Manchester City have initiated a new legal challenge against the Premier League, focusing on sponsorship rules. The current league champions argue that attempts to modify these rules could be discriminatory.
In November, Premier League clubs voted 16 to four in favour of changing the rules on Associated Party Transactions (APT). These APT rules evaluate whether deals between clubs and entities connected to their ownership represent fair market value.
Newcastle United joined City, Aston Villa and Nottingham Forest in standing against proposed changes to the rules back in November, after the champions' previous legal challenge found some aspects of the regulations to be 'unlawful', but the other 16 clubs voted them in. These regulations, which were first introduced in the aftermath of Newcastle United's takeover, ensure all commercial deals with companies linked to a club's owner are independently assessed to establish they are of fair market value.
However, City's legal team now believe that even the revised regulations are discriminatory. As reported by The Mail, City suspect that rivals including Arsenal would maintain an unfair advantage even with the enforced changes.
The same source reports that the panel which oversaw City's initial complaint about APT rules will rule on City's challenge. The champions have argued that other clubs receive differential treatment, partly because shareholder loans are not subject to the same fair market value tests as commercial deals.
Newcastle remain an interested observer to the legal challenges by City. Richard Masters has insisted that amendments made to sponsorship rules were 'lawful' after Manchester City launched a fresh legal challenge against the Premier League.
The Chronicle reported back in February that Stevie Loughrey, a partner at Onside Law, who specialises in commercial litigation and arbitration, believed the club were being clever in keeping their powder dry.
"Newcastle have been tactically astute to date," he told ChronicleLive. "While they have voted against the APT rules and provided statements in support of Man City’s case against the Premier League, they have not elected to go on the full attack.
"I suspect the club will wish to keep all options open but will only pull the trigger on these sorts of claims if it feels it really has to, for example, because it feels the Premier League’s decision on new submissions it has made are wrong and materially prejudices its position."
This latest challenge from the reigning league champions is separate from the 115 charges faced by City, which are currently under investigation by a disciplinary panel. City, who strongly deny these charges, are still awaiting a final ruling on this issue, reports the Mirror.
Manchester City have voiced their concerns, arguing that the current version of the rules does not "fail to meet the requirements of transparency, objectivity, precision and proportionality ... and are liable to distort competition".
Back in November, the Premier League released a statement regarding updates to the APT regulations: "The amendments to the rules address the findings of an Arbitration Tribunal following a legal challenge by Manchester City to the APT system earlier this year," it read.
"The Premier League has conducted a detailed consultation with clubs - informed by multiple opinions from expert, independent Leading Counsel - to draft rule changes that address amendments required to the system.
"This involves integrating the assessment of Shareholder loans, the removal of some of the amendments made to APT rules earlier this year and changes to the process by which relevant information from the League's 'databank' is shared with a club's advisors.
"The purpose of the APT rules is to ensure clubs are not able to benefit from commercial deals or reductions in costs that are not at Fair Market Value (FMV) by virtue of relationships with Associated Parties. These rules were introduced to provide a robust mechanism to safeguard the financial stability, integrity and competitive balance of the League."
