Premier League will send clubs updated APT rule change
(Image: PA)

Premier League to send clubs updated APT rule change proposals after Man City challenge

22 Oct 2024, 20:07 by Bruna Reis · Manchester Evening News

Following the first full top-flight meeting since Manchester City's legal challenge outcome was revealed, the Premier League will send updated rule change proposals to clubs.

City challenged the league's associated party transaction (APT) rules on competition law grounds via arbitration. The arbitration panel deemed the rules, designed to ensure fair market value (FMV) in deals between clubs and entities linked to their ownership, as unlawful because they excluded shareholder loans.

The club argued this rendered all APT rules void and accused the Premier League of misleading the other 19 clubs in its initial interpretation of the panel judgement. The league has since sought clarification from the panel over the judgement's implications and has been canvassing clubs about changing the aspects of the rules found to be unlawful or unfair.

Now, in co-operation with its clubs, the league is examining how to include shareholder loans within the APT rules and requested feedback by October 10 from clubs about the shareholder loans they have, or have had in the last three years. Last Thursday, two Premier League working groups met to further scrutinise proposals for rule amendments which were put to all 20 clubs – including City – at a hybrid meeting lasting around an hour on Tuesday.

Following the feedback received at the meeting, the league will now further refine the proposals and distribute them again to the clubs. It is understood that the feedback was more about modifications rather than scrapping the proposals entirely.

An FMV assessment of shareholder loans might consider the interest rate that would be charged on such a loan in the open market, which could vary from club to club based on their credit score. Importantly, this interest cost would then need to be factored into a club’s calculation under the profitability and sustainability rules (PSR), potentially putting more clubs in danger of violating those rules.

In addition to the inclusion of shareholder loans, the panel also stated it was procedurally unfair that City had not been given the opportunity to comment on comparison data used by the Premier League board before it made a decision on whether a commercial deal was for fair market value. Therefore, the new rules are expected to give clubs that right at an earlier stage. Some rule changes made in February this year are also likely to be reversed.