Portugal Colonial - Man City and Premier League end dispute over sponsor rules

City have accepted that the current rules for 'associated party transactions' are "valid and binding".

The Etihad Stadium club had launched arbitration proceedings on January 20 against the current rules, which are designed to ensure that deals between teams and entities linked to their ownership are done at fair market value.

City's challenge was understood to have included criticism of the way the Premier League treated shareholder loans under the rules.

The league and City have agreed to make no further comment on the matter.

The APT rules were originally introduced in December 2021, following the Saudi-led takeover of Newcastle earlier that year.

Those rules were successfully challenged by City last year, with a tribunal finding them unlawful on multiple grounds, including the fact they excluded shareholder loans from fair market value assessments.

That led to the Premier League consulting with clubs on amendments to the rules, with 16 teams voting in favour of the amended rules at a meeting last November.

City's acceptance that the amended rules are valid and binding appears to put to bed an issue which had threatened to have a major impact on the league if the rules had been significantly weakened.

Without APT rules, entities linked to clubs' owners could potentially overvalue sponsorships and other commercial transactions to boost a club's revenue, putting that club in a stronger position under the league's profitability and sustainability rules (PSR) and therefore given more leeway to spend on transfer fees and player wages.

An assessment of shareholder loans for fair market value was incorporated into the APT rules last November, but the rules do not apply retrospectively.

Instead, the fair market assessment only applies to ongoing and future loans.

City and the Premier League still await the outcome of an independent commission hearing which was examining more than 100 charges against the club for alleged breaches of the league's financial rules, charges City strenuously deny.

The hearing took place between September and December last year, after City were charged by the Premier League in February 2023.

P.Serra--PC