Manchester City have written to the 19 other top-flight clubs expressing their “fundamental concern” over what they claim are “unlawful” amendments that the Premier League has proposed to rules governing commercial deals.
It comes before a key meeting of the clubs next week when they are due to vote on the changes following last month’s landmark tribunal ruling after City legally challenged Associated Party Transaction regulations (APTs).
On Friday, in the latest escalation in the dispute, City told their rival clubs the league was “rushing through its consultation process”.
In a letter seen by the BBC, the club said their “strong desire is to avoid any future costly legal disputes”, adding it is “critical that the Premier League gets it right this time round”.
The latest development follows correspondence the Premier League sent to City on Thursday, stating it “rejects in the strongest possible terms the repeated and baseless assertions” the club had made against it over the case, and laying out its position.
It also accused City of “meritless” threats of further legal action.
Both Manchester City and the Premier League declined to comment.
Background
In October, both sides claimed victory after the decision of an arbitration panel over APTs, which seek to ensure sponsorships with companies linked to clubs’ owners represent fair market value, and are not artificially inflated.
Manchester City had some of their complaints upheld, with two aspects of the rules deemed unlawful by the tribunal. It said low-interest shareholder loans should not be excluded from the scope of the rules, and that changes made in February to toughen up the regulations also breached competition law.
Following the ruling, City claimed the rules were “void”, and criticised the Premier League’s “misleading” suggestion they could be swiftly amended, threatening further legal action if there was a “knee-jerk reaction”.
But following meetings of its Legal Advisory Group and Financial Controls Advisory Group, the Premier League proposed several amendments before a vote at its next meeting on 22 November.
Premier League call City claims ‘baseless’
On Thursday, 14 November, in an 11-page letter seen by the BBC, the Premier League wrote to Manchester City, saying it “rejects in the strongest possible terms the repeated and baseless assertions” that “either the league or its representatives have acted in any way contrary to the league’s obligations as a regulator, or has ‘misled’ clubs.
“To the contrary, the league is well aware of, and takes very seriously, its obligations to act fairly and with an open mind,” it added.
The league said it has “acted fairly, transparently and responsibly in circulating considered proposals for consultation in a prompt manner”.
It continued: “Throughout the consultation, the league has reflected upon all feedback provided by clubs, including from MCFC, and sought the opinion of leading counsel to consider the proposals.
“That MCFC does not agree with the proposed amendments, or with the timing of the process being undertaken, does not mean the consultation itself is deficient or that the league has failed to comply with its obligations as a regulator.”
The letter added that the fact that City “does not agree with the process does not provide a credible basis to impugn it”.
Referring to a suggestion by City’s lawyers that it may seek an injunction, the Premier League stated “such threats are meritless, and advanced without any attempt to articulate a credible ground on which MCFC could seek to restrain the consultation process”.
Proposed rules ‘unlawful’ – City
On Friday, Manchester City’s most senior lawyer Simon Cliff wrote to the club’s rivals and the Football Association (FA), attaching legal analysis and stating the club considers the proposed rules “unlawful”.
Cliff said City are “strongly in favour of robust, effective and lawful regulation”, but because the two sides disagreed over whether the tribunal’s ruling had rendered the current APT framework void, a further deliberation by the panel was “essential”.
He added: “Common sense dictates that the Premier League should not rush into passing amendments – particularly ones which entail material legal risk – until [it] knows the outcome from the tribunal,” also arguing “clubs will be voting blind”.
“It is important that a new regime is grounded in rules that are fair, considered and legal,” said Cliff.
“Our strong desire is to avoid any future costly legal disputes on this issue and so it is critical that the Premier League gets it right this time round.”
Cliff added the proposals “would introduce into the rules a retrospective exemption for shareholder loans”, which he said is “one of the very things that was found to be illegal in the recent arbitration”.
He said it is “not lawful to reintroduce it into the rules” as “the proposals would create market distortions.”
