A tribunal has ruled that the Premier League’s sponsorship regulations from 2021 to 2024 are “void and unenforceable.” The decision follows a lawsuit filed by Manchester City, which challenged parts of the Associated Party Transaction (APT) rules. These regulations were designed to prevent clubs from signing inflated sponsorship deals with companies linked to their owners.
The Premier League insists that the ruling does not affect its current APT regulations, which were amended in November 2023. However, Friday’s ruling casts doubt on the league’s governance, as it found the original APT rules unlawful in three key aspects.
Background of the APT Rules
The Premier League introduced APT rules in December 2021. The regulations aimed to prevent clubs from signing commercial deals with businesses linked to their owners unless the agreement was at “fair market value.” The rule was implemented shortly after Newcastle United’s Saudi-backed takeover to ensure financial fairness.
Manchester City took legal action, arguing that the rules were unfairly restrictive. The arbitration tribunal agreed, declaring the original APT rules unlawful and therefore unenforceable.
Key Findings of the Tribunal
The tribunal’s ruling states: “In the first partial final award, it was declared that the APT rules and amended APT rules were unlawful in three respects.” It further explains, “The three respects in which the APT rules and amended APT rules were unlawful cannot be severed. As a result, the APT rules as a whole are void and unenforceable.”
This decision means that any club penalized under the original APT rules between 2021 and 2024 may now have grounds to seek damages. Legal experts suggest that the Premier League could face financial liabilities amounting to tens of millions of pounds if clubs pursue compensation claims for deals that were rejected or undervalued.
Premier League’s Response
The Premier League maintains that this ruling does not impact the “valid operation” of its current APT regulations, which were revised in November 2023. In a statement, the league clarified: “This decision expressly does not impact the valid operation of the new rules. The tribunal has made no findings regarding the validity and effectiveness of the new rules.”
Despite this, Manchester City has already launched a new legal challenge against the revised APT rules, arguing they remain unfair. Other clubs, including Aston Villa, Newcastle United, and Nottingham Forest, have also expressed concerns about the amendments.
Implications for the Premier League
The ruling has significant financial and governance implications. If clubs successfully challenge past penalties or restrictions, the Premier League may have to compensate them. The league has already spent millions in legal fees defending its financial regulations, and this ruling adds further pressure.
It also raises questions about the leadership of Premier League Chief Executive Richard Masters, who backed the APT rules despite opposition from several clubs. The ruling weakens the league’s ability to regulate club finances and could lead to more disputes over financial fair play rules.
Future Legal Challenges and Financial Impact
Manchester City and Newcastle United, both owned by entities linked to oil-rich states, could now sign lucrative sponsorship deals without as many restrictions. If the amendments introduced in November 2023 are also overturned, the Premier League may struggle to enforce financial regulations.
Clubs that have been restricted under APT rules could demand compensation or push for further changes to financial regulations. This could lead to additional legal battles and further undermine the league’s regulatory authority.
The Premier League is also awaiting a separate ruling on Manchester City’s 115 alleged financial rule breaches. If the tribunal finds City guilty, it could lead to severe penalties, including fines, points deductions, or even relegation.
This ruling marks a turning point in the Premier League’s regulatory framework. While the sports league insists that its latest rules remain in effect, the tribunal’s decision raises doubts about their enforceability. With Manchester City and other clubs continuing to challenge the APT rules, the Premier League faces mounting legal and financial pressures.
For more updates on this ongoing legal battle, visit the New York Mirror.
