Man City tribunal begins as English champions sue the Premier League

Champions Manchester City are involved in a legal dispute with the Premier League (Image: PA Wire/PA Images)

Manchester City’s legal challenge against Premier League financial rules is set to be heard over the next fortnight, a move that could have far-reaching implications for English football’s top tier.

The reigning Premier League champions are contesting the league’s associated party transaction (APT) rules in a hearing commencing on Monday and expected to run until June 21.

It is understood that City will question the legitimacy of these rules under UK competition law. As initially reported by The Times last Tuesday, the club is seeking to abolish these rules, which were first implemented in December 2021 following the Saudi-led acquisition of Newcastle and subsequently reinforced in February.

These regulations aim to ensure that any commercial agreement or player transfer between a club and entities linked to its ownership is conducted at fair market value, preventing the artificial inflation of club revenues.

A successful City challenge to the APT rules could have a big impact on the Premier League (Image: PA Wire/PA Images)

If an arbitration panel deems the APT rules invalid, clubs would essentially have free rein to conduct any commercial deals they desire without any independent assessment of whether those deals represent fair market value.

This could potentially allow clubs to increase their declared revenue and provide them with more flexibility in terms of transfer and wage expenditure under financial sustainability rules.

There are concerns that this could result in clubs with the wealthiest owners such as City and Newcastle effectively operating in a spending league of their own.

The Times has reported that Manchester City’s legal team argued the club faced discrimination and was subjected to “a tyranny of the majority” due to the Premier League’s rules.

Manchester City will defend themselves against 115 charges in the autumn (Image: PA Wire/PA Images)

This contentious claim sparks concerns over a governance crisis within the Premier League, as its rule-making process hinges on a 14-club majority for motions to pass.

According to The Times, about 10 to 12 clubs have shown varying degrees of support for the Premier League in this legal battle, with one even providing a witness statement backing City.

The relevance of these allegations to the separate issue of the 115 charges against City for purported financial rule breaches by the Premier League remains uncertain, with hearings slated for the autumn. City has vehemently denied all charges.

Notably, the Premier League’s Section X, governing the arbitration, does not mandate public disclosure of the outcomes.

Yet, given the high stakes involved, it is widely anticipated that the arbitration panel’s decision will not remain confidential for long. To date, neither Manchester City nor the Premier League has commented on the ongoing situation.