Now, it's Man City vs Premier League over 'discriminatory' sponsorship rules favouring rivals like Arsenal

Manchester City have launched another blistering legal attack on the Premier League, challenging the governing body’s latest attempt to amend its Associated Party Transaction (APT) regulations — rules introduced to curb inflated commercial deals with entities linked to club owners.

This marks the second legal offensive by the reigning Premier League champions over the APT rules, which were initially implemented following the Saudi-led takeover of Newcastle United. Last year, a tribunal sided with City, ruling that the original version of the APT regulations contravened competition law. The decision was seen as a major victory for City.

Despite their objections, Premier League clubs voted 16 to 4 in favour of amending, rather than completely rewriting, the APT rules in November 2024. Now, City’s high-powered legal team has followed through with its threat of further legal action, filing another challenge that alleges the revised rules remain discriminatory.

City’s latest submission claims the amended regulations “do not eliminate but on the contrary perpetuate the discriminatory and distortive treatment previously found by the tribunal,” arguing that rival clubs like Arsenal have gained unfair financial advantages through shareholder loans.

The Premier League had attempted to address concerns about such loans — funds typically given to clubs by their owners at little or no interest — by permitting their conversion into equity during a grace period that ended in January. Loans not converted are now subjected to a fair market value (FMV) test. However, City argue the changes still fall short.

Discrimination claims at the heart of City's argument

According to City, clubs can retain shareholder loans without having to pay FMV interest and only need to include figures in this season’s accounts, meaning “up to three years of interest expenditure could be excluded.” They argue this differential treatment distorts economic competition.

City also criticised the FMV application timeline, stating: “This continued preferential and discriminatory treatment of shareholder loans has the object and/or effect of distorting economic competition between Member Clubs on affected markets.”

The submission, shared with clubs by the Premier League, further states that the current rules “fail to meet the requirements of transparency, objectivity, precision and proportionality … and are liable to distort competition.”

The Premier League has maintained that the tribunal's ruling in February — which found the original APT rules “void and unenforceable” in their entirety — does not affect the amended regulations, which it insists are “valid and enforceable.”

Premier League's interpretation of tribunal ruling disputed

City, however, reject this interpretation, stating: “This voidness means that the amendments are themselves void, because it is not legally possible to amend rules that are themselves void.”

To support their claim, City have cited financial data from rival clubs, pointing out that Arsenal benefited from around £259 million in shareholder loans in 2022-23. Brighton received approximately £406.5 million in 2021-22, Everton £450 million in 2022-23, and Leicester £265 million in 2021-22.

City’s original challenge was triggered after the Premier League blocked a commercial deal with Etihad. They are using the same legal team in this second round.

Should City prevail again, the ruling could upend the Premier League’s financial regulations and force a return to the more relaxed pre-2021 system. It would also deal a significant blow to Premier League chief executive Richard Masters and saddle member clubs with another substantial legal bill.