Manchester City have raised the stakes in their battle with the Premier League, taking the unusual step of writing to the 19 other top-flight clubs to accuse the Premier League of “misleading” them.
On Monday, City and the league claimed victory in a case relating to rules over associated party transactions (APT). While City pointed to aspects of the rules being declared unlawful in the verdict by an arbitration tribunal, the league noted that the broader verdict endorsed “the overall objectives, framework and decision-making” of the APT system.
City’s email letter disputes the conclusions drawn by the league, claiming they repeat “several inaccuracies”. City’s general counsel, Simon Cliff, wrote in a message to the clubs and the league’s leadership: “Regrettably, the summary is misleading and contains several inaccuracies.
“While it is true that MCFC did not succeed with every point that it ran in its legal challenge, the club did not need to prove that the APT rules are unlawful for lots of different reasons. It is enough that they are unlawful for one reason. In the event, the tribunal found the APT rules are unlawful for three different sets of reasons.”
The City email went on to criticise plans to reform the ATP rules. The league has not commented on the email but said in its response to the verdict that failings in the rules “can quickly and effectively be remedied by the League and clubs”. The league has called an emergency shareholders meeting for next week to discuss plans, though they will not immediately be put to a vote.
Cliff said an imminent change to the rules should be “of even greater concern” to clubs. “Given the findings in the award, this is the time for careful reflection and consideration by all clubs, and not for a kneejerk reaction,” he wrote. “Such an unwise course would be likely to lead to further legal proceedings with further legal costs. It is critical for member clubs to feel that they can have trust in their regulator.
“When the Premier League consulted on and proposed the original APT Rules in late 2021, we pointed out that the process (which took several weeks) was rushed, ill-thought-out and would result in rules that were anti-competitive. The recent award has validated those concerns entirely.
“The tribunal has declared the APT rules to be unlawful. MCFC’s position is that this means that all of the APT rules are void, and have been since 2021.” City’s position is not one held by the league.
Christina Philippou, associate professor in accounting and sport finance at the University of Portsmouth, said the ruling was likely to result in small amendments being made to the APT rules, but that there would probably be a requirement for the league to improve its regulatory practices.
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“Where the case will have implications is on the governance system and the regulation of clubs in the Premier League,” she said. “Expect tighter drafting of rules, more testing of rules in similar cases and an expanded in-house regulatory and compliance team within the league.”
The league has spent more than £50m on legal advice in the past year in fighting cases and assessing its regulatory regime. It may be the case, Philippou said, that the league will have to restructure its strategic approach to regulation as it faces an increasing number of challenges to its rules.
“This would be the most cost effective and efficient way to deal with required changes going forward, particularly given the Premier League’s emerging regulatory role where previously the focus was mostly on the commercial side,” she said.