Premier League shelves financial rules change amid imminent Manchester City verdict

Decision adds intrigue to City’s case as source insists it is not an indication club has won legal battle over associated-party transactions

The Premier League has been forced to shelve a proposed change to its financial rules amid the impending outcome of its legal battle with Manchester City over the regulations.
Clubs convened on Thursday for their first shareholders’ meeting since it emerged that a verdict was imminent in City’s unprecedented challenge to rules designed to police associated-party transactions (APT) by teams.
It was also their first meeting since the start this month of the so-called ‘Trial of the Century’ into what are now widely deemed to be 130 charges faced by City for allegedly breaching financial regulations over almost a decade.
The club have denied any wrongdoing in those proceedings, which are separate to their legal challenge against the APT rules.
That challenge culminated in a two-week hearing in June that has been shrouded in even more secrecy than the 130-charges case.
Clubs were not told during Thursday’s meeting whether there had been a verdict on the APT row, with both City and the Premier League bound by confidentiality over the outcome unless they both agree otherwise.
But one source told Telegraph Sport the league indicated that such a verdict was imminent by linking the case with the shelving of an amendment to those regulations surrounding who had access to a databank to which clubs submit commercial contracts.
The decision was viewed as a precautionary measure in case City secured even a partial victory in their legal battle that would render any such rule change unlawful.
However, another source said the amendment had been shelved following feedback from clubs on a number of proposed changes, which require a two-thirds majority to pass.
The source added that any suggestion the decision should be interpreted as an indication City had scored a decisive win in their legal battle was incorrect.
The Premier League and City both declined to comment.
In February, City launched an unprecedented claim of “discrimination” over rules governing market value on sponsors and transfers.
City’s challenge was brought according to the league’s arbitration procedure, which does not contain any provision to publicly announce its findings.
APT rules were introduced in December 2021 shortly after the Newcastle United takeover and followed rules previously for “fair market value” in respect of any “related-party” transaction.
Proposals to update those rules were narrowly passed earlier this year after 12 of the 20 clubs voted in favour. Six clubs had voted against the changes and two abstained. The league argued that the amendments would “enhance the efficiency and accuracy of the system”.
Telegraph Sport immediately reported that a legal challenge was expected and, in a claim that was seen by The Times, City argued they were being affected by a “tyranny of the majority”.
City sought “damages for the losses which it has incurred as a result of the unlawfulness of the FMV [fair market value] rules”, their case said, adding that rival clubs were looking to “safeguard their own commercial advantages”.
The rules were “deliberately intended to stifle commercial freedoms of particular clubs in particular circumstances, and thus to restrict economic competition”, the claim reportedly said.
“There is no rational or logical connection between a club’s financial non-sustainability and its receipt of revenues from entities linked to ownerships,” City stated.
Some rival clubs fear defeat for the Premier League would weaken financial controls and damage competitiveness in a way that could have far-reaching consequences both for its global popularity and incentives for other investors to stay involved.
According to page 135 of the Premier League rulebook, the APT rules seek to ensure “the long-term financial sustainability of clubs by extinguishing reliance on enhanced commercial revenues received from entities linked to the club’s ownership; and fairness amongst clubs, so that clubs are not able to derive an unfair advantage over domestic competitors by increasing revenues or reducing costs via arrangements with entities linked to a club’s ownership”.