The outcome of Manchester City’s landmark case with the Premier League may now place title rivals Arsenal at risk of punishment. The Premier League champions had several of their complaints upheld, particularly those related to associated party transaction (APT) rules.
APTs refer to commercial agreements between clubs and companies they have a close association with. Restrictions were implemented in December 2021, shortly after the Saudi-led takeover of Newcastle.
Lawyers representing Manchester City successfully argued that shareholder loans should be included within the scope of the APT rules. This inadvertently means that top-flight clubs with significant borrowing levels now risk breaching Profitability and Sustainability Rules.
According to The Times, Arsenal has borrowed over £200 million entirely through shareholder loans. This summer, Mikel Arteta acquired David Raya, Riccardo Calafiori, and Mikel Merino for a combined total of £91 million.
This followed a spending spree in the summer of 2023, where nearly £200 million was invested in new signings, with the Spaniard receiving strong backing from the club in their pursuit of a first Premier League title since 2004.
However, these new developments could pose challenges for Stan Kroenke and the club, potentially necessitating future sales to comply with regulations.
City has since issued a statement declaring: “The club has succeeded with its claim that the Associated Party Transaction (APT) rules have been found to be unlawful and the Premier League’s decisions on two specific MCFC sponsorship transactions have been set aside.
“The Tribunal found that both the original APT rules and the current, (amended) APT Rules violate UK competition law and violate the requirements of procedural fairness. The Premier League was found to have abused its dominant position.”
In response, the Premier League asserted victory, stating that the tribunal dismissed the majority of Manchester City’s challenges. League officials claimed the rulings “endorsed the overall objectives, framework and decision-making of the APT system.”
