Manchester City and Premier League both claim victory after ruling over associated party transactions released

The Premier League and Manchester City are both claiming victory after the ruling of their arbitration case was made public on Monday.

City challenged the Premier League over its associated party transaction (APT) rules, which are designed to secure the competition's balance, on the grounds that they were anti-competitive. Both sides welcomed the finding with the Premier League stating that the arbitration panel had "upheld the need for the APT system as a whole and rejected the majority of Manchester City's challenges."

City, meanwhile, said that the tribunal had found the APT rules to be unlawful with two specific decisions from the Premier League set aside. They also said that the panel had found that the APT regime, "violate UK comPetition law and violate the requirements of procedural fairness," adding that the Premier League had abused its dominant position in the market.

The APT rules govern commercial agreements between clubs and entities linked to their owners and have been particularly in the spotlight following the purchase of Newcastle United by Saudi Arabia's sovereign wealth fund in 2021. Manchester City's ownership group are majority owned by Sheikh Mansour, deputy prime minister of the United Arab Emirates and a member of the Abu Dhabi royal family.

In their findings, the three person panel concluded "that the APT Rules are unlawful on account of being in breach of sections 2 and 18 of the ComPetition Act 1998 because they exclude from their scope shareholder loans and for no other reason". Manchester City argued that shareholder loans were merely another form of associated party transaction, one excluded by the Premier League, who believed that such an approach allowed "transparent investment" by owners.

City's success in that regard may yet have ramifications across the Premier League. Clubs such as Arsenal, Leicester City and Brighton have significant loan debt to their owners. If APT rules were to be altered in such a way that the favorable terms these loans are often provided at were discounted, it would constitute a significant complicating factor in profit and sustainability calculations.

Amends to the APT rules made earlier this year were unlawful, the arbitration panel also found, and the Premier League has committed to changing both these and the shareholder loan exemption. The ruling said that "relief and damages are also sought". Manchester City have been contacted for comment amid suggestions they may pursue damages from the Premier League.

The league said that it had emerged victorious on all but the two counts mentioned above, stating "the tribunal determined that the APT rules are necessary, pursued a legitimate objective and were put in place to ensure that the Profitability and Sustainability Rules (PSR) are effective, thereby supporting and delivering sporting integrity and sustainability in the Premier League.  The Tribunal noted that 'it is difficult to see how the PSR can be effective' without the APT Rules, including the ability to restate transactions."

It would appear that some form of APT regime will continue even if the specific rules will have to change. Any change to those rules would require the backing of 14 of the Premier League's 20 clubs.

This arbitration process exists separately to the other high profile legal case involving the Premier League and Manchester City, the latter defending itself against over 115 breaches of the competition's financial rules. The hearing over those alleged breaches between 2009 and 2018 began in September. City deny all charges.