Yesterday afternoon, Manchester City claimed victory in its case against the Premier League over the blocking of two sponsorship deals relating to the league’s Associated Party Transaction (ATP) rules.
An independent panel found that the Premier League’s ATP rules were in breach of competitive law and standards in two separate instances, although the board “endorsed the overall objectives, framework and decision-making” of the ATP rules.
Manchester City filed a lawsuit against the Premier League in June claiming that the rules were anti-competitive and would ultimately seek compensation after its sponsorship deals with Etihad Group and First Abu Dhabi Bank were blocked unfairly, according to the Premier League champions.
Under ATP ruling, which was introduced in 2021 off the back of the Saudi Public Investment Fund’s acquisition of Newcastle United, clubs and all encompassing players and staff are to send associated party dealings to the league to be reviewed to assess if this falls in line in what it regards as ‘fair market’.
The rules are implemented to ensure that clubs are not artificially inflating sponsorship details and revenues with companies or associated parties that are tied to the club. Manchester City ultimately came under the crosshairs of the Premier League due to the Etihad Group being majority owned by the Adu Dhabi sovereign wealth fund ADQ.
However, Manchester City argued that up to 25 of the policies that make up part of the ATP rules were against competitive law and thus began challenging the league on its financial regulations, as the independent board’s verdict will have a profound impact on the league’s rules and regulations moving forward.
ATP rules unlawful due to two key reasons
The independent panel ultimately agreed with Manchester City that the ATP rules were indeed unlawful as it failed to extend the scope of its regulations to oversee shareholder loans and also found that its amendments to ATP laws also came into conflict with competitive law.
The tribunal also agreed with the club that its deal with Etihad Group was unfair due to the procedural proceedings from the Premier League as Manchester City was unable to submit transactional details before a judgement could be made.
A brief from the 175-page verdict document read: “The APT rules and Amended APT rules are unlawful because they are procedurally unfair – clubs are unable to comment on comparable transaction data used by the Premier League to determine fair market value.
“There was an unreasonable delay of about three months for a decision on City’s deal with First Abu Dhabi Bank. There was an unreasonable delay of about two months for a decision on City’s deal with Emirates Palace.”
Both Manchester City & Premier League claim victory
Manchester City viewed this as a victory and firmly stated that the “Premier League was found to have abused its dominant position”.
A statement from the club read: “The Tribunal found that both the original APT rules and the current, (amended) APT Rules violate UK competition law and violate the requirements of procedural fairness.
“The Tribunal has determined both that the rules are structurally unfair and that the Premier League was specifically unfair in how it applied those rules to the club in practice.
“The rules were found to be discriminatory in how they operate, because they deliberately excluded shareholder loans. The tribunal held that the Premier League had reached the decisions in a procedurally unfair manner.”
Despite two elements of its ATP rules being found to be unlawful, the Premier League also claimed victory as it believed that Manchester City were “unsuccessful in a majority of challenges”.
The top-flight English league stated that it welcomed the findings whilst acknowledging the tribal identified 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,” the Premier League added.
Will the verdict impact the 115 hearing?
Not to be confused, Manchester City and the Premier League’s battle over ATP rules is not a part of the 115 charges placed against the club by the league.
The hearing over those aforementioned charges has already proceeded but as the club has identified two key flaws in the ATP rules, Manchester City may feel confident in its bid to defend itself from various financial violations alleged by the Premier League.
