Newcastle United on alert as Man City secure ‘win’ in Premier League sponsorship claim

Manchester City have secured a potentially significant victory against the Premier League in their arbitration proceedings against the league’s Associated Party Transaction Rules. The Times report that City had two sponsorship deals ‘unfairly blocked’ by the Premier League.

City launched a legal action against the APT rules earlier this year on the grounds they were anti-competitive. The Premier League said on Monday afternoon City were “unsuccessful in the majority of (their) challenge” and that the tribunal had determined the APT rules were necessary and pursued a legitimate objective. The APT rules are designed to ensure commercial deals with entities linked to a club’s owners are done for fair market value.

City released a statement saying the tribunal had declared the APT rules “unlawful” and that the league had abused a dominant position under competition law.

The decision by the panel could have huge ramifications for the top-flight with Newcastle United among the clubs that could benefit the most from any changes to rules surrounding APT. The findings can be found online and following the publication of said findings, the Premier League and Manchester City have issued their respective responses:

What the Premier League have said..

A statement released by the Premier League read: “The Premier League welcomes the Tribunal’s findings, which endorsed the overall objectives, framework and decision-making of the APT system. The Tribunal upheld the need for the APT system as a whole and rejected the majority of Manchester City’s challenges. Moreover, the Tribunal found that the Rules are necessary in order for the League’s financial controls to be effective.

“The decision represents an important and detailed assessment of the APT Rules, which ensure clubs are not able to benefit from commercial deals or reductions in costs that are not at Fair Market Value (FMV) by virtue of relationships with Associated Parties. These Rules were introduced to provide a robust mechanism to safeguard the financial stability, integrity and competitive balance of the League.

“The Tribunal did, however, identify a small number of discrete elements of the Rules which do not, in their current form, comply with competition and public law requirements (more information below). These elements can quickly and effectively be remedied by the League and clubs.

“In the meantime, the Premier League will continue to operate the existing APT system, taking into account the findings made by the Tribunal.”

What Man City have said…

A statement released by Man City read: “Following today’s publication of the Rule X Arbitral Tribunal Award, Manchester City Football Club thanks the distinguished members of the Arbitral Tribunal for their work and considerations and welcomes their findings:

- The Club has succeeded with its claim: the Associated Party Transaction (APT) rules have been found to be unlawful and the Premier League’s decisions on two specific MCFC sponsorship transactions have been set aside

- The Tribunal found that both the original APT rules and the current, (amended) APT Rules violate UK competition law and violate the requirements of procedural fairness.

- The Premier League was found to have abused its dominant position.

- The Tribunal has determined both that the rules are structurally unfair and that the Premier League was specifically unfair in how it applied those rules to the Club in practice.

- The rules were found to be discriminatory in how they operate, because they deliberately excluded shareholder loans.

- As well as these general findings on legality, the Tribunal has set aside specific decisions of the Premier League to restate the fair market value of two transactions entered into by the Club.

- The tribunal held that the Premier League had reached the decisions in a procedurally unfair manner.

- The Tribunal also ruled that there was an unreasonable delay in the Premier League’s fair market value assessment of two of the Club’s sponsorship transactions, and so the Premier League breached its own rules.”