Premier League champions, Manchester City launch legal action against Premier League over sponsorship rules

Wednesday, June 5, 2024 - Premier League champions, Manchester City are taking legal action against the Premier League over its financial rules to defend their 115 alleged breaches of top-flight regulations.

A case was brought by City against the league and, according to the Times, an independent tribunal has been convened for next week to hear it.

The tribunal is set to last two weeks and comes as both sides are preparing for November’s long-awaited hearing on City’s 115 charges of alleged rule-breaking related to financial fair play.

City’s legal challenge centres on associated party transaction (APT) rules.

APTs, in which clubs strike sponsorship or revenue deals with businesses linked to their owners, have been the subject of scrutiny from the league for some time.

In February clubs voted to approve tougher rules regarding how such deals are valued. A requirement to assess fair market value for APTs has been challenged by City, who have argued it contravenes competition law.

The club are understood to be asking for financial damages from the league for perceived losses from sponsorship deals that were halted by the rules. They argue that the league has not been able to prove that clubs get an unfair advantage from APTs and that it has previously failed to act with the same urgency to control big spending by dominant sides.

In another claim forming part of the suit, City are taking aim at the league’s voting rules. The requirement that 14 of 20 clubs must vote in favour of any proposal in order for it to be adopted has long been hailed as one of the competition’s strengths, meaning that clubs must align behind any change before it is implemented. According to the Times, however, City’s suit claims the voting system preserves “the tyranny of the majority”.

According to its report between 10 and 12 top-flight clubs have responded to a league request for submissions in support of its rules. One club is meanwhile reported to have provided testimony in support of City’s claim.

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