Manchester City and Premier League Reach Settlement Over APT Rules Dispute

Settlement Ends “Football’s Civil War”

The long running battle between Manchester City and the Premier League over the Associated Party Transaction (APT) rules has finally been settled. The outcome brings an end to what many had described as English football’s “civil war”, a dispute with profound implications for how money flows through the game.

The settlement comes just weeks before a two-week arbitration hearing was due to begin. While Manchester City had argued that the revised APT rules, introduced in November 2024, were anti-competitive and invalid under public law, the Premier League has confirmed that the current rules are valid and binding.

Why the APT Rules Matter

The APT rules are designed to regulate commercial deals between clubs and companies linked to their owners. Their main purpose is to ensure such transactions are conducted at fair market value, preventing wealthy clubs from inflating sponsorship or loan arrangements to spend more freely on transfers and wages.

For the Premier League, these rules are critical to preserving competitive balance. For Manchester City and others, they represented restrictions on legitimate commercial freedoms.

How the APT Rules Changed: Before vs After November 2024

Aspect	Before November 2024 (Original Rules)	After November 2024 (Amended Rules)
Definition of APT	Covered sponsorships, commercial partnerships, and service agreements with entities linked to a club’s owners.	Expanded definition with clearer criteria and broader scope, closing potential loopholes.
Shareholder Loans	Exempt - loans from owners/shareholders were not considered APTs and therefore not subject to “fair market value” tests.	Still excluded from retrospective review. Future loans must meet fair market value criteria, but past loans remain unaffected.
Fair Market Value Test	Applied to all declared APTs; assessments could vary widely as methodology lacked consistency.	Introduced standardized valuation methodologies overseen by independent auditors appointed by the Premier League.
Disclosure Requirements	Clubs had to self-declare APTs and provide supporting evidence, but reporting standards were inconsistent.	Mandatory disclosure within strict deadlines, with penalties for incomplete or late submissions.
Enforcement & Penalties	Ambiguous penalties, applied inconsistently; enforcement relied on case-by-case judgment.	Clearer penalty framework, including potential point deductions, fines, or restrictions on future transactions.
Retrospective Application	Not applicable. Previous transactions (like shareholder loans) were left untouched.	Still not retrospective, a major sticking point for Manchester City, who pushed for retroactive review to protect competitive balance.

Why Manchester City Objected

The crux of the dispute was shareholder loans.

• Under the old rules, shareholder loans were exempt from APT scrutiny, meaning clubs could inject funds without concern for “fair market value.”
  
• City argued that this loophole gave rivals unfair financial flexibility, especially since the Tribunal in October 2024 had already ruled that exempting shareholder loans was unlawful.
  
• However, the new rules passed in November 2024 did not retrospectively review existing loans, a point City challenged but has now conceded in the settlement.

The Settlement and Its Implications

The Premier League’s statement confirms that Manchester City accepts the validity of the amended APT rules. Both parties have agreed not to make further public comments.

For the Premier League, this is a significant victory, it reinforces its ability to regulate owner linked commercial transactions and apply consistent oversight across all 20 clubs.

For Manchester City, the settlement closes one front of its ongoing legal battles, while the larger case regarding alleged widespread financial rule breaches remains unresolved.

What This Means for English Football

1. Regulatory Stability: The Premier League can now enforce its APT rules without ongoing legal uncertainty.
   
2. Fair Market Value Principle: All new shareholder loans and sponsorship deals must comply with standardized fair value testing.
   
3. End of Retrospective Risk: Past shareholder loans remain untouched, protecting clubs that relied on them before November 2024.
   
4. Focus Shifts to Main Case: Attention now returns to the Premier League’s broader case against Manchester City, where judgment is still awaited.

Expert Insight

This settlement may not have the fireworks of a courtroom showdown, but it represents a crucial turning point. The Premier League has defended its authority to regulate financial fairness, while Manchester City has opted for pragmatism, avoiding further uncertainty at a time when the club faces wider legal scrutiny.

At Al Kabban & Associates, we view this settlement as a cautionary tale in sports governance and financial compliance. It highlights how evolving regulatory frameworks, whether in football, corporate law, or finance, can quickly escalate into protracted disputes.

For clubs, businesses, and investors operating under regulatory regimes in the UAE and abroad, the key takeaway is clear: compliance frameworks must be anticipated, understood, and built into your operations early, before they become litigation risks.

With decades of legal experience and deep understanding of UAE Sports law and international sports regulations, our team ensures your sports investments are both profitable and protected. For more information or to schedule a consultation, contact us at +971 4 453 9090 or visit www.alkabban.com. 

You can also follow us on social media for more updates on everything law related in the UAE: @Alkabban_Law

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