Manchester City has secured a significant legal victory against the Premier League as judges ruled certain sponsorship rules unlawful. This landmark decision found that regulations aimed at curbing clubs from inflating deals with owner-linked companies violate the Competition Act.
The ruling, distinct from City’s ongoing 115 charges for financial breaches, raises concerns among rival clubs.
The tribunal’s 175-page report criticized the Premier League’s Associated Party Transaction Rules for excluding shareholder loans, breaching the Competition Act’s sections 2 and 18.
The ruling also revealed that clubs like Arsenal, Manchester United, Liverpool, and West Ham provided evidence supporting the Premier League, alongside Brentford, Bournemouth, Fulham, and Wolves.
The panel, which included esteemed judges, found the Premier League’s rules unlawful because clubs were not allowed to comment on other deals that influenced the Premier League’s valuation of agreements.
The ruling deemed the rejection of City’s sponsorship deal with Etihad as “procedurally unfair,” citing City’s lack of opportunity to respond to the Premier League’s analysis.
Additionally, the handling of a deal with First Abu Dhabi was criticized for not providing City with details from transactions with other clubs.
Manchester City argued that the rule changes stemmed from “fear-mongering” following the Saudi takeover of Newcastle and claimed the regulations targeted Gulf-owned clubs, although the panel dismissed this assertion.
While the panel upheld some amendments to the Premier League’s rules, they rejected most of City’s claims, affirming that Fair Market Value (FMV) is a fundamental aspect of financial regulations.
The ongoing case against City regarding 115 alleged financial breaches could result in significant fines or relegation if they are found guilty.
Despite the ongoing challenges, the ruling is viewed as a substantial setback for the Premier League and could set a crucial precedent in future disputes.
