Manchester City's legal action & the Premier League’s regulations on Associated Party Transactions

It has been widely reported that Manchester City Football Club have brought a high-profile competition law claim against the Premier League. Against this backdrop, this article:

• Provides a background to the introduction of the Premier League Rules relating to Associated Party Transactions, which includes commercial and sponsorship arrangements between clubs and parties associated with the club;
• Analyses the potential legal basis for Manchester City Football Club’s claim and the arguments Premier League may make in response; and
• Considers where this leaves the relevant Associated Party Transactions Rules as well as the wider Premier League’s Profitability and Sustainability Rules, given the forthcoming changes that have already been announced.

Introduction

It has been widely reported^[1] that Manchester City Football Club (“MCFC”) has brought a high profile competition law claim against the Premier League (“PL”) before an independent arbitral tribunal appointed to hear the dispute^[2] in respect of certain PL rules (“PL Rules”).^[3] The claim is being brought in arbitration and therefore the precise details are confidential,^[4] but the fact that the claim has been brought has, unsurprisingly, gained significant public attention. This is particularly the case when viewed against a backdrop of other competition law challenges in the context of sports governing bodies – such as the European Super League case brought by A22;^[5] the challenge brought by a group of leading agents against the Football Association's national version of FIFA's Agent Regulations;^[6] and the on-going dispute between the PGA Tour and LIV Golf and its respective players.

Although the claim is confidential,  it is understood that MCFC is challenging the recent changes to the PL Rules relating to "Associated Party Transactions", which includes commercial and sponsorship arrangements between clubs and parties associated with the club (“APT Rules”), which form part of the PL's wider Profitability and Sustainability rules (“P&S Rules”). ^[7]  

Table of Contents

• Purpose of the P&S Rules
• Background to the recent changes to the PL Rules
• Associated Party Transactions Rules Explained
• Threshold Transactions Rules Explained
• Requirement for clubs to submit transactions to Premier League
• Difficulties in establishing "Fair Market Value"
• Potential competition law framework for MCFC's claim
  • Possible arguments that Manchester City may make
  • What could the Premier League’s defence look like?
• The future of the P&S Rules