Manchester City’s legal case has power to blow Premier League’s house down

At an unspecified location in central London this week, the latest stage in the Premier League’s civil war will begin to unfold. Expected to last two weeks, the arbitration case brought by Manchester City against the competition of which they are champions will be dry, its verdict technical. The consequences, however, will probably be anything but.

City, who are owned by Sheikh Mansour, the vice-president and deputy prime minister of the United Arab Emirates, will argue in front of a panel of three independent lawyers that the Premier League is breaking the law of the UK.

The infraction in question relates to rules around associated party transactions (APTs) and the need for clubs to make sure any deals they do with businesses who have “material influence over the club or an entity in the same group of companies as the club” are struck at fair market value. City argue this goes against competition law. That’s the dry bit.

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The case will be heard in private and there will be no public acknowledgment of any outcome, nor the reasons behind it. Thanks to reporting in the Times, we know something about the contents of City’s legal submission however, and by all accounts it appears quite extraordinary. The action being brought against the Premier League board under the obscure Rule x.5.4 could almost be seen as a Trojan horse for a challenge to the entire existing structure of the competition.

According to reports, City are not only challenging the APT rules but seeking damages for deals that were affected or lost as a consequence. Those damages would have to be paid by the league, whose shareholders are its 20 member clubs.

City also allege the rules were designed to stymie owners from Gulf states and members of multi-club ownership groups – something that applies to City in both instances – and were only established due to the desire of rivals to “safeguard their own commercial advantages”.

City argue the Premier League itself has a vested interest in limiting APTs as it is a rival for sponsorship income and if the rules are not changed the newly crowned champions could be forced to limit spending on community projects and the women’s team.

Finally, they argue any competitive restraint is underwritten by the Premier League’s voting system. That no rule can be changed without 14 of its 20 clubs agreeing is, according to City, succumbing to the “tyranny of the majority”. All in all the claim runs to 165 pages.

This legal submission was made in February, immediately after the Premier League had approved new, tighter rules around APTs (City’s dissatisfaction with the rules pre-dates this amendment). In legal terms, it is not linked to the 115 charges brought against City over alleged financial wrongdoing, which the club strongly denies. In political terms, the calculation is very different.

What does it mean for the world’s leading league when it is in recurring dispute with its champions of six of the previous seven seasons?

Although the rules remain in place at the very least it means uncertainty since they are being directly challenged, as well as uncertainty over the league’s ability to regulate its own competition.

In this way, City’s challenge is only punching an existing bruise. Last season, the rules, be they around VAR or PSR, were subject to consistent criticism and pressure. At the same time, the Premier League has spent time and resource trying to fend off the arrival of an independent regulator, insisting that football can look after itself. As time goes by this argument seems more and more tendentious.

Some critics of the Premier League see the APT rules as a classic example of bad governance, a mechanism put together hastily to deal with a short-term problem (a new focus on APTs began after Newcastle were bought by Saudi Arabia’s Public Investment Fund).

They point also to the league being forced to alter plans to introduce further financial rules, the so-called Top to Bottom Anchoring proposals (ironically, TBA for short), after they failed to properly consult with outside stakeholders that included the PFA, the player’s union. The critics argue this is a trend and that City’s actions are only making the government’s case.

Manchester City goalkeeper Stefan Ortega feels 'motivated and challenged' after signing a one-year contract extension. The 31-year-old German, who joined the club in 2022, has extended his stay until 2026.

Ortega is City's backup goalkeeper but played a big part in their recent title win, making a fine save to deny Son Heung-min and Spurs an equaliser, after replacing the injured Ederson. He made his 20th appearance of the campaign in the FA Cup final defeat to Manchester United.

'I am delighted to be staying at Manchester City for longer,' he said. 'This is a football club that provides players with everything we need to be our best. I have improved as a goalkeeper since coming here two years ago. My family are really settled here in England, I love everything about it here. Signing this deal means I can now focus 100% on next season and beyond.'

'This is a crucial contract extension,' City's director of football, Txiki Begiristain, said. 'Stefan is the best number two goalkeeper we've ever had, providing us with quality, stability and experience. He is very skilled and it's clear that since his arrival here he has contributed significantly to our success.' PA Media

A more sympathetic reading, however, could find the Premier League’s position to be invidious. It faces challenges from all sides, not just from domestic regulation and traditional competitors in other leagues and sports, but from the governing bodies, Uefa and Fifa, which are expanding their competitions in a way that not only makes them direct rivals for broadcasting money but puts pressure on the domestic calendar.

Its shareholder clubs, meanwhile, are split into ever-increasing factions, with multiple opposing outlooks; from those that form part of a multi-club ownership group, say, to those who have been acquired by investment funds with outlooks very different from those of the sovereign wealth funds.

Manchester City have the profile and financial heft to make things very painful for the Premier League. Their recourse to legal action, whether sincerely held or simply provocative, suggests a club that is intent on changing the current order of things.

And this is perhaps the biggest concern to emerge of late. One of the key factors behind the Premier League’s success over its 32-year history has been the centring of the collective, from the way the league is marketed (“anyone can beat anyone on a given day”) to the way power and money is shared.

City’s actions suggest the champions no longer subscribe to this way of thinking and wish to change it. It may seem unlikely, but it could be a shift that brings the whole house down.