Manchester City have reportedly sent a letter to Manchester United and other Premier League clubs raising concerns about proposed changes to financial rules ahead of next week’s vote.
Check: The letter, which is said to have been shared with all Premier League clubs and the Football Association, expresses City’s belief that the proposed amendments to the Associated Party Transaction (APT) regulations are “unlawful”.
Recall: In October, both Manchester City and the Premier League celebrated a victory following a commission ruling that recognized the need for APT governance but also found parts of the framework violated EU competition law.
This ruling prompted the Premier League to revise its APT policies. However, City’s letter suggests the new proposals still violate the commission’s ruling.
On the news now: The BBC reported that the letter, signed by City’s top legal expert Simon Cliff, claims the reworked proposals remain problematic. Cliff criticized the speed of the consultation process conducted by the Premier League, arguing that clubs are being asked to vote “blind.”
According to the letter: “It is important that a new regime is grounded in rules that are fair, considered and legal. 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.”
The Premier League responded to City’s concerns on Thursday, rejecting the accusations as “repeated and baseless assertions”.
In their letter, the Premier League firmly denied misleading its members, adding: “To the contrary, the league is well aware of, and takes very seriously, its obligations to act fairly and with an open mind.”
They defended their consultation process, reiterating that they had “acted fairly, transparently and responsibly in circulating considered proposals for consultation in a prompt manner.”
One of the key changes being proposed is that loans from club owners, known as ‘shareholder loans’, will now count towards spending limits and be subject to interest rates. The Premier League intends for interest costs not to be backdated to loans agreed before the new rules are ratified.
Cliff, however, argued that such an approach should not be allowed, claiming it was “one of the very things that was found to be illegal in the recent arbitration”. He further stated that approving such a measure would “create market distortions” and be “not lawful.”
City’s letter also stressed their strong support for “robust, effective and lawful regulation”, but Cliff insisted that more dialogue was needed to resolve disagreements over whether the commission had found the entire APT framework to be invalid.
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.” The Football Association received the same correspondence that was sent to the clubs.
In a robust defense, the Premier League argued that the consultation process had taken into account all feedback from clubs, including City’s, and sought the opinion of leading counsel before proceeding with the proposals.
The Premier League dismissed City’s claims about the consultation’s shortcomings, stating: “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 Premier League also took issue with City’s interpretation of minutes from a meeting held the previous month, accusing the club of “a tendentious and inaccurate interpretation” of the discussions. They maintained that City’s disagreement with the process did not offer “a credible basis to impugn it.”
Finally, when addressing the potential for further legal disputes, the Premier League rejected the idea, calling the threats “meritless, and advanced without any attempt to articulate a credible ground on which MCFC could seek to restrain the consultation process.”
