Manchester City face another legal dispute with the Premier League after amendments to top-flight sponsorship rules were voted through.
City previously warned against making hasty changes to rules on associated party transactions (APTs), having challenged them on competition law grounds.
Last month, an arbitration panel ruled that certain aspects of these regulations were unlawful, with City arguing that making amendments before seeking further guidance from the panel could invite further challenges.
Premier League chiefs remain confident the changes are lawful following over a month of consultation, and decisively, they have now been backed by the majority of top-flight clubs in a vote on Friday.
A long meeting had been predicted by league sources to discuss this topic, however shortly before 9.30am the Premier League confirmed clubs had voted in favour of the rule changes which the league believes now makes them lawful.
This includes adding shareholder loans to the fair market value (FMV) assessment, the removal of some of the amendments made to APT rules earlier this year and changes to how clubs access the league’s databank which is used to make FMV decisions.
talkSPORT understands the vote was incredibly close, with Man City receiving backing from several clubs.
A statement read: “At a Premier League Shareholders’ meeting today, clubs approved changes to the League’s Associated Party Transaction (APT) rules.
“The amendments to the rules address the findings of an Arbitration Tribunal following a legal challenge by Manchester City to the APT system earlier this year.
“The Premier League has conducted a detailed consultation with clubs – informed by multiple opinions from expert, independent Leading Counsel – to draft rule changes that address amendments required to the system.
“This relates to integrating the assessment of Shareholder loans, the removal of some of the amendments made to APT rules earlier this year and changes to the process by which relevant information from the League’s ‘databank’ is shared with a club’s advisors.
“The purpose of the APT rules is to ensure clubs are not able to benefit from commercial deals or reductions in costs that are not at Fair Market Value (FMV) by virtue of relationships with Associated Parties. These rules were introduced to provide a robust mechanism to safeguard the financial stability, integrity and competitive balance of the League.”
The case is unrelated to the 115 charges of alleged rule breaks facing Man City.
The Premier League introduced ATP rules following Newcastle’s takeover, which was facilitated by the Public Investment Fund of Saudi Arabia.
The rules were installed to protect competitive integrity by stopping clubs from artificially inflating commercial deals associated with their owners.
That means that sponsorships must be independently assessed and would only be approved if they are deemed to be of ‘fair market value’.
City had argued the rules discriminated against their ownership by the Abu Dhabi United Group, an investment company for the royal family of Abu Dhabi.
This came after they issued a 165-page claim against the Premier League with a two-week hearing taking place in June.
City now face another hurdle to overcome following Friday’s ruling[/caption]
Man City had been seeking financial damages for losses incurred as a result of the ‘unlawfulness of the [fair market value] rules’.
They claimed that the rules were ‘deliberately intended to stifle commercial freedoms of particular clubs in particular circumstances and thus to restrict economic competition’.
However, Friday’s vote represents a significant defeat for City in their claim against the Premier League.
