Advertisement

Man City sue Premier League in case that could decide fate of 115 charges

Manchester City lift the Premier League trophy - Man City sue Premier League in case that could decide fate of 115 charges

Manchester City claim they are victims of “discrimination” from rival clubs in an unprecedented legal action which could ultimately undermine the Premier League’s 115 charges against the champions.

A two-week private arbitration hearing launched by City into the league’s “associated-party” financial rules on Monday will see the club argue they were targeted by a “tyranny of the majority”.

Should City succeed in their claim that the rules are unlawful, the precedent could significantly weaken the financial-breach case against them this autumn.

Rival clubs believe defeat for the Premier League in the landmark case next week would eventually lead to the end of any meaningful financial controls in the competition.

The Telegraph was among outlets in February to report that a case was expected after other clubs voted through a strengthening of the terms first implemented in 2021 to ensure fair-market value on sponsors and transfers.

Those previous rules were launched amid concern over the Saudi Public Investment Fund takeover at Newcastle United and the initial Football Leaks allegations of off-the-book payments at Abu Dhabi-owned City.

The Times newspaper, however, has now obtained full details of City’s behind-closed-doors case against the associated party transaction (APT) rules.

According to the newspaper, City argue that they are the victims of “discrimination” because rivals want to stifle their success in a “tyranny of the majority”.

City seeking damages ‘for losses’

The club reportedly accuse rival clubs of “discrimination against Gulf ownership”, citing the comments of one particular senior club executive. City have appointed three KCs – Lord Pannick, supported by Paul Harris and Rob Williams, to lead the case.

City are seeking “damages for the losses which it has incurred as a result of the unlawfulness of the FMV [fair market value] rules”, their case says, adding that the aim is led by rival clubs to “safeguard their own commercial advantages”.

The rules were “deliberately intended to stifle commercial freedoms of particular clubs in particular circumstances, and thus to restrict economic competition”, the claim reportedly says.

“There is no rational or logical connection between a club’s financial non-sustainability and its receipt of revenues from entities linked to ownerships,” City state.

City filed their claim, which includes a demand for damages, on February 16, around a week after club shareholders voted through a toughening of the rules.

The other 19 top-flight clubs have been invited to participate in the legal action, with 12 already stepping forward to support the Premier League’s defence, it is claimed.

Competition executives had narrowly won approval in February to strengthen terms first implemented in 2021 to ensure fair market value on sponsors and transfers.

Twelve clubs finally backed the changes, with two abstaining. “It’s hardly an endorsement,” added one dissenting executive.

“Following a full review of the existing associated-party transactions rules and fair market value assessment protocols, clubs agreed to a series of amendments to further enhance the efficiency and accuracy of the system,” the league said.

Teams with close partnerships with other clubs internationally – such as Chelsea, Newcastle, City and Manchester United – had most at stake from a redrafting in the rules. City had been among eight clubs to vote down a temporary ban on loans between connected teams for January at the last meeting of the competition.

City contesting profit and sustainability charges

The 12-strong global City Football Group is the biggest empire in the game, but other English club ownerships are looking to follow suit.

City are separately contesting profit and sustainability charges, with a hearing taking place in October or November. The charges against City, who deny wrongdoing, include 54 failures to provide accurate financial information from 2009-10 to 2017-18, 14 failures to provide accurate details for player and manager payments from 2009-10 to 2017-18, five failures to comply with Uefa’s rules including financial fair play (FFP) from 2013-14 to 2017-18, seven breaches of the Premier League’s PSR rules from 2015-16 to 2017-18 and 35 failures to co-operate with Premier League investigations from December 2018 to February 2023.

Potential expulsion from the league is among available punishments should the club be found guilty. The case cannot go to the Court of Arbitration for Sport (Cas), but either side could appeal, prompting speculation the saga could take years to be resolved.

In a 2020 judgement, Uefa banned City from the Champions League for two seasons and fined them 30 million euros. However, the punishment was overturned by Cas.

The separate legal case against APTs came to light as Premier League clubs prepare to meet in Harrogate on Thursday for their AGM. Manchester City and the Premier League have declined to comment.

Broaden your horizons with award-winning British journalism. Try The Telegraph free for 3 months with unlimited access to our award-winning website, exclusive app, money-saving offers and more.