FILE PHOTO: Soccer Football - Premier League - Manchester City v Fulham - Etihad Stadium, Manchester, Britain - October 5, 2024 General view inside the stadium before the match REUTERS/Molly Darlington /File Photo
LONDON (Reuters) -Manchester City claimed a partial victory over the Premier League on Monday after an arbitration panel ruled on sponsorship deals, known as Associated Party Transactions (APT), that the Abu Dhabi-owned club was blocked from completing.
The Premier League put its own spin on what some commentators saw as a landmark verdict, saying the panel's redacted 175-page document endorsed the overall objectives and decision-making of the APT system.
The panel found parts of the league's APT rules broke British competition law, however, and were also unlawful because clubs were unable to comment on types of data the league would take into account.
The Premier League's decision in relation to two City transactions in 2023, with First Abu Dhabi Bank and Etihad Aviation group, were "reached in a procedurally unfair manner" and must be overturned, the panel ruled.
APT rules were designed to maintain the Premier League's competitiveness by preventing clubs from inflating the value of sponsorship deals with companies linked to their owners.
City said in a statement that they had succeeded with their claim and the Premier League was found, among other things, to have abused its dominant position.
"The Tribunal has determined both that the rules are structurally unfair and that the Premier League was specifically unfair in how it applied those rules to the Club in practice," City added.
"The rules were found to be discriminatory in how they operate, because they deliberately excluded shareholder loans," it added.
The Premier League said the majority of City's challenges had been rejected.
"Moreover, the Tribunal found that the rules are necessary in order for the League’s financial controls to be effective," it added in a statement.
SEPARATE HEARING
Reigning champions City are also involved in a separate independent hearing into the club's alleged breaches of Premier League financial regulations which began in September, with a verdict expected some time before the end of the current season.
The club have won eight Premier League titles, the Champions League, three FA Cups, six League Cups, the UEFA Super Cup and the FIFA Club World Cup since being bought by Sheikh Mansour's Abu Dhabi United Group in 2008.
The Premier League introduced a temporary ban on clubs being sponsored by firms linked to their owners following the sale of Newcastle United to a consortium dominated by Saudi Arabia's Public Investment Fund (PIF) in 2021.
The rules were amended in March after consultation with Premier League clubs and were approved by the FA.
The panel's ruling did not find that the APT Rules were targeted specifically "at clubs owned by companies in the Gulf region but were rather intended to apply to any club that might use APTs."
According to the rules, each APT must be submitted to the Premier League Board, which will conduct a Fair Market Value Assessment.
Representatives of Chelsea, Newcastle United and Everton were listed in an appendix as witnesses of fact for City in the arbitration process.
Brighton & Hove Albion featured in the Premier League's list of witnesses with written statements put in evidence from West Ham United, Manchester United, Liverpool, Tottenham Hotspur and Arsenal.
Brentford, Bournemouth, Fulham and Wolverhampton Wanderers submitted letters in support of the APT Rules for the purpose of the arbitration.
City had alleged that excluding shareholder loans from the APT rules favoured certain clubs and could distort the market. The document said all of Arsenal's borrowing and almost all of Brighton's came from shareholders.
"In our view, whether or not shareholder loans can be equated to equity injections, the exclusion of shareholder loans from the APT Rules distorts competition in permitting one form of subsidy, namely a non-commercial loan, but not another namely a non-commercial sponsorship agreement," the ruling said.
(Writing by Alan Baldwin in London, reporting by Sam Tobin in London and Aadi Nair in Nashik, India; Editing by Ken Ferris)
