City vs liiga ensimmäinen oikeustaisto on ainakin selätetty. Osa associated party transactions -säännöistä todettiin laittomiksi. City esim. esitti että korottomat lainat omistajilta ovat verrattavissa sponsorirahaan, eli niihin pitäisi käyttää markkinakorkoa.
Fabrizio Romano
@FabrizioRomano
🚨🔵 Manchester City statement confirm legal win over Premier League after the governing commercial deals between clubs and related companies were declared unlawful.
Mielenkiintoista on mitä tästä seuraa... Jos omistajien lainat tulkitaan tueksi, niin muutama seura on aivan kusessa.
The key facts
Rules deemed unlawful because they did not take into consideration interest-free loans from shareholders to clubs
Likely change in the regulations could lead to City striking more lucrative deals and seeking damages from the Premier League
Clubs with high levels of borrowing now in danger of breaching of Profitability and Sustainability Rules
Arsenal, City’s title rivals, have borrowing of more than £200million made up entirely of shareholder loans
Premier League’s stance was backed by Arsenal, Manchester United, Liverpool, West Ham United, Brentford, Bournemouth, Fulham, and Wolverhampton Wanderers
Manchester City have inflicted a potentially damaging defeat on the Premier League after the rules governing commercial deals between clubs and related companies were declared unlawful.
In a landmark decision that could have huge ramifications for England’s top flight, it was ruled that City were unfairly blocked from agreeing two huge sponsorship deals earlier this year.
It opens the door for the English champions, majority-owned by Abu Dhabi, to strike significantly higher sponsorship agreements with associated parties than previously allowed — including with Etihad, their stadium and shirt sponsor — and to pursue compensation and costs from the Premier League for abusing its position. Other clubs could also now seek damages should they believe they have been impacted.
An independent panel of three retired judges concluded that the rules were unlawful because they did not take into consideration interest-free loans which shareholders lend to clubs. The decision will spark huge concern among a number of City’s Premier League rivals — who rely heavily on such loans — and is likely to lead to the rules being changed.
The panel states that, of the £4billion in total borrowing across the Premier League, £1.5billion is in loans from club owners and shareholders. If the rules are altered and commercial loan rates are now applied to these interest-free loans and have to be included in a club’s profitability and sustainability calculation, many clubs could find they are in breach of Profitability and Sustainability Rules (PSR).
City had argued that such payments were unfair and not at market value because they were interest-free and, in some cases, did not have to be repaid at all. For a club such as Arsenal, with borrowing of more than £200million made up entirely of shareholder loans, that is a potentially seismic development.
Associated Party Transaction (APT) rules were introduced in December 2021 in the wake of the Saudi-led takeover of Newcastle United, and further amended in February this year.
The rules were designed to maintain the competitiveness of the Premier League by preventing clubs from inflating commercial deals with companies linked to their owners. Transactions are independently assessed to ensure they are of “fair market value”.
The Times revealed in June that City had launched unprecedented legal action against the Premier League and argued that the APT rules were contrary to the Competition Act 1998.
While some elements of City’s claim were dismissed, the 175-page partial final award, which has been seen by The Times, found that:
• Some of the new rules brought in by the Premier League earlier this year, which include placing the burden of proof onto clubs to show that deals are of fair market value, are unlawful
• The rules are also unlawful because they do not take into account interest-free loans that shareholders use to inject funds into their clubs
• Both the original and amended rules are procedurally unfair because a club is not given access to comparable deals the Premier League can use to determine fair market value.
The award document was sent to both City and the Premier League on September 25, and yet was only sent on to the remaining 19 top-flight clubs today. Arbitration rules dictate that both parties have to agree before the findings of the panel can be shared but The Times understands the delay was caused by the Premier League rather than City.
As The Times reported in June, City’s legal action divided the top-flight clubs. The ruling document states that Arsenal, Manchester United, Liverpool, West Ham United, Brentford, Bournemouth, Fulham, and Wolverhampton Wanderers submitted evidence that supported the Premier League’s position.
City’s case was heard by Sir Nigel Teare, a retired High Court judge, Christopher Vajda KC, a former judge of the European Court of Justice, and Lord Dyson, former Justice of the Supreme Court, in a two-week private arbitration hearing in June.
The hearing focused on three lucrative sponsorship opportunities with the Etihad Aviation Group, the First Abu Dhabi Bank (FAB) and Emirates Palace.
The panel ruled that the Etihad deal was unfairly blocked earlier this year because City were not given the opportunity to respond to the analysis the Premier League had conducted to benchmark it against comparable transactions by other clubs. City’s present sponsorship deal with Etihad is understood to be worth about £80million per year.
It was also concluded that the FAB deal was unfairly blocked because City were not given access to the sponsorship information submitted by other clubs to a database the Premier League uses to determine fair market value.
The Premier League was found to have breached its own rules by taking an unreasonably long time to reach a decision on the deals with FAB and Emirates Palace, a subsidiary of the Abu Dhabi government which owns the Emirates Palace Mandarin Oriental hotel.
The panel did dismiss some elements of City’s claims with regard to the blocked sponsorship deals, while also making a number of findings in support of the amendments. It was concluded that “was a sufficient evidential basis for the Premier League to conclude . . . that the [old] rules were ineffective in controlling APTs”. The panel stated that “fair market value”, while “not an exact science” was an “inherent” part of PSR and that there was no element of price-fixing nor an unclear criteria.
Nevertheless, the fact the panel ultimately found the rules in their present state to be unlawful is a significant win for City.
The club submitted a 165-page legal document challenging the APT rules. City argued they are the victims of “discrimination” and claimed the rules were approved by their rivals in an attempt to stifle their success on the pitch via a “tyranny of the majority”.
Led by Lord Pannick, the same KC now spearheading City’s expensively-assembled legal team in their defence against 115 Premier League charges for alleged breaches of financial rules, the English champions launched a series of claims against APT regulations, many of which centred on the element that deals had to represent what the league deemed fair market value.
City secured victories in seven key areas. Crucially, the panel deemed the rules to be unlawful, and in breach of competition law “by object”, a serious and damning infringement akin to price-fixing by cartel members.
When it came to the City sponsorship deals, the Etihad verdict was deemed “procedurally unfair” and “must be set aside”. The same verdict was applied to the FAB decision.
City argued that the new APT rules were a consequence of “fear-mongering” after the Saudi takeover at Newcastle. They had also claimed that the rules were specifically aimed at Gulf-owned clubs, citing an email from a Premier League club official. This, however, was dismissed by the panel.
Last month, The Times reported that a proposed amendment to APT rules had been withdrawn from the agenda of a Premier League meeting at the last minute, pointing to a potentially significant victory for City.
Under the stewardship of Pep Guardiola, City have dominated English football by winning six of the past seven Premier League titles and last year becoming only the second team after Manchester United in 1998-99 to land the Treble.
While the APT rules were introduced after the period which takes in the 115 charges, this decision concerns sponsorship deals central to that ten-week hearing, which is now in its third week. The club face vast fines, a points deduction and perhaps even relegation if they lose that case.
But today City are claiming a victory, with ramifications not only for them but all 20 Premier League clubs.
