Manchester City Lawsuit Q&A: What are the APT rules? How will hearing work? What are the implications? | Football news

With Manchester City taking legal action against the Premier League, Sky Sports answers key questions following the unprecedented move, with the hearing starting on Monday.

City are seeking to end the Premier League’s associated party transaction (APT) rules, with arbitration set to last two weeks.

The claim comes amid 115 Premier League charges against City for alleged breaches of financial rules.

A hearing on the charges is set for November, according to the times, which first broke the story of the legal action on Tuesday.

In a special Q&A, Sky Sports News senior reporter Geraint Hughes and football finance expert Kieran Maguire answers all the important questions about City’s legal action against the Premier League…

What are the related party transaction (APT) rules?

Hughes: “It’s all about the money and commercial revenue brought in by a club. In this case, it is commercial income that the club receives from a company related to that club.

“The best example of this is Manchester City who have a sponsorship deal with Etihad Airways, which has links to the club’s owners in Abu Dhabi.

“In the Premier League playbook, the way a fair price is determined for commercial income such as sponsorship is through an independent company. They set a parameter, they look at that business, they investigate it, they interrogate it, they audit it and they will see if that business is valid. correct or not.

“What Man City are saying is that it’s unfair. It’s anti-competitive. It’s anti-business. It’s not in line with UK commercial law.

“They argue that there shouldn’t be a statutory rule and you should be able to bring in what you find from that sponsorship.”

Why did the Premier League implement APT rules?

Maguire: “The Premier League confirmed the new rules in February, but this follows on from rules that were introduced shortly after Newcastle were acquired by Saudi Arabia’s Public Investment Fund.

“This appeared to be a knee-jerk reaction from Premier League clubs who were concerned that Newcastle would sign commercial deals with Middle Eastern partners and sponsors who would be at the top end of the scale and therefore give them a competitive advantage.

“That was seen to some extent as effectively shutting down Newcastle’s ability, and Manchester City were keen observers at the time. They weren’t keen on the rules then and now they’re moving a few years later to see how things will turn out in the future. .”

Why did Man City go so far as to sue the Premier League?

Maguire: “Manchester City feel they have historically been disadvantaged – as have many clubs. We have had spectacular success in the Premier League, which has enabled the creation of global brands such as Manchester United, Liverpool, Chelsea and so on.

“If Manchester City want to be competitive with those clubs, they have had to go down the commercial route and with the assistance of the owners, as opposed to building a global fan base first and maintaining it.

“City also feel they have a disadvantage being in Manchester. They will point out that ticket prices at Etihad are much cheaper than at London clubs because London is a bigger tourist market and has a higher price tag and can therefore compete. on the commercial side of things it gives them the opportunity to be at the top table, where they want to be.

“I’m not saying they want to be ahead of the competition, but on par with them, otherwise you’ll end up with a duopoly. Now we probably have a Big Seven, given the takeover of Newcastle.”

What do the other Premier League clubs think about this?

Hughes: “We find that the majority of the Premier League are actually in favor of supporting the Premier League’s position on the APT rules.

“In fact, one Premier League executive said that if those rules were dropped then it would be like the Wild West – the idea that a club’s capacity would be unlimited for things like player transfers or player wages and you couldn’t control that.

“The Premier League will fight this vigorously.”

How will the hearing work?

Hughes: “Arbitration, in its simplest form, can be used in many ways between companies, individuals and employers. In this case, it’s a dispute about the rules and it’s a way to avoid court.

“It could end up in court but essentially what happens is that Manchester City is the plaintiff and the Premier League is the respondent and this arbitration panel will have someone who is effectively acting as a judge.

“It doesn’t happen in a courtroom. It can happen in any room anywhere in the country. But the meeting, however long it lasts, effectively becomes a courtroom.

“They will hear arguments from both sides. Manchester City and the Premier League will present their positions, they will hear evidence from witnesses who are brought by both sides. Either written or oral – that is determined by the arbitration panel.

“It is independent and their decision is called a ruling. It is legally binding, but arbitration is a way to keep things out of court. If it is not satisfactory to either party, then going to court is an option.

“As for when a prize will be awarded, then that is literally how long a piece of string is. It could be quick or it could be very long.”

What do Man City have to prove for their complaint to be justified?

Maguire: “The City had to demonstrate that extending the rules within these associated parties was anti-competitive and prevented them from going into the Middle Eastern and other international markets to negotiate contracts and sponsorship deals.

“City’s argument is that the rules in their current form can take many months to sign and therefore their potential partners will go elsewhere – LaLiga, Bundesliga, Serie A – because City will say they are in a market competitive global for trading partners. “

What could be the implications of this legal action?

Hughes: “If City lose this, then they can go to court, which will be even more expensive and even more time-consuming than that.

“If they’re successful, it could mean there wouldn’t be a Premier League rule in the Premier League handbook about it. That’s a possibility, but if they’re not successful, it stays in the rules and it goes to a majority vote, which requires that 14 of the 20 clubs to vote in favor of something to adopt a new rule or regulation”.

If City lose this legal battle, could that open the door to a European Super League?

Maguire: “Manchester City have always been very reluctant partners among the six clubs that initially chose to join the European Super League. If, however, they lose this case and feel that their position in the Premier League has been disadvantaged to such an extent that they may look at other alternatives, that is a business decision to make.

“There is no indication from City that it is a route they would consider. They were one of the first clubs to drop out of the European Super League when it started to collapse.”

Could an independent football regulator have an impact on a case like this?

Hughes: “The short answer is yes and no, because it depends on what kind of independent regulator English men’s football gets. You could get an independent-lite, which is not interventionist at all, allows the Premier League to set its own financial rules and allows those clubs to work within it.

“Or there’s a regulatory body that could step in quite heavily and in that case have a say in the rules that are set by the Premier League.”

Is this lawsuit related to the 115 charges?

Hughes: “They are completely separate. However, this is the legal world and there are gray areas, so if there is a ruling from this arbitration panel in favor of Manchester City or the Premier League, then the lawyers will argue that could have anything to do with some of these 115 charges.”