Manchester City reach settlement over legal challenge with Premier League

Manchester City and the Premier League have reached a settlement over Associated Party Transaction (APT) Rules, which govern clubs’ commercial deals and restrict their ability to sign sponsorship deals with companies linked to their ownership.

The two parties emphasised that City have now accepted that the current APT Rules are “valid and binding.”

The settlement ends a legal challenge between league and club after the Citizens launched a third case against the league in February. An initial battle over APT rulings last October ended with City claiming victory, with an arbitration panel judging some aspects of the existing system to be unlawful, particularly significantly ruling that shareholder loans to their own clubs should be included within the regulations.

The rules were amended in November in response to that tribunal ruling after a vote was passed among Premier League clubs, with City – who voted against the new regulations – then writing to the league asking for further arbitration over the changes.

The APT rules were introduced in December 2021 to maintain competitive balance within the league, ensuring that deals struck between clubs and companies linked to the club’s owners are done at fair market value. City argued the rules breached competition law.

This second dispute over APT rules is not related to the major financial case with City, which concerns more than 100 charges. A ruling in that case is still to emerge, with no conclusion expected until at least next month.

A joint-statement from both Manchester City and the Premier League reads: “The Premier League and Manchester City FC have reached a settlement in relation to the arbitration commenced by the club earlier this year concerning the Premier League’s Associated Party Transaction (APT) Rules and as a result the parties have agreed to terminate the proceedings.

“This settlement brings an end to the dispute between the parties regarding the APT Rules. As part of the settlement, Manchester City accepts that the current APT Rules are valid and binding.

“It has been agreed that neither the Premier League nor the club will be making any further comment about the matter.”

A neutral language was naturally used in the statement jointly used by both parties, it is understood there has been some internal debate about the significance of the outcome. Some senior figures at other clubs believe it is a victory for City – and City alone – that they are getting the Etihad deal through, and has the potential to “drive a coach and horses through the new rules”. This is disputed elsewhere, however, due to the insistence that any deal has to go through the Fair Market Value process. It has also been agreed that City will step back from the challenge over interest-free shareholder loans, which had the potential to cause chaos for the Premier League.