Manchester City have "prevailed after a drawn-out battle" in their challenge against the Premier League’s commercial deal regulations, according to a prominent sports lawyer. Simon Leaf, head of sports law at Mishcon de Reya, commented that despite City’s success in having parts of the league’s associated party transaction (APT) rules deemed unlawful, the outcome may lead to an expansion rather than a restriction of these rules.
The Premier League responded by clarifying that City did not win on most fronts and that the tribunal upheld the core principles of the APT rules, which ensure that commercial agreements involving clubs and related entities are at market value, preventing inflated deals.
Leaf noted that while City may feel victorious, their win is not complete. “It’s like winning on penalties after extra time,” he said, acknowledging that the tribunal highlighted key points that support the Premier League’s approach. The ruling pinpointed shortcomings in the APT rules, particularly regarding shareholder loans and procedural fairness. The rules were found to be lacking because clubs weren't given access to the comparative data the league used to determine fair market value before decisions were made.
The tribunal's decision, Leaf explained, might result in broader regulations covering shareholder loans. He also expressed surprise at claims that the ruling could make it easier for City and other clubs to secure larger deals with entities tied to their owners. However, he emphasized that the rules themselves were affirmed as lawful.
Leaf also pointed out that assessing shareholder loans would pose financial challenges for clubs, particularly in terms of tax implications. Loans issued at fair commercial rates would need to be factored into profitability and sustainability calculations, and while retrospective assessments are possible, they might be seen as unfair.
The broader context of this ruling comes as part of a growing trend where sports participants, like City, increasingly challenge governing bodies using competition law, as seen in other high-profile cases such as those involving FIFA and UEFA.