Man City threaten Premier League with legal action in fresh battle over ownership rules
The Premier League faces a new legal dispute with Manchester City after the club and other rebels failed to stop a tightening in “associated-party” financial rules.
Competition executives narrowly won approval on Friday to strengthen terms first implemented in 2021 to ensure fair market value on sponsors and transfers.
The previous rules were launched amid concern over the Public Investment Fund takeover at Newcastle United and Football Leaks allegations of off-the-book payments at Abu Dhabi-owned Manchester City.
Since then, however, Newcastle have secured major uplifts on sponsorship agreements, including a £25million-a-year front-of-shirt deal with Saudi events company Sela.
However it is City, who are also proposing to purchase winger Savio from a sister club this summer, who are understood to be threatening the league with arbitration, having opposed further curbs with five other clubs.
A potential challenge is seen as significant by legal experts as regulations could play a part in evidence as City fight the Premier League’s 115 alleged financial breaches at an independent hearing.
Sources inside the room at the two-day meeting of clubs in London said new rules, which had previously been put to a vote in November, only passed “by the skin of its teeth”.
A total of 12 clubs finally backed the changes, with two clubs abstaining. “It’s hardly an endorsement,” added one dissenting executive.
It is believed to be the first time a Premier League vote has been decided by 12 in favour to six against.
The possible legal challenge was raised before the as-yet-undisclosed reforms were voted through. One source suggested the potential complaint was not specifically relating to the new changes.
The Premier League, meanwhile, is understood to be confident its new associated-party transaction (APT) rules, intended to ensure a level playing field, are lawful.
“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 and City, as well as Manchester United and Everton if new investment deals are approved – have 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.
It is unclear what fee City will pay affiliated French club Troyes, who signed Savio in 2022 but then loaned him this season to Girona; another team in the CFG empire.
The 12-strong global City Football Group is the biggest empire in the game, but other English club ownerships are looking to follow suit.
Todd Boehly’s consortium in control of Chelsea, also led by Clearlake Capital private equity investor Behdad Eghbali, is also the owner of Ligue 1 club Strasbourg.
Newcastle’s primary owners, the Saudi Public Investment Fund, own four clubs in the Saudi Pro League.
Nottingham Forest owner Evangelos Marinakis also owns perennial Greek champions Olympiakos and is said to have held talks with Portuguese club Rio Ave over potential investment.
Everton are also the subject of a proposed takeover by US group 777 Partners who operate an extensive multi-club ownership strategy across Europe and South America.
Manchester United also have a pending 25 per cent ownership deal with Ineos, which also owns Ligue One side OGC Nice and Swiss Super League side FC Lausanne-Sport. Unlike the other clubs under multi-club ownerships, United did not vote against proposals for a temporary ban on January loan signings.
City are contesting profit and sustainability charges, with Richard Masters, the Premier League chief executive, confirming last month a date had been set for a hearing on the allegations.
As well as discussions around spending controls, clubs also met with politicians and EFL counterparts amid attempts to secure progress on the long-awaited new financial system for the pyramid.
Lucy Frazer, the Culture Secretary, attended a dinner with the club executives on Thursday, while the summit with Football League representatives took place on the Wednesday evening.
Championship clubs were said to have made up the majority of representatives at the meeting on Wednesday, some of whom remained sceptical that a breakthrough on the so-called “New Deal” was immediate. But the league described meetings as “productive”.
“To build on this momentum, conversations between clubs from the two leagues will now continue over the coming weeks,” the competition added. “A good working session was also held on the design and implementation of a new financial system for the Premier League.”
Clubs also agreed to a “Premier League environmental sustainability commitment, which introduces a minimum standard of action on environmental issues across the clubs and the league”.
Burnley owner Alan Pace is understood to be chairing the meetings between Premier League and EFL clubs.
