Manchester City and the Premier League have reached a settlement in their long-standing dispute over the rules governing commercial deals. The resolution brings an end to a legal battle that has cost both parties millions of pounds in legal fees.
City have accepted that the rules governing associated party transactions (APTs) are valid and binding, leading to an agreement to terminate ongoing legal proceedings. This acceptance comes after the club had previously mounted a legal challenge against the Premier League, claiming new rules were "unlawful".
However, both parties have agreed not to make any further comments about this matter. Meanwhile, City is also awaiting the outcome of a landmark disciplinary hearing after being charged by the Premier League with more than 100 alleged breaches of financial rules - charges which they deny.
APT regulations
The APT regulations were introduced by the Premier League as a measure to prevent clubs from profiting from commercial deals with companies linked to their owners that are deemed above "fair market value". These rules came into effect in December 2021 following Newcastle's Saudi Arabian-led takeover earlier that year and were subsequently amended in March and November 2024.
Despite opposition from Manchester City, these amendments were approved by a majority vote among top-flight clubs in November 2024. However, last year an independent arbitration panel found against aspects of these regulations following a lawsuit instigated by Manchester City.
The tribunal ruled that low-interest shareholder loans should not be excluded from APTs' scope. It also stated changes made to toughen up regulations breached competition law. Following this ruling, Manchester City criticized what they called misleading suggestions from the Premier League about swift amendments being possible for these regulations.
City threatened further legal action if there was any "knee-jerk reaction" to the ruling. They insisted that the league's proposed changes would introduce a retrospective exemption for shareholder loans into the rules, which was found to be illegal in recent arbitration. Despite opposition from Manchester City and other clubs like Newcastle United, Nottingham Forest, and Aston Villa, the Premier League voted through these amendments.
Settlement
Earlier this year, both parties attended a two-day hearing to make submissions regarding the impact of the original ruling. This has now culminated in a settlement that brings an end to this long-running legal battle.
This resolution is significant as it sets a precedent for future disputes over commercial deals within football clubs. It also highlights how such disagreements can have far-reaching implications not only on club finances but also on their reputation and standing within professional football.
