Manchester City and the Premier League could be on the brink of a new legal dispute if amendments to top-flight sponsorship rules are approved today. Last week, City cautioned against hastily implementing changes to associated party transactions (APTs) rules, which they had previously contested on competition law grounds.
An arbitration panel declared certain aspects of these rules unlawful last month, and City maintain that making alterations before the panel provides further guidance could lead to additional challenges. Despite this, it’s understood that Premier League chiefs are confident the changes are lawful after over a month of consultation, and crucially, they believe the majority of clubs will accept the amendments.
The PA news agency has learned that Wolves are likely to back the league at Friday’s shareholders meeting in central London, contradicting earlier reports that they were among six clubs potentially supporting City, which would prevent the league from achieving a 14-club majority in today’s crucial vote. Sources close to the Black Country club expressed surprise at being named as potential City supporters, given their support for the Premier League when City first challenged the APT rules earlier this year.
Everton are gearing up to side with the Premier League in the upcoming vote, although sources close to the Merseyside club have not provided a definitive stance, they did express that the club backs any measures that safeguard the integrity of the league. Manchester City can count on Aston Villa’s public backing for a postponement, and it’s understood that Nottingham Forest will follow suit.
Villa have pointed to the potential for increased legal costs as a justification for supporting a delay, referencing the over £45m spent last season by the league on rule enforcement. In the lead-up to the vote, both the Premier League and City have reportedly been canvassing clubs to gauge their voting intentions.
Chelsea, Leicester, and Newcastle United might also back City, but even with their support, the champions could fall short of the numbers needed to disrupt the Premier League’s proposals. Earlier this year, The Times revealed that City had criticised the league’s voting system in their original legal challenge against the APT rules, labelling it a “tyranny of the majority”.
Following City’s successful legal challenge which led an arbitration tribunal to declare certain aspects of the APT rules unlawful, the Premier League has been consulting its clubs on rule amendments for over a month.
The league has committed to acting “quickly and effectively” to address the illegal aspects, but City has slammed the Premier League for “misleading” clubs regarding the interpretation of tribunal findings, insisting that all rules should be deemed “void”. The APT regulations evaluate if commercial transactions between clubs and related ownership entities are at fair market value (FMV).
The tribunal ruled it was not lawful to omit shareholder loans from these regulations, which will now be included if amendments go through. The interest rate on existing and future shareholder loans will be scrutinised for FMV, with variations expected across different clubs based on factors like credit scores.
Clubs may have a 50-day grace period to turn such loans into equity if they choose. Further changes are set to reverse modifications made to the APTs in February.
This includes altering the language from “would” to “could” in defining FMV within the rules, potentially giving clubs more flexibility. Additionally, clubs might gain access to the Premier League’s FMV databank prior to decisions being finalised, pending approval of the amendments.
View news Source: https://www.chroniclelive.co.uk/sport/football/football-news/man-city-face-premier-league-30425500
