The highly anticipated arbitration hearing between Manchester City and the Premier League is set to begin on Monday, with significant implications for the competition. The Premier League champions are challenging the validity of the associated party transaction (APT) rules, which were introduced in December 2021 following the Saudi-led takeover of Newcastle. Manchester City is seeking to scrap the rules, which are designed to ensure that commercial deals and player transfers between a club and entities linked to its ownership are conducted at fair market value.
The APT rules are a key part of the Premier League’s efforts to maintain financial sustainability and prevent wealthy owners from artificially inflating their revenue. However, Manchester City is arguing that the rules are invalid under UK competition law and are being used to discriminate against the club. The Times reported that City’s lawyers have claimed that the club has been subjected to a “tyranny of the majority” and has been denied fair treatment by the Premier League.
If the arbitration panel rules in favor of Manchester City, it could have far-reaching implications for the Premier League. Without the APT rules, clubs would be free to conduct commercial deals and player transfers without any independent judgment on whether they are for fair market value. This could potentially allow clubs to artificially inflate their revenue and boost their spending on transfers and wages. There are concerns that this could lead to a governance crisis for the Premier League, as the introduction of such rules would grant enormous power to the clubs with the deepest pockets.
Manchester City Challenging Premier League Rules
The Premier League has defended its rule-making process, which requires a 14-club majority vote to approve any motion. However, Manchester City’s claim has been supported by at least one other club, which has submitted a witness statement in its favor. The Times reported that between 10 and 12 clubs have offered some form of support to the Premier League’s defense of the case.
The outcome of the arbitration hearing could also have implications for the separate matter of the 115 charges brought by the Premier League against Manchester City over alleged breaches of financial rules. The club strenuously denies any wrongdoing and is awaiting a hearing on the matter in the autumn.
It is worth noting that the arbitration process is taking place under Section X of the Premier League’s rules, which does not require the outcome of such claims to be made public. However, given the significant implications of the case, it is likely that the ruling will be made public once it is issued.
As the arbitration hearing gets underway, both Manchester City and the Premier League remain tight-lipped on the matter, leaving uncertainty surrounding the outcome and potential implications for the Premier League.
