Manchester City have launched a fresh legal challenge against the Premier League’s sponsorship rules in the latest escalation of English football’s civil war.
City have begun arbitration proceedings over the league’s associated party transaction rules, which were amended in November after the club succeeded in getting some of them deemed “unlawful”.
The Premier League champions had threatened further action if changes were “rushed” through to rules designed to prevent money being pumped into clubs via sponsorship deals with related parties that exceeded their true market value.
City argued that the previous ruling rendered those rules null and void but were defeated in a vote of clubs in November to amend clauses that had been deemed unlawful.
They launched their latest legal challenge last month while they and the league await clarification from the panel which made that decision over whether those changes were sufficient to address its ruling.
Its findings are expected this month, before a separate verdict over the more than 100 charges City face for alleged historic breaches of the Premier League’s financial rules.
The latest development was revealed by the league’s chief executive, Richard Masters, in a letter to clubs on Thursday afternoon.
He wrote: “On January 20, 2025, Manchester City FC began a further arbitration to challenge the APT rules. “As you will see, the new challenge relates to the amendments to the APT rules that clubs approved at the 22 November 2024 shareholders’ meeting. Manchester City FC seeks a declaration that the amendments approved by clubs in November (and therefore the current APT rules in force) are unlawful and void.
“The Premier League remains strongly of the view that the amendments passed in November were lawful and the APT rules comply with all competition law requirements. We consider that the new arbitration must be resolved as soon as possible and, to that end, have agreed that the same tribunal should be appointed to hear the new case. The parties are currently corresponding in relation to further directions.
“The APT rules remain in full force and effect and clubs remain required to comply with all aspects of the system.”
Masters also told the clubs that the Premier League and City attended a two-day hearing last week before the same tribunal “to make submissions in relation to the impact of the tribunal’s first award”.
One of the focuses of City’s latest legal challenge is shareholder loans and whether the inclusion of them under the amended APT rules go far enough in forcing the league to take clubs’ use of them into account versus City’s different ownership model.
In October, City’s general counsel, Simon Cliff, wrote to clubs accusing the Premier League of “misleading” clubs and dismissing its interpretation of the original tribunal’s verdict as “not correct”.
“We will be writing separately about this to the PL but in the meantime, given the findings in the award, this is the time for careful reflection and consideration by all clubs, and not for a knee-jerk reaction,” Cliff wrote. “Such an unwise course would be likely to lead to further legal proceedings with further legal costs.”
Aston Villa, Newcastle United and Nottingham Forest joined forces with City in an attempt to prevent amendments to the rules being brought in but they were defeated by the other 16 clubs.
