MANCHESTER CITY have reached a settlement with the Premier League regarding their APT rules case.
The Etihad club challenged the new “Associated Party Transaction” rules approved despite a threat of legal action by the top flight clubs in November.
GettyManchester City announced the outcome of their case[/caption]
City launched their legal claim in February, arguing the new regulations, designed to curb the amount clubs could receive in sponsorship and other income from companies they are associated with, were “unlawful”.
The club wanted an Arbitration Tribunal, set top convene to hear the case next month, to declare the rules “void”.
But a surprise statement issued simultaneously by the league bosses and the club said: “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.”
City had engaged super lawyer Lord Pannock KC to conduct their arguments with the club making a particular reference to revised rules on “shareholder loans” made to clubs by owners and directors.
Soon after the contentious vote – which saw Chelsea and Manchester United switch sides and only Aston Villa, Nottingham Forest and Newcastle voting alongside City against them – the previous version of the rules was declared “invalid” by senior lawyers.
But Prem bosses were insistent, despite City’s challenge, that the revised rules had superseded the previous ones.
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GettyMan City have a wide-ranging deal with Etihad Airways[/caption]
They saw tweaks to not only shareholder loans – often at low or zero interest rates – but also the process by which the League’s “databank” of financial information was shared and a wording change to some amendments.
City’s acceptance of defeat in their attempts to overturn the regulations will be seen as a significant victory inside Prem headquarters.
Simon Cliff, City’s general counsel, had warned rivals that the Premier League’s interpretation of the tribunal’s ruling was “not correct” and suggested further legal action would likely follow.
City claimed the option for owners to convert shareholder loans of up to £400m-plus into equity stakes was also unlawful, giving rivals an unfair advantage.
They specifically pointed to Arsenal, where such loans stood at £259m in 2022-23, Brighton, Everton and relegated Leicester as examples of clubs handed an unfair advantage.
City’s stance was that unconverted loans were subject to a “discriminatory” Fair Market Value test because clubs in receipt can retain the loans without paying market rate interest over a three-year cycle.
But that attempt to further embarrass Prem boss Richard Masters has now fallen flat.
The case is separate to the ongoing allegation of “115” breaches of financial rules – actually 130 charges – of financial impropriety which City have vehemently and consistently denied, with the judgement from a three-man commission eagerly awaited.
GettyEtihad previously agreed a 10-year £400million deal with City in 2011[/caption] Creator – [#item_custom_dc:creator]
