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Sunday, June 16, 2024

Premier League Faces Legal Attack From Most Dominant Club

  • Manchester City will enter an arbitration period with the Premier League over sponsorship rules.
  • The outcome could alter a November hearing that threatens fines and relegation.
Premier League champion banner outside of Manchester City's Etihad Stadium

Manchester City is one of the most powerful soccer clubs in the world on and off the pitch, and it’s taking legal action against the Premier League to try to keep it that way.

The Times revealed Tuesday that City will start a two-week arbitration period with the Premier League on June 10 to challenge the associated party transaction rules. They require an independent body to review any sponsorships from companies tied to the club’s owners to ensure deals are made at a fair market rate. APT rules were instituted in 2021 with the Saudi-backed takeover of Newcastle United to ensure the new owners wouldn’t inflate deals that would funnel millions into clubs and give them an unfair advantage.

The legal document argues APT rules have made City a victim of “discrimination” by other clubs seeking to limit its success on the field. The team has won four consecutive Premier League titles. The document also describes the rules, which require two-thirds approval or at least 14 clubs to sign off on a matter, as a “tyranny of the majority.”

Next week’s proceedings could alter a November hearing about financial allegations that threaten large fines and relegation from the top flight. City is up against 115 charges, which it has entirely denied, for breaching financial rules and failing to cooperate in a subsequent investigation. Some of those breaches involve sponsorship deals linked to City’s owners in Abu Dhabi, and should the club successfully argue its case this month, it will be much harder for the league to win its offensive in the fall.

City filed its claim Feb. 16, and the Premier League alerted all clubs of the situation March 1, inviting them to participate. According to The Times, at least one club submitted a witness statement supporting City, but between 10 and 12 clubs provided a witness statement or letter with evidence for the Premier League’s side. Other teams support the league’s argument because they don’t want City to have unchecked power to pay players whatever they want and void financial rules designed to ensure a fair playing field.

The Premier League is spending more than £20 million, or roughly $25.5 million, on legal fees for the case, which were about one-quarter of that size a year ago, The Times reported, and has had to spend more time dealing with this claim instead of preparing for November’s hearing.

The Premier League faced another legal battle in March from Leicester City, who also took action against the English Football League, after the relegated club was also accused of financial breaches. But the midsize Leicester City is a much less intimidating opponent than Manchester City, valued at roughly $5 billion.

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