Manchester City and Premier League settle legal row ahead of trial
Manchester City and the Premier League have agreed a settlement that brings to an end their long-running dispute over associated party transaction (APT) rules.
The dispute was set to go to trial as part of an arbitration process next month, following a legal challenge to revised APT rules launched by the club in January.
As part of the settlement, City have agreed to abide by the current version of the rules. Neither party has revealed any further details of the deal, which comes as football awaits a decision in the separate case of the Premier League bringing more than 100 charges against City for alleged breaches of spending rules.
“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,” the club said.
“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.”
It is reported that the settlement could pave the way for City to announce a new long-term partnership with main sponsor Etihad Airways, whose ownership is also Abu-Dhabi-based.
What are APT rules and what was the row?
APT rules were conceived to prevent clubs artificially inflating their spending power and introduced in 2021 amid concerns that Newcastle United could be flooded with favourable commercial deals from companies that shared their Saudi ownership.
As part of the Premier League’s wide-ranging case against them, City have been accused of receiving funding from their Abu Dhabi-based owners disguised as generous sponsorship deals with related companies.
City partially succeeded in a challenge to the original APT rules, with a tribunal last year finding them to be unlawful on multiple grounds.
One of the key issues highlighted was that shareholder loans were not assessed for fair market value in the same way as commercial deals with related parties but could still afford some clubs an unfair advantage.
The Premier League consulted with clubs on amendments to the rules, with 16 teams voting in favour of the new regulations at a meeting last November.
But City brought a fresh challenge two months later, forcing the Premier League to shelve plans to overhaul its spending rules by replacing the controversial PSR (profitability and sustainability regulations) regime with a new squad cost ratio and so-called anchoring.
However, that too faces a legal challenge as player union the PFA argues that anchoring – in which the spending of the richest clubs is tied to the income of the poorest – represents a de facto salary cap and is therefore anti-competitive.