Manchester City wins against the Premier League in court

England’s football champions Manchester City has an important legal victory against the Premier League achieved. An independent arbitration tribunal declared the league’s new sponsorship rules, designed to prevent clubs from artificially inflating their sponsorship deals with owner-affiliated companies, to be unlawful. That from sheikhs Abu Dhabi fed ManCity welcomed the decision.

A panel of retired judges ruled that the Premier League’s rules breached UK competition law. That the league recently signed two sponsorship deals Manchester City including an extensive contract with the airline Etihad blocked, was therefore illegal. ManCity announced that it would demand compensation for the blocked deals. The Premier League may need to revise or scrap its sponsorship rules.

The decision could also have far-reaching consequences for other Premier League clubs operating under similar financial structures, including Arsenal and Brighton, who have received loans from their owners. The Arbitration Court found that Loans from shareholders and owners are not covered by the rules of the so-called “Associated Party Transactions” (APT) and the Premier League these transactions therefore not allowed to regulate.

For the Premier League is that a bitter one Setback. The hearing into the allegations against Pep Guardiola’s club is currently underway. The league throws City financial Violations in 115 cases before. There is no direct connection to the most recent judgment. It was initially unclear whether it could still have an impact on the proceedings. The Associated Party Transactions (APT) rules were introduced in December 2021 as part of the Saudi-led takeover of Newcastle United and were further adjusted in February this year.

As a result of the ruling, Manchester City and other clubs may be able to sign even more lucrative deals with affiliated companies in the future. This would put the Premier League under further pressure to ensure financially fair competition between the clubs, which critics are already missing.