Premier League Faces Legal Action from Top-Flight Club over New Rule Implementation
Manchester City, the reigning Premier League champions, have taken a stand against the league’s financial rule changes that have further divided the 20 clubs. Already embroiled in a battle over alleged Financial Fair Play (FFP) breaches, City is now threatening legal action against the Premier League following a contentious vote.
The proposed changes, aimed at tightening and expediting the timetable on “related party transactions,” were tabled at a recent shareholder meeting of the 20 clubs. These changes would prevent clubs from signing commercial deals with companies under common ownership at inflated prices to boost their spending power on players. Premier League leaders believe this new rule hinders their ability to sign lucrative deals and invest in players.
Prior to the vote, Premier League bosses informed all the clubs that one club, believed to be Manchester City, was planning legal proceedings against the league, arguing that the new regulations were “unlawful” and breached competition legislation. City warned Premier League chiefs that they would consider launching arbitration proceedings to question the validity of the new rules if they were passed.
This dispute has created a clear division among the clubs, similar to when proposals to ban clubs from signing players on loan from multi-club ownership sister organizations were defeated in November. City, Newcastle, and Chelsea had four allies at that time to prevent the changes from being passed.
During the recent vote, it is understood that Burnley and one other club abstained, resulting in 12 clubs in favor and six opposed, meeting the two-thirds threshold required for a vote to pass under Premier League regulations. This narrow margin of victory left some losing sides angry and frustrated, with one club expressing outrage that the Premier League position had barely passed due to the unexpected abstentions.
City, with their significant sponsorship deals totaling £235m this season, including backing from Etihad Airways and Emirates Palace, is now considering its options to challenge the new rule. The club and its allies may seek to overturn the decision either through a future vote or the legal route.
This dispute over financial regulations comes at a time when clubs are still at odds over how future spending rules should be drafted. Discussions are ongoing regarding a potential change in the Profitability and Sustainability threshold and linking expenditure to revenues.
Despite the tensions within the league, Premier League bosses remain hopeful for progress on other matters, such as the “New Deal” for funding the English Football League (EFL). Recent discussions between clubs from both leagues have been described as productive, and there is optimism for an agreement in the near future. The Premier League spokesman stated that there is a commitment to resolving remaining issues and continuing conversations between clubs from both leagues.
In conclusion, Manchester City’s threat of legal action against the Premier League highlights the deep divisions within the league regarding financial regulations. The narrow margin of victory in the recent vote has left some clubs frustrated and questioning the relationships within the league. It remains to be seen how this dispute will be resolved, but discussions on various matters, including the funding of the EFL, continue to progress.