An arbitration hearing in Manchester City’s legal dispute with the Premier League, which could have huge ramifications for the competition, is set to begin on Monday.
The Premier League champions are challenging the rules relating to league transactions (APT) in a hearing that will last until June 21.
It is believed that City will challenge the validity of the rules under UK competition law.
The The Timeswho first reported details of City’s lawsuit last Tuesday, said the club wanted to scrap the rules, which were first introduced in December 2021 following the Saudi-led takeover of Newcastle and were most recently strengthened in February.
The rules are designed to ensure that any commercial contract or player transfer between a club and an entity associated with the ownership of that club is done at fair market value, so that the club’s income is not artificially inflated.
If the arbitration panel declares the APT rules invalid, clubs would effectively be free to make any commercial deals they want without any independent judgment as to whether those deals were at fair market value.
This could then help clubs increase their declared income and give them more room for transfers and spending wages under financial sustainability rules. It is feared that this could lead to the clubs whose owners have the deepest pockets – City and Newcastle – effectively being in a league of their own in terms of spending.
The Times said City’s lawyers argued in their submission that the club had been discriminated against and subjected to the “tyranny of the majority” as a result of the rules.
It has sparked fears of a potential Premier League governance crisis if there is any successful challenge to its rule-making process, which currently requires a majority vote of 14 clubs for any proposal to be approved.
The Times reported that between 10 and 12 clubs offered their support in any way to the Premier League defense in the case, while one club gave a witness statement in support of City.
It is unclear what, if any, bearing this claim may have on a separate matter from the 115 charges the Premier League has brought against City for alleged breaches of the league’s financial rules. A hearing in that case is expected in the fall. City strongly denies any wrongdoing.
Also, there is no provision in Section X of the Premier League Rules, under which this arbitration process takes place, that the outcome of such claims must be published.
However, it seems certain – given what might be at stake – that it will not remain a secret for long after the arbitration panel makes its decision.
Neither City nor the Premier League have commented on the issue.
