Manchester City legal action Q&A: What are APT rules? How will hearing work? What are the implications?

In light of Manchester City's decision to initiate legal proceedings against the Premier League, Sky Sports has set out to provide answers to the key enquiries arising from this unexpected development.

The City sports team is making an effort to put a stop to the APT rules of the Premier League. This will be done through a two-week arbitration hearing that commences on Monday.

The accusation has surfaced in light of 115 charges being made against Man City by the Premier League for alleged violations of financial regulations. The Times, which originally reported on the legal proceedings on Tuesday, has revealed that a hearing is scheduled for November.

Geraint Hughes, senior reporter for Sky Sports News, and Kieran Maguire, an expert in football finance, recently held a Q&A to address all the crucial inquiries surrounding Man City's legal action against the Premier League.

APT Rules: Understanding Associated Party Transactions

Hughes explains that a club's financial success is largely dependent on the income it generates through commercial means. For instance, a club can earn commercial revenue through partnerships with companies that have a connection to the club. Manchester City's partnership with Etihad Airways is a prime example of such a connection. Etihad Airways maintains ties with Manchester City's Abu Dhabi owners, which explains why the airline sponsors the club.

When dealing with commercial revenue such as sponsorships in the Premier League, an independent company is responsible for determining a just price. This company sets a standard, examines the deal, scrutinizes it, evaluates it, and decides whether or not it is a fair transaction.

Man City is expressing their disagreement towards the situation as they believe it is unjustified. They view it as a negative impact towards competition and business and non-compliant with business laws in the UK. Their assertion is that they should have the freedom to procure any sponsorship without any regulation enforced upon them.

Can you explain the regulations for Associated Party Transactions?

Why APT Rules Were Introduced In Premier League?

Maguire stated that the Premier League announced the introduction of new regulations in February. However, these rules are a continuation of the regulations that came into effect soon after Newcastle United was bought by the Saudi Arabian Public Investment Fund.

It seems like the Premier League teams quickly responded without much thought. They were anxious about Newcastle making business agreements with companies and advertisers from the Middle East, which would be very lucrative and give them an edge over other teams.

To a certain degree, it appeared as though Newcastle's competency was impeded, which piqued Manchester City's curiosity. At that time, they were not fond of the regulations and are now waiting a few years to witness the outcome.

Man City Sues Premier League: What's The Reason?

Maguire stated that Manchester City believes they have faced unfair circumstances in the past, which is a problem shared by several other clubs. The Premier League has been a significant contributor to the outstanding success of teams like Manchester United, Liverpool, and Chelsea, resulting in the formation of popular global brands.

In order for Manchester City to keep up with other top clubs, they chose to focus on commercial success with the support of their owners, rather than building a loyal following of fans around the world from the beginning and continually maintaining it.

The City team thinks they're at a disadvantage being based in Manchester. They explain that the price of tickets at their stadium is lower than comparable clubs in London, because London is a more popular destination for tourists and has higher prices. But because they can still compete on the commercial front, they feel they have the chance to be a top team. That's where they want to be.

The statement implies that they don't intend to surpass their competitors but instead strive to reach the same level as them. This is important to avoid having only two major players in the industry. With the new ownership of Newcastle, there could potentially be a top seven group of teams.

How Do Premier League Clubs View This?

According to Hughes, most of the teams in the Premier League agree with the league's stance on the APT rules.

A Premier League official has stated that if the regulations were removed, it would be akin to being in a state of lawlessness. This means that clubs could spend however much they desired on transfers or salaries for players, without any constraints. It would become uncontrollable.

"The Premier League is determined to strongly oppose this."

What's The Plan For Next Week's Trial?

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Hughes explained that arbitration can be utilized in various ways among organizations, individuals, and the workplace. The current matter revolves around a disagreement about regulations, and arbitration is being employed as an alternative to going to court. Although it's possible for the case to eventually go to court, the initiating party, Manchester City, has brought the issue to an arbitration panel. This panel will consist of a neutral figure who will essentially function as a judge while overseeing the case brought by Manchester City against the Premier League.

It's not limited to a courtroom. It can occur in any setting throughout the nation. Nonetheless, the proceeding transforms into a courtroom, no matter how lengthy it is.

At this location, people will listen to the reasons presented by both parties. Manchester City and the Premier League will explain their stances, and they will take into account proof from witnesses that are brought forth by either group, either in writing or through speaking. The arbitrators will decide which method to use.

Being independent, an award is made as a decision. This decision is legally binding, but arbitration is a method employed to avoid going to court. However, if either party is not happy with the decision and arbitration doesn't work, litigation is still a viable option.

Regarding the timing of award distribution, it's difficult to determine a specific timeline. It could happen rapidly or it could take an extended period of time.

Can Man City's Complaint Be Justified?

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According to Maguire, it's important that City demonstrate how the expansion of the regulations related to affiliated parties is unjustly limiting their ability to seek out business opportunities in places like the Middle East and elsewhere around the world. They need to show that these regulations are impeding fair competition.

City's contention is that enforcing the current regulations can consume several months, causing potential partners to seek other options like LaLiga, Bundesliga, and Serie A. In City's view, they are competing in a highly competitive worldwide market for business partnerships.

Legal Action: What Are The Implications?

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Hughes stated that if City suffers a defeat, they could resort to taking legal action. However, this may result in even more costly and prolonged court proceedings than the ongoing situation.

If they manage to attain their objective, it may result in the abolition of the Premier League regulation stated in the manual. However, if they fail, the regulation remains in the rulebook and necessitates the consent of 14 out of the 20 clubs to pass a novel rule or regulation through majority vote.

"City's Legal Loss: A Gateway To European Super League?"

According to Maguire, Manchester City was never enthusiastic about joining the European Super League with the other five clubs. But if they lose this case, and they feel the Premier League has treated them unfairly, they may consider exploring other options. Ultimately, it will be a business decision for them to make.

City hasn't shown any signs of considering this option. They were among the initial teams to withdraw from the European Super League as it started to fall apart.

Can Independent Football Regulator Affect Such Cases?

Hughes stated that the answer to the question is both positive and negative. It all depends on what kind of self-governing body will regulate English men's football. One possibility is a non-interventionist independent agency that gives the Premier League the freedom to create their own financial regulations and allows clubs to operate within them.

Maybe there is a regulator that likes to get involved a lot, and if that's the case, they might have some influence over the rules that get made by the Premier League.

Does 115 Charges Case Connect To This Legal Action?

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Hughes stated that, although they are distinct from each other, there may be some ambiguity since the situation pertains to the realm of law. So, if the arbitration panel grants Manchester City or the Premier League with an award, lawyers may contend that it could have an influence on a portion of the 115 charges.

It is important to note that Manchester City and the Premier League are separate entities. However, there may still be certain benefits that one or both sides could utilize in relation to the 115 charges that are scheduled to be addressed later this year. These advantages would have to be legally permissible, but they are still worth considering nonetheless.