester City has launched legal action against the Premier League in an attempt to end the league’s associated party transaction (APT) rules and claim damages for perceived losses from sponsorship deals that were halted by the rules. The hearing is set to take place from 10 to 21 June.
According to the Times1, City contend that they are victims of “discrimination against Gulf ownership” with the rules having been approved by their rivals to stifle City’s success on the pitch. The league’s voting rules provide that 14 of 20 clubs must vote in favour of any proposal in order for it to be adopted. City’s suit claims that the voting system preserves what it calls “the tyranny of the majority”.
In February, the clubs voted to approve tougher rules regarding how ATP deals are valued. Following a review of the existing APT rules and Fair Market Value assessment protocols, the clubs agreed to a series of amendments to enhance the efficiency and accuracy of the system. The ATP rules dictate that ATP deals need to be independently assessed to be of “fair market value”.
Rival clubs fear that if City are successful in setting aside the ATP rules it could allow for clubs to value their sponsorship without independent assessment and therefore vastly boost the amount of money they can raise, allowing them to spend a far greater sum on players than if there had been an independent assessment.
The outcome of this claim may also impact the hearing, set for November, into the 115 alleged breaches by City of the league’s financial rules. This is because, even prior to the February amendments, related party transactions were required to be of fair market value.
1 “Man City launch unprecedented legal action against Premier League”, The Times.
