The thing that everybody has in common when it comes to legal battles between Manchester City and the Premier League is a desire for a line to be drawn under it all.
There are extremely polarised views over the 115 charges: City’s rivals may want them “wiped from the face of the Earth”, as Pep Guardiola put it recently, whereas the club are hoping for, possibly expecting, a huge victory. Everybody wants to know which of the two outcomes it will be.
It most likely will not bring an end to the arguments but, at some stage, there will have to be an actual winner. A losing party cannot spin, for example, exoneration or relegation.
The issue with Monday afternoon’s verdict from City’s legal challenge to the Premier League over associated party transaction (APT) rules is that there was room for both sides to claim victory. Even trained legal professionals could not reach a consensus on who had got the better of things, if anybody.
On Monday, a Premier League statement said that City were “unsuccessful in the majority of its challenge. Significantly, the tribunal determined that the APT rules are necessary, pursued a legitimate objective and were put in place to ensure that the profitability and sustainability rules (PSR) are effective, thereby supporting and delivering sporting integrity and sustainability in the Premier League”.
City had released their own statement highlighting the five significant blows they had landed on the league, and actually provided a direct link to page 164 of the independent panel’s document, which summarises the independent panel’s findings to back up their stance — although it is almost impossible for anybody, especially a layman, to understand it without the context of the other 174 pages.
City are the first club to win the English league title in four successive seasons (Jess Hornby/Getty Images)
On Tuesday, there was another development: City are so sure that they didn’t just win, but win convincingly, that they wrote to the league and the 19 other clubs in the division to insist that the Premier League’s version of events is wrong.
In that letter, City say that a statement released by the league on Monday afternoon “is misleading and contains several inaccuracies” and “is a peculiar way of looking at the decision”.
The club’s executives also conveyed their concern that the league intends to update its rules within 10 days — one of the fundamental reasons that City brought the case against the league’s APT rules in the first place was that they felt the legislation, adapted in 2021, was done in a hurry.
“The tribunal has declared the APT rules to be unlawful,” City’s second statement reads. “MCFC’s position is that this means that all of the APT rules are void, and have been since 2021. In recent correspondence, the Premier League agreed with MCFC that this is an issue that will need to be resolved by the tribunal. It is, therefore, remarkable that the Premier League is now seeking to involve the member clubs in a process to amend the APT rules when it does not even know the status of those rules.”
While the hearing into the 115 charges goes on, City’s rivals are hardly going to take that at face value.
Privately, the Premier League has said it completely rejects City’s assertion that their findings are misleading, although it is thought that there are no plans to vote on any of the findings at next Thursday’s league meeting.
That is one of the problems when it comes to finding answers here: a 175-page document is available to the public, but your average person (or journalist) will not have the appetite or stamina, let alone understanding, to digest it all properly.
There are far more people who have already made up their minds that no matter how convincingly either City or the Premier League put their case across, it is not going to move the needle too far. That is likely to be a factor even after the 115 charges are dealt with — not everybody will accept the final decision — but at least there will be evident winners and losers.
With the APT case, there is still ample room for claim and counter-claim.
City are right that they had some big successes, even if a lot of their arguments were dismissed. When the legal challenge came to light in June it was reported that they had submitted to the panel that ticket prices would need to go up because of the impact of APT rules, something that rubbed fans of the club up the wrong way in the first place, and gained no traction during the hearing.
There can be no doubt, though, that the panel stated that the Premier League’s laws are, in places, unlawful and unfairly applied, specifically when it came to City, and that is a major victory for the club. Two previous Premier League decisions on Abu Dhabi-based sponsors were also voided (a third was dropped before the hearing) because the league took too long to act.
With City insisting in its letter that all of the APT rules are now void, it plays into the idea that the club launched the legal challenge in a bid to scrap the rules entirely and have nothing replace them. The insinuation from some rivals being that City could and would inflate sponsorship agreements to help circumvent spending rules.
Although City had a long list of issues with the rules — how they were written, the scope of them, how they were applied, their implications, why they were brought in in the first place — and certainly seem very keen to point out that the rules are no longer valid, they do not expect or even hope for a Wild West scenario where anything goes. They still expect regulation, just in a different guise.
It is not clear what that guise would be, but given City were unhappy with how long the Premier League’s procedures took to analyse sponsorship deals, how costly the regulations were for clubs, how broad the league’s definitions became when looking at sponsorship deals (the rules changed from ‘related’ parties to ‘associated’ parties in 2021, and the word ‘evidently’ was also dropped when it came to determining what was fair market value), it is fair to say they wanted a model more in line with previous regulations — in place between 2013 and 2021 — and the current UEFA regulations that clubs would have to adhere to regardless of the ruling on Premier League rules.
Manchester City vs the Premier League
One undisputedly big win for City relates to the finding over shareholder loans.
Part of the reason City successfully argued that the APT rules were unfairly applied was that they pointed out that the Premier League ignored instances where owners have loaned money to their clubs.
Deals between, say, Middle Eastern-owned clubs and Middle Eastern sponsors are heavily scrutinised, but clubs that simply receive money from their owners — which would be repaid, sometimes without interest — were not considered a problem.
That issue is now in the spotlight, and it is easy to imagine City laughing their backsides off at the thought that several of the clubs that have pushed for them to be punished in recent years could now be at risk of breaching spending rules themselves.
For those who mistrust City, it may be a bitter pill to swallow but the club undeniably have a point here: loans obviously have to be repaid, but clubs that receive them can benefit from financial relief on very agreeable and often flexible terms. That surely has to be factored in when thinking about PSR.
As the panel found, the “effect on competition is the same whether the money is received transparently from the owner or in a non-transparent way from a third party”.
Given so many clubs could be affected (nine have received loans from their owners) and a majority of 14 clubs need to pass a motion, it is hard to imagine what the regulations would look like, however. It is like turkeys voting on how they want Christmas to be delivered.
There is also a subtle but pretty significant piece of legalese in the verdict, too. The panel found that, by overlooking shareholder loans, the Premier League were found to have breached competition law ‘by object’. This means that the league actually set out to do it, rather than did it by accident. It is similar when it comes to abuse of power by the league.
The verdict also opened up the potential for City and other clubs to pursue damages from the Premier League relating to any deals that were unfairly recalculated, which might not result in eye-watering sums being handed over, but could prove another industrial-sized can of worms.
The Premier League has already spent significant sums on legal fees with other clubs in the recent past, and while much is understandably made of the amount that City can and will spend on legal counsel, the league has found itself outmanoeuvred by Everton and particularly Leicester City, despite those clubs using a significantly cheaper team of lawyers.
Another thing that Monday’s verdict proved was that this was far from a frivolous appeal by City. When news of the legal challenge came to light in June, it was regarded by many as the end of football as we know it, a diabolical flexing of the muscles by the Premier League champions to show that they would stop at nothing to get the bigger win later down the line.
City will certainly throw their full weight behind their bid to beat the Premier League over the 115 charges, but the APT verdict shows that City had genuine reasons for bringing the case in its own right. Not all of their arguments were accepted, but some important ones were upheld and any tweaks to rules relating to shareholder loans could actually make the league fairer overall — as well as delight City’s executives.
The wait for the big winners and losers goes on.
(Top photo: Robbie Jay Barratt – AMA/Getty Images)
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