As "disruptors" Man City try to dismantle PL rules, NEW details of financial chicanery
The Premier League's 20 clubs meet in London to vote on sponsorship rules. And we publish documents and contracts that throw new light on some of City's APT deals.
A potentially pivotal day in the history of the Premier League begins in earnest at 9am this morning in a London hotel, where senior representatives of the 20 clubs will begin lengthy talks about an amended version of the Premier League's “associated party transaction” (APT) rules.
This is already shaping into a civil war between a small group of clubs, led by Manchester City, who want fewer restraints on where sponsorship comes from, and the Premier League hierarchy plus a majority of the clubs, who don’t want a complete free-for-all in related-party funding.
The stakes are enormous, as are the levels of acrimony. What’s happening in relation to APTs is effectively an extension of Manchester City’s six-year war with the Premier League over alleged financial misconduct. That led to the “115” case that dates back to late 2018 and exploded with charges in February of last year.
After describing what might unfold today, I’ll provide the back story of City’s run-ins with football’s authorities over financial matters, including multiple transgressions since 2014.
That story will come with a mass of documents, several never before made public. Subscribers to this site can read them and download them below.
In today’s APT vote, the Premier League need 14 of 20 votes to get the new rules passed. The disrupter group - City’s chairman Khaldoon Al Mubarak is fond of saying that City are disrupters - will need seven votes to win the day. Abstentions may change the picture.
City will definitely have Aston Villa on their side because Villa’s co-owner Nassef Sawiris has gone public this week to say he will vote with City against the APT amendments.
The Egyptian businessman, worth around $9bn, has shifted the centre of his business operations to the UAE, where City’s owner and most prominent sponsors are based. Sawiris is increasingly close to Khaldoon.
Villa wrote to fellow clubs in recent days explaining their logic in not supporting the amendments today, as all parties are still waiting for full clarification on the APT tribunal ruling made public in October. (PDF of that ruling below).
“It is now abundantly clear that any vote [if passed] will result in immediate further litigation by Manchester City FC and an associated defence by the Premier League, incurring material further costs and unnecessary distraction and devotion of time to this issue,” Villa wrote to their fellow PL clubs.
“It is highly likely that the tribunal will conclude within the coming three months, and that an APT rule that takes into consideration the tribunal’s verdict will be supported by all clubs and cannot be contested.”
City and Villa are likely to be supported in their “no” vote by Newcastle, whose majority owners, the Saudi Arabian sovereign wealth fund PIF, would welcome fewer restrictions on APT deals. That trio will almost certainly be joined by Everton and Nottingham Forest, both deducted points last season for financial rules breaches, and bitter at the Premier League because of it.
Wolves are reportedly on the fence and could go either way while Chelsea could potentially make it the seven “no” votes that the rebels need. Equally, the rebels might not get seven. It’s too close to call.
Whatever happens, expect a mess for months to come as City throw every legal punch they can to try to get their way.
It’s what they’ve been doing for a decade, more of which shortly.
City mounted an initial legal challenge to the existing APT rules earlier this year, and by 7 October we knew they had won some small victories in less than a handful of their 20 challenges while being defeated on the rest.
(You wouldn’t have known that from the initial coverage in some quarters, by parts of the media briefed, leaked to and supported by City. One amusing Laurel and Hardy combo from different papers were even filing the same City-slanted stories, in the same words, at exactly the same time. They’ve been filing the same stories in recent days, at the same time to the minute, although someone has obviously suggested to Statler and Waldorf that they both actually write their own copy).
Anyway, today the 20 clubs meet from 9am for a meeting expected to last long into the afternoon, and in which various sources insist there will be a vote on the amended APTs. Others suggest the vote may be delayed.
Three parts of the existing APTs have been tweaked: firstly around the status of shareholder loans and whether they should count as APT transactions that require interest; secondly around some semantic issues of what “would” or “could” be allowed; and thirdly around the process and timing by which a database of “benchmarked” commercial deals is made available to clubs submitting putative new deals to get green lighted.
City first got into significant trouble with regulators over breaches of financial rules when UEFA investigated them for huge overspending in contravention with UEFA’s then-new Financial Fair Play regulations in 2014.
But as we shall see, City and their main sponsor, Etihad, were already involved in “unconventional” arrangements before FFP first came into force in 2011-12 season.