Man City accuse Premier League of 'misleading' clubs over tribunal verdict

Manchester City has claimed that the Premier League was "misleading" regarding the outcome of its significant legal battle concerning regulations on commercial agreements.

City has sent a letter to premier league clubs expressing their discontent with the league's summary of the case ruling, claiming it has "multiple inaccuracies."

The letter addressed to the 19 clubs and the league, which the BBC has obtained, was dispatched by City's chief legal officer, Simon Cliff, on Monday.

After the arbitration panel's decision was released on Monday, both parties have declared themselves the winners in the legal dispute initiated by City regarding the league's associated party transaction (APT) regulations.

The club, owned by the Abu Dhabi-backed City Football Group, had certain grievances validated, as a tribunal found two parts of the APT regulations to be illegal.

They stated that their legal efforts were "successful."

The Premier League reacted positively to the tribunal's conclusions, noting that it dismissed most of Manchester City's objections and "supported the overall goals, structure, and decision-making process of the APT system."

APTs focus on securing sponsorship agreements with businesses that are associated with the owners of sports clubs, making sure that these deals reflect a fair market price.

The city has chosen not to provide any remarks regarding the letter.

The Premier League has chosen not to make a statement, but a high-ranking official has informed BBC Sport that the league stands by its summary of the ruling and does not agree with claims that it was misleading or incorrect.

Consultations with the clubs are currently taking place. They are scheduled to meet next Thursday to talk about the aftermath, but no voting will occur at that time.

This situation isn't directly connected to the Premier League's disciplinary committee. They will be addressing 115 allegations against City for purportedly violating financial rules, some of which are as old as 2009. City has denied any misconduct.

In the letter, Cliff provided some "explanations" to help member clubs "better understand" the panel's decision, following a summary given by Premier League CEO Richard Masters.

"Unfortunately, the summary is not accurate and includes multiple errors," asserts Cliff.

"The court has ruled that the APT regulations are illegal. According to MCFC, this implies that every one of the APT regulations is invalid," the letter says.

The decision does not express support for the APT rules, nor does it claim that these rules, as implemented, were essential for the effectiveness of the League's financial management.

In its overview, the Premier League mentioned that the tribunal found "a few specific parts of the regulations that don't align with competition and public law standards as they are currently formulated," and that these issues could be "addressed swiftly and efficiently."

Cliff describes the league's stance that City didn't win most of their challenges as "an unusual perspective on the ruling."

He said: "Although MCFC didn't win every argument in its legal case, the club didn't have to demonstrate that the APT rules are illegal for various reasons. It's sufficient for them to show that they're illegal for just one reason."

Cliff pointed out that it is "not accurate" to say that the tribunal's ruling highlights specific parts of the APT rules that must be changed to meet competition and public law standards.

He went on to say, "In fact, the APT regulations... have been deemed illegal under both competition law and public law. This implies that they are invalid and cannot be enforced. This has major implications for APTs that have already been signed and for those currently under discussion by clubs."

What’s even more troubling is the PL's proposal that new APT regulations should be approved in the upcoming 10 days.

The Premier League plans to update its regulations in the next two weeks to ensure they align with competition laws.

The tribunal issued a 175-page document stating that affordable loans from shareholders to their teams should not be left out of the APT regulations. Additionally, it was decided that certain amendments made in February to strengthen these rules should not be kept in place.

Cliff points out that it's quite surprising that the Premier League wants to engage club members in changing the APT rules when it is still unclear what those rules actually are.

He also mentioned, "We will reach out to the Premier League about this issue individually. For now, based on the results of the award, it's essential for all clubs to take a moment to reflect and think things through, rather than jumping to hasty conclusions."

Taking such a foolish path could result in additional legal actions and increased expenses. It's essential for member clubs to have confidence in their regulatory body.

This letter, along with its provocative wording, marks a significant intensification in the ongoing conflict between the most successful club in English football and the rival they have triumphed over six times in the last seven years.

This ongoing dispute seems like it could continue for some time. The Premier League believes it can adjust the APT rules to align them with competition regulations. However, Cliff has cautioned that any "hasty" efforts to implement these changes without thorough thought could trigger additional legal challenges, resulting in even more legal expenses. This warning is likely on the minds of clubs that are already worried about the league's rising legal costs.

The panel found that excluding low-interest loans made by club owners to their teams—known as shareholder loans—from the existing APT regulations was illegal. As a result, the Premier League plans to modify its rules to incorporate these loans. They intend for these loans to come under the APT regulations only after the rules have been updated, and they will not apply the changes to past cases.

City's legal team argues that it's unjust to apply APT rules—which have been deemed partially illegal—to past sponsorship agreements while ignoring these regulations for earlier shareholder loans. They might also pursue a legal order to stop the Premier League from attempting to enforce these rules in that context.

Cliff's letter is likely to fuel speculation that City might pursue additional legal steps to seek compensation for any damages they believe they've incurred due to the regulations.