The English football landscape has become murkier than ever before as the Premier League, with many of its clubs, becomes entrenched in a civil war with mega giants Manchester City.
City believe the Premier League are raging a war on clubs with owners from Gulf nations like the United Arab Emirates and Saudi Arabia, while representatives of the world’s top football league insist that they are simply trying to uphold the values of financial fair play.
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Other clubs have been dragged into the mud and made to pick a side all over a bitter legal battle regarding the Premier League’s associated party transaction (APT) rules which wrapped up earlier this week.
APT rules were introduced in 2021 – following the acquisition of Newcastle United by Saudi Arabia’s Public Investment Fund – to protect fairness by attempting to ensure that clubs do not gain an unfair financial advantage by doing inflated sponsorship deals with entities linked to club ownership.
Eight-time Premier League champions Manchester City – who have won the title in six of the last seven seasons – launched the legal dispute in June. They were aggrieved by the rules trying to limit their deals with UAE-based sponsors Etihad Airways and First Abu Dhabi Bank because they were owned by Sheik Mansour Abu Dhabi, who also owns the club.
Other clubs were quickly forced to hitch themselves to either wagon with Manchester United, Liverpool, Arsenal, Tottenham, West Ham and Brighton all acting as witnesses for the Premier League during the case, while Everton, Newcastle, Chelsea and Nottingham Forest all were supportive of City.
Despite being seemingly outnumbered, the sky-blue half of Manchester is not backing down. In fact, they are attempting to take charge off the field as well as on it.
CITY ACCUSED OF TRYING TO RUN THE LEAGUE
The UK Telegraph reported that Manchester City sent an email to all 19 other clubs claiming that the Premier League’s APT rules were obsolete following the legal case’s conclusion on Monday, and they invited their rivals to contact them directly regarding the matter rather than the league executive.
The email saga has led to other Premier League teams accusing City of trying to run the league themselves after an arbitration panel handed down their findings on APT rules.
Like an American political debate, both sides walked away claiming victory.
The Premier League felt vindicated that the panel found the APT system to be a “carefully crafted scheme” which is crucial to competition structure as well as not finding any evidence of City’s claims that the rules discriminated against clubs with ownership from the “Gulf region”.
The Guardian’s chief sports writer Barney Ronay was scathing of City for making that argument in the first place, saying “this was an absurd claim that everyone involved should, frankly, be ashamed to have made in the first place”.
“Rational, blanket economic rules can be argued over, tweaked or abandoned. But to call them racially motivated is to demean the victims of the actual racism,” he continued.
City did not walk away with their tails between their legs, however.
In fact, it was quite the opposite as they puffed their chests out and boasted the success of the panel declaring some aspects of the regulations were unlawful and must be redrawn.
The main focus of which was shareholder loans.
The Premier League must now include the assessment of shareholder loans – which involve owners or directors putting money into the club interest-free – into APT rules despite previous belief that they are an unfair advantage because not all clubs can avoid the interest rates of commercial loans.
As a result, judgments on City’s deals with Etihad Airways and First Abu Dhabi Bank have been put on hold and will be reassessed as to whether they meet fair market value at a later date.
That outcome led football law expert Christopher Allen to tell ESPN that “up to nine Premier League teams” receive shareholder loans and City were the true winners of the case with a can of worms potentially opened for the Premier League.
“In footballing terms, it feels very much like a Manchester City win, with the Premier League scoring a consolation goal,” Allen said.
“I say ‘consolation goal’ as the Tribunal did not appear to find that the principle of having rules around associated party transactions (APT) in and of itself to be unlawful.
“The unlawful nature of the current APT rules represents two problems. First, with Manchester City having now taken the seismic step of being the first club to bring a claim against the Premier League, it could open the door for other clubs who might have had transactions vetoed by the Premier League as part of the old APT rules to seek redress.
“Second, and a point that is being widely reported from the Tribunal judgement, is that interest free shareholder loans perhaps ought to be part of any new APT rules that the Premier League now brings in.”
DOES THIS VERDICT MAKE THE RICH RICHER?
The ruling on shareholder loans theoretically could unleash another a wave of the mega-wealthy turning the Premier League clubs into their favourite toy.
Russian oligarchs, Emirati sheiks and Saudi princes have all made their presence felt in the Premier League this century.
Football is not the only sport where they have exerted the influence as golf, Formula One and, most recently, tennis has all been impacted by a seemingly bottomless pit of oil money.
Their ‘sportswashing’ programs – where individuals, governments, groups or corporations fund sport to improve their reputation which has been damaged by wrongdoing – have copped widespread criticism but the APT case findings have essentially green lit the ongoing use of the practice.
Clubs like Manchester City will be able to bring in more money through sponsorship connected with their owners, and football’s financial arms race will continue.
Manchester United, Arsenal and Chelsea – whose majority owners are all American – have spent astronomical amounts of money to try break City’s stranglehold on the Premier League trophy, but limitations exist on private equity in comparison to oil wealth.
Eventually, everyone else gets left behind at it has been exhibited most notably by the Qatari-owned Paris Saint-Germain who have won ten of the last 12 Ligue 1 titles in France.
That prospect prompted UK Telegraph’s chief sports writer Oliver Brown to write that “the very essence of the game, rooted in the notion that clubs are inseparable from their communities, is warped by City’s latest victory”.
“Just as City have traditionally been seen as the choice of the true Mancunian, Newcastle United describe themselves as ‘having proudly stood at the heart of an iconic city – and in the hearts of a unique community – for generations’,” Brown continued.
“Such depictions are increasingly unrealistic. City and Newcastle are not so much grand civic enterprises any longer as gaudy global brands, perfect conduits for the United Arab Emirates and Saudi Arabia to wield their influence over the widest possible audience.”
On the pitch, the main takeaway from not restricting the impact of the wealthy is diminishing the likelihood of an underdog champion like Leicester City in the 2015/16 season.
After the Foxes miracle, many key players from their title-winning side like Riyad Mahrez (Manchester City), N’Golo Kante (Chelsea) and Danny Drinkwater (Chelsea) were snapped up by their wealthier rivals.
That would surely be replicated if another team unexpectedly climbed the table in the seasons to come, but the richer clubs having even more money to build deeper squads will make it harder than before to do so.
Aston Villa finished fourth last season to earn their way into the Champions League this season after playing in the Championship as recently as five years ago, but they have done so with considerable backing from American investment.
Essentially, there is likely to be less shrewd squad-building in the future and more splashing cash to create super teams.
DOES THIS IMPACT CITY’S OTHER LEGAL ISSUES?
No, Manchester City still face 115 charges for financial breaches.
The dispute over APT rules does not relate to City’s allegedly not correctly accounting for their finances from the 2009/10 season through to 2017/18.
City deny the charges, and independent hearings began last month with an outcome expected to be handed down before the year’s end.
The fact they have walked away from the APT dispute claiming victory has also saved them a PR nightmare as a loss of the case would have discredited their position and turned public perception even further against them – opposing fans are already baying for blood as City’s manager Pep Guardiola recently said their rivals want them “wiped off the face of the Earth”.
But apart from PR spin, the APT case will not influence their other legal battles as the 115 charges remain a whole different beast all together.
The breakdown of which is 54 charges relate to failure to provide accurate financial information, 14 charges focus on failure to provide accurate details of player and manager payments, seven charges of breaching profit and sustainability rules, five charges of failing to comply with UEFA’s financial fair play regulations and 35 charges of failing to co-operate with Premier League investigations.
It is quite the rap sheet that presents a whole different battle for City.
In footballing terms, the APT case was the first leg of a knockout tie that sets up a fascinating second leg to decide the club’s fate.
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