Why Manchester City won legal case against the Premier League

Manchester City have won a crucial legal battle against the Premier League regarding the league’s financial regulations and club sponsorships.

This victory, decided by a panel of retired judges, challenges the Premier League’s rules on Associated Party Transactions (APT) and could have major implications for how clubs are regulated in the future.

The Premier League introduced APT regulations to ensure clubs do not inflate sponsorship revenues by securing deals with companies that are closely linked to their owners. This rule aims to promote fair competition and maintain financial integrity, especially after high-profile club takeovers, such as Newcastle United’s Saudi-led acquisition.

Under these guidelines, sponsorship deals involving companies tied to a club’s ownership must be approved by the Premier League, ensuring the financial terms reflect “Fair Market Value” (FMV).

In 2023, Manchester City faced scrutiny when two of their sponsorship deals were blocked by the Premier League due to concerns about compliance with the APT rules. City’s owners have long-standing ties to sponsors like Etihad Airways and Abu Dhabi-based companies, which raised suspicions that the deals might not meet FMV standards.

City argued that these rules unfairly targeted them and hindered their growth. The club accused the Premier League of micromanaging their finances and allowing rival clubs, such as Manchester United, Arsenal, and Liverpool, to influence the league’s decisions.

Manchester City’s legal team, led by Lord Pannick KC, contested the Premier League’s decision, calling the APT regulations flawed and biased. The panel of retired judges agreed with City’s position, ruling that the APT regulations breached the Competition Act and were procedurally unfair.

The judgement highlighted that Manchester City were not given a chance to review the Premier League’s analysis before their sponsorship deals were blocked, which made the process even more unjust.

This ruling is expected to reshape how the Premier League enforces financial rules, particularly regarding sponsorship deals with associated parties. While the league maintains that its financial oversight is important, it has admitted that some parts of the APT rules need to be revised to comply with competition laws.

The decision could pave the way for clubs with wealthy owners to secure more lucrative sponsorship deals without interference from the Premier League. It may also serve as a precedent for future financial disputes in English football.

While this victory is a significant win for Manchester City, the club still faces a separate investigation involving 115 alleged breaches of Premier League financial rules, including accusations of inflating sponsorship values and obstructing investigations. Although the recent ruling does not directly affect this ongoing case, it adds further tension between the club and the league.