Man City will ‘blow a big hole’ in FFP charges if they win ATP case as PL warned of ‘serious ramifications’
Man City could “blow a big hole” in the Premier League’s FFP case against them if they succeed in suing the governing body, according to Sky Sports reporter Kaveh Solhekol.
The Times newspaper reported yesterday that Man City are taking legal action against the Premier League as they look to end their Associated Party Transaction (ATP) rules.
Explaining the rules, The Times reported:
‘Introduced in December 2021 in the wake of the Saudi-led takeover of Newcastle United, the rules are designed to maintain the competitiveness of the Premier League by preventing clubs from inflating commercial deals with companies linked to their owners. The rules dictate that such transactions have to be independently assessed to be of “fair market value” (FMV).’
Man City are trying to argue they are ‘unlawful’ and ‘are suing the Premier League for damages, while arguing that the league’s democratic system of requiring at least 14 clubs, or two-thirds of those who vote, to implement rule changes gives the majority unacceptable levels of control.’
The legal dispute will be settled by a two-week arbitration hearing which will begin on Monday June 10 and Sky Sports reporter Solhekol has explained the “unprecedented” situation.
Solhekol told Sky Sports: “What is being reported is unprecedented. We’ve got a situation where a Premier League club, Manchester City, the champions of the Premier League, are basically suing the Premier League.
“What City are going to argue at this arbitration hearing, which will start on Monday, is that some of the league’s financial rules are unlawful and they are incompatible with UK competition law. The rules they are talking about are the Associated Party Transaction rules.
“These were brought in in 2021 and they are designed to make sure that if a club signs a commercial deal with a company that is linked to its owners that it has to be a fair value, and that is checked to make sure that it is of fair value.
“So, if you are the owner of a Premier League club and you have another company, say an airline or an energy company, and you want to get that company to sponsor your club – because that is a good way of bringing revenue into your club – that deal has to be checked by independent auditors to make sure it is of fair value.
“You cannot just make up a number and say the deal is worth £100m, £200m or £300m as a way of bringing money into your club. It has to be of fair value.
“But City are going to argue that these rules are unlawful and obviously, this could have big, serious ramifications for the future competitive balance of the Premier League.”
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Man City are facing 115 charges over alleged breaches of financial fair play rules and Solhekol insists the ATP case outcome could have a massive bearing on the Premier League’s FFP case.
Solhekol added: “The charges and this case are two separate things.
“The 115 charges have been brought by the Premier League against Man City for allegations that they have broken the league’s financial rules over 12 or 13 years.
“The hearing into those charges is set for November but obviously, a lot of those charges are also to do with sponsorship deals, deals that were done with companies that are connected to the owners of Manchester City.
“So, if Man City win this case, which starts next week, that would blow a big hole in the Premier League’s case at the hearing in November about the 115 charges because Man City would have argued successfully next week that some of these rules are unlawful and incompatible with UK competition law.”
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