Man City Contemplates Legal Action against Premier League Amidst New Sponsorship Regulations
The Premier League is facing potential legal action from a club, believed to be Manchester City, over new rules that restrict ‘in-house’ sponsorship deals. The league has proposed stricter regulations on associated-party transactions, aiming to prevent clubs from inflating commercial deals with sponsors linked to ownership groups. The intention behind these reforms is to level the playing field among the 20 clubs in the English top flight, preventing clubs with wealthy owners from gaining an unfair advantage.
The controversy arises from the fact that clubs like Fenway Sports Group, who own Liverpool, would be unable to negotiate sponsorship deals with publications they own, such as the Boston Globe. This move aims to prevent clubs from overvaluing these deals. However, Man City has now warned the Premier League that they may take legal action against these measures, as reported by Sky News.
Man City, owned by the Abu Dhabi Royal Family under the City Football Group, has partnerships with at least seven companies based in the United Arab Emirates. These include Etihad Airways, e&, Experience Abu Dhabi, the Emirates Palace Mandarin Oriental, Aldar, First Abu Dhabi Bank, and Healthpoint. The club is currently awaiting trial after being hit with 115 charges by the Premier League for failing to provide accurate information about its sponsorship revenue.
Sky News correspondent Mark Kleinman reveals that Man City has informed the Premier League that they could resort to arbitration proceedings to prevent the adoption of these changes. The club argues that the proposals are unlawful under English competition law. However, the Premier League disputes this claim and remains confident in the legal advice it has received, which suggests that the reforms are permissible under competition law.
This latest development adds another layer of messiness to the ongoing drama in English football. The sport is increasingly becoming a capitalist power play off the field. Man City is not the only club facing scrutiny over state-backed spending, with Newcastle United’s association with the Saudi Royal Family also raising concerns. Newcastle’s new shirt sponsor, Saudi-based events company Sela, is majority-owned by the state’s Public Investment Fund and is paying the club £25 million a year, a significant increase from their previous deal with Fun88 worth £6.5 million annually.
Other clubs have also faced consequences for breaching the Premier League’s profitability and sustainability rules. Everton, for example, has been docked 10 points and both Everton and Nottingham Forest were charged again in January. Chelsea is currently under investigation after self-reporting inconsistencies in their finances during the ownership of Roman Abramovich, known for his heavy spending.
In conclusion, the Premier League’s proposed regulations on ‘in-house’ sponsorship deals have sparked a potential legal battle with a club, believed to be Manchester City. The aim of these reforms is to create a fairer playing field among clubs in the English top flight. However, Man City has threatened legal action, claiming that the proposals are unlawful under English competition law. This controversy adds to the ongoing drama surrounding state-backed spending in English football, with other clubs like Newcastle United and Everton also facing scrutiny for their sponsorship deals. The sport’s financial landscape continues to evolve, with capitalist power plays taking center stage off the field.