Who is the real winner? Premier League: Court dismisses most of Manchester City’s appeals, APT will continue to be implemented

The Premier League has released a lengthy statement explaining the court ruling in the case against Manchester City.

The Premier League welcomes the court’s ruling, which recognizes the overall objectives, framework, and decisions of the APT. The court supports the necessity of the entire APT system and dismisses most of Manchester City’s appeals. Furthermore, the court found that these rules are necessary for the effective implementation of financial controls in the league. 

This decision is an important and detailed assessment of the APT rules, which were formulated to provide robust mechanisms to safeguard the financial stability, integrity, and competitive balance of the league.

However, the court did find that a few independent elements of the rules do not meet competition and public law requirements in their current form. Meanwhile, the Premier League will continue to operate the existing APT system and consider the findings of the tribunal.

The court made two rulings in favor of Manchester City:

– Shareholder loans should not be excluded from the scope of the APT rules. The background is that excluding shareholder loans from the APT rules was a choice made by most clubs who hope to encourage transparent investment, with 19 clubs (including Manchester City) voting in favor of this approach.

– Secondly, a limited number of amendments introduced to the APT rules earlier this year should not be retained. Specifically, the court found that removing the word “clearly” from the basis on which the board determines that the APT does not belong to fair market value (FMV), revising the definition of FMV, and shifting the burden of proof to the clubs to prove that transactions are at FMV could, if considered together, increase the risk of the APT being remade, which is actually unnecessary (referred to as “false positives” in the judgment).

The tribunal emphasized in its ruling that only these two aspects of the rule do not comply with competition law requirements.

Manchester City also challenged the procedural fairness of the APT rules, including both structural fairness and their application in several specific transactions involving Manchester City. The court supported most of the Premier League’s appeals on most issues, including: – The court acknowledged 

that the APT rules are a carefully drafted scheme, the result of detailed negotiations among clubs.

– The court noted that the use of independent assessors (selected for their expertise and independence) confirms the fairness of the Premier League’s overall approach to the FMV process.

– The court rejected Manchester City’s argument that the regulatory team of the league lacks the necessary independence or is “biased”.

However, the tribunal ruled in favor of Manchester City:

– The Premier League Board should provide clubs with comparable transaction data used by the board in assessing FMV before making a final determination that a transaction clearly does not belong to FMV (rather than during the Part 10 appeal phase).

The court dismissed most of Manchester City’s challenges in this regard. The court recognized that the Premier League Board conducted serious and thorough assessments of these transactions and applied the correct legal standards.

The court also believed that the committee’s FMV assessments of these transactions were not unreasonable. Nevertheless, from a procedural perspective, it determined that certain information should have been provided to Manchester City at an earlier stage of the assessment process. Manchester City has already received this information about these transactions and has been invited to submit further comments. Although the court pointed out that these FMV assessments should have been conducted more quickly, it acknowledged that delays were due to a series of constraints encountered by the league’s regulatory team and independent FMV assessors in their work, which have now been resolved.