Manchester City score legal win over Premier League - as financial rules ruled void and unenforceable

Manchester City have scored a legal victory over the Premier League in a long-running battle over financial rules - but both sides have conflicting interpretations of the ruling's significance.

In a case brought by City, an independent panel is understood to have informed clubs that Associated Party Transaction (APT) rules are void and unenforceable, Sky News understands.

The rules were first introduced in December 2021 after the Saudi takeover of Newcastle to ensure commercial deals with companies linked to clubs' ownership were at a fair market value.

They also targeted the revenue that could be raised by Abu Dhabi-backed City from state entities through sponsorship.

City brought the legal challenge after being blocked by the Premier League from advancing new more lucrative deals with Etihad Airways and First Abu Dhabi Bank.

The Premier League champions are owned by UAE vice president Sheikh Mansour.

This new arbitration panel ruling found fault with the Premier League's ability as a regulator to create rules. It follows an initial verdict in October.

The league responded to that by rewriting three areas of the rules found to be illegal and the revisions were passed by a majority of clubs in November.

Most notably, the fair market value of shareholder loans now has to be factored into assessments about the profit and sustainability of clubs which determine how legitimate income is.

The league also ensured clubs would have earlier access to a databank with comparable sponsorship values to assess their deals against.

So Premier League chief executive Richard Masters believes those new rules replaced the ones now found to be void by the tribunal - attempting to underplay the impact of this ruling.

In a statement after the ruling, the Premier League said: "The tribunal's decision has found that the three narrow aspects of the old APT rules, previously found to be unlawful, cannot be separated from the rest of the previous rules as a matter of law. The result, the tribunal has determined, is that the previous APT rules, as a whole, are unenforceable.

"However, the previous APT rules are no longer in place, as clubs voted new APT rules into force in November 2024. This decision expressly does not impact the valid operation of the new rules."

The Premier League added: "The League continues to believe that the new APT Rules are valid and enforceable and is pressing for an expeditious resolution of this matter."

But City are also challenging the legality of the new rules that are designed to prevent the wealthiest clubs from inflating the value of deals to spend more on players and comply with Profit and Sustainability rules (PSR).

Clubs can only lose £105m over three years under PSR - which will remain in place into next season amid legal challenges blocking new regulations.

Read more:
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Why Manchester City are suing Premier League

City are hoping a panel rules for the third time in their favour, arguing that the Premier League amended rules in November that it has now been decided should never have been in place.

And this is all before the verdict is delivered on a far bigger and more consequential case.

A verdict is due imminently into more than 100 alleged breaches of financial rules stretching back to 2009.

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