Manchester City’s legal challenge to the Premier League’s related party transaction (APT) rules may benefit other clubs.
The 2021 version of the associated party transaction (APT) rules was rushed approved by a spooked Premier League in response to Newcastle United’s takeover.
At the moment, it appeared like the established order was taking significant action against top pretenders. But could it be the last straw for the Premier League’s financial fair play system?
The announcement on Friday that the APT rules from 2021 to 2024 are “null and void” is hardly a major changer for Manchester City.
Anyone who claims such – or that the way is now clear for inflated, state-sponsored accords to be pushed through with little fuss – is certainly getting ahead of themselves. But, at a time when the Premier League‘s regulations are under attack from all sides, it feels like the first tremors of an impending earthquake.
In retrospect, the APT changes in 2021 appeared to be overly broad. Remember Amanda Staveley declaring that Newcastle were “p—- off” by an organization being able to modify the regulations in an instant, making it more difficult for the club to recruit big sponsors?
That the City has been able to persuade a tribunal of this fact, and that another legal case is ongoing that might overturn the new set of rules, feels very significant.
Nothing is changing right now. Everyone is waiting for the more big legal cases, just as they are for the profitability and sustainability standards (PSR), which will be in effect for another year.
City’s conclusion on 115 counts is approaching, and they are becoming increasingly confident in their decision. Who knows what will happen if they win the case.
Newcastle, Nottingham Forest, and Aston Villa, the three teams that voted against the most recent APT modifications, will be allowed to seek damages if any agreements are denied. Given the potential impact of adding a few million to the bottom line in the PSR world, this may be huge.
Aside from that, loosened APT rules would give Newcastle more alternatives. They have yet to get major sponsors for their training field, stadium, or warm-up kits; however, multi-million-dollar partnerships with PIF-aligned firms in the future may help tip the scales in their favour.
However, as one insider pointed out on Friday night, the guidelines will always include some type of fair market assessment, so the idea of Saudi sponsors being free to overpay for transactions is absurd.
PIF has continually told The i Paper that they would not be interested in doing it, as they saw Newcastle as an investment rather than a vanity project.
Much will rely on what the Premier League does next.
A positive statement issued Friday night showed that they are still confident in the present form of the guidelines. However, many are skeptical that clubs will be able to withstand more expensive fights.
“Manchester City will undoubtedly be delighted with this result, but challenger clubs such as Newcastle, Aston Villa, and Nottingham Forest will be considering their options in terms of potential compensation for deals they’ve been denied in recent years in terms of whatever City will be able to claim,” football finance expert Kieran Maguire – a busy man these days – told The i Paper.
“The other Premier League clubs will be thinking long and hard about whether they want to move forward because they currently have effectively unknown levels of liability in this case and could face a massive bill if Manchester City is successful on the 115 charges.”
“The vast majority of clubs don’t really care because they don’t see themselves as competing clubs and they probably take the view that Newcastle and Villa will eventually establish themselves as part of the elite anyway.”
It is a scary idea for those who sought to obstruct their path that their 2021 power play may have gone back to haunt them.
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