Premier League clubs are seeking clarity regarding the settlement between the league and Manchester City over financial regulations. The settlement, which saw City accept the validity of associated party transaction (APT) rules, has left rival clubs in the dark about the specific terms and implications. This has led to calls for clarification at the next shareholders meeting. Concerns also surround a potential lucrative sponsorship deal between City and Etihad Airways, previously blocked by the league. The situation unfolds against the backdrop of an ongoing disciplinary case against Manchester City for alleged financial breaches.
Premier League clubs are seeking clarification from the league regarding the recent settlement of a legal dispute with Manchester City concerning rules governing commercial deals. The request for transparency follows Monday's announcement that Manchester City had conceded to the validity and binding nature of associated party transaction (APT) regulations, leading to the termination of legal proceedings between the club and the Premier League.
The APT rules were established to prevent clubs from artificially inflating profits through commercial agreements with entities linked to their owners at values exceeding fair market rates. Manchester City had previously challenged these regulations through legal action, claiming they were unlawful.
However, according to sources within several rival clubs, details surrounding the settlement remain undisclosed, raising questions about the terms and implications of the agreement. This lack of information has prompted some clubs to consider requesting clarification from the league during the upcoming shareholders meeting scheduled for this month.
One senior executive from a Premier League club, speaking anonymously, expressed the prevailing sentiment among many clubs, stating, "It's hard to say anything because we have no idea of the details of the settlement or any implications from it."
Image source, Getty ImagesThe Premier League and Manchester City are awaiting the result of the hearing into 115 charges for alleged breaches of the league's financial rules
Concerns among clubs extend to reports suggesting that Manchester City is poised to finalize a lucrative new sponsorship agreement with Etihad Airways. The Premier League had initially blocked this deal, along with another Abu Dhabi-linked agreement, in 2023 due to concerns over fair market value, leading to Manchester City's initial lawsuit.
Despite speculation that Manchester City has received assurances regarding the approval of the deal, BBC Sport has learned that the agreement would still be subject to a fair market value assessment by the Premier League board. League officials maintain that clubs with state affiliations, including Manchester City and Newcastle United, will not receive preferential treatment in securing approval for commercial deals with companies linked to their owners.
The APT rules were initially introduced in December 2021 following the Saudi Arabian-led takeover of Newcastle United.
Manchester City had previously challenged the rules successfully in 2024, with an independent tribunal ruling against the exclusion of low-interest shareholder loans from the APTs and deeming changes to the regulations as breaches of competition law.
In response, the league amended the rules, albeit against Manchester City's wishes. Subsequently, in February, the club launched a renewed legal challenge, declaring the regulations unlawful and void, thus initiating a new arbitration process.
In the wake of announcing the settlement, Premier League chief executive Richard Masters and chair Alison Brittain have offered to address questions from concerned clubs. However, league officials emphasize that the confidential nature of the agreement limits the extent of detail that can be disclosed.
Notably, there is no indication that this settlement will impact the ongoing disciplinary case against Manchester City for 115 alleged breaches of the league's financial rules. Manchester City denies any wrongdoing in this case, which concluded its independent commission hearing nine months ago but has yet to yield a verdict.
According to sports lawyer Richard Cramer, "The compromise means neither party is a winner or a loser, but ultimately one would imagine Manchester City have come out with a good result in the sense that they can probably now push forward and close off some sponsorship deals at a higher value than perhaps the Premier League would previously have allowed."
Cramer added, "It does mean there is a likelihood Manchester City will be able to spend more money."
He also suggested that the settlement could indicate improved relations between the Premier League and its clubs, stating, "The settlement probably means a better working relationship and maybe this is an indication that the Premier League and the other clubs have indicated enough is enough - it's not a good optic for the clubs to be fighting and at loggerheads with the governing body."
Cramer highlighted the significant costs associated with ongoing arbitrations as a concern for the Premier League, noting, "One of the biggest concerns for the Premier League is the vast expense on legal fees in relation to these ongoing arbitrations. The funding of these disputes has got completely out of control and a big drain on resources from both a management point of view and of course eating into cash reserves."
He concluded by suggesting that even Manchester City, despite its vast resources, may have reached a point where it is no longer beneficial to continue these disputes, stating, "Manchester City have untold wealth behind them to continue with these disputes, but even they may have reached the point of deciding that it's not good for the sport."