Manchester City Takes Legal Action Against Premier League Over Sponsorship Rule Changes
Manchester City is challenging the Premier League’s move to alter its sponsorship regulations, claiming the changes are unfair and discriminatory.
Last year, the reigning champions, who have won four consecutive titles, secured a legal victory against previous competition rules. A tribunal ruled that the Associated Party Transaction (APT) regulations, designed to prevent clubs from signing inflated commercial deals with entities linked to their owners, were in violation of competition law.
In November, Premier League clubs voted 16-4 in favor of modifying the existing rules, rather than rewriting them entirely, despite significant objections from Manchester City.
City’s Legal Action
Manchester City’s legal team argues that the updated regulations remain discriminatory and give clubs like Arsenal an unfair advantage. According to the Daily Mail, City contends that the original rules were unlawful because shareholder loans were not subjected to the same ‘fair market value’ test as commercial deals.
The revised APT regulations aim to address this by allowing clubs that have used shareholder loans to convert them into equity within a designated “grace period,” which ended in January. Unlike commercial deals with associated parties, which must wait 30 days before a Fair Market Value (FMV) assessment, shareholder loans can be repaid in full before any such evaluation.
City officials argue that this continued preferential treatment of shareholder loans distorts economic competition between clubs, stating: “This continued preferential and discriminatory treatment of shareholder loans has the object and/or effect of distorting economic competition between Member Clubs on affected markets.”
The club further claims that the current rules lack transparency, objectivity, and proportionality, and could also distort competition. They argue that the changes are legally invalid, as it is not possible to amend rules that are inherently void.
Should City prevail in this legal battle, the Premier League will be forced to reconsider its approach, placing increased pressure on chief executive Richard Masters.
