Manchester City Initiates Legal Action Against Premier League, Alleging Discrimination
Manchester City is embarking on an unprecedented legal battle with the Premier League, contending that the league's scrutiny of sponsorship deals has resulted in financial losses for the club. A comprehensive 165-page legal document, obtained by The Times' Matt Lawton, outlines the club's grievances.
The dispute is scheduled to be resolved through a two-week private arbitration hearing set between June 10-21. This hearing is distinct from Manchester City's defense against 115 alleged breaches of the Premier League's regulations and financial rules, slated for November, as reported by Lawton.
In the forthcoming legal confrontation, Manchester City asserts that the Premier League's requirement of 14 out of 20 clubs to approve rule changes has enabled rival clubs to engage in discriminatory practices. These practices purportedly restrict business from the Gulf region and are perceived as deliberate efforts to impede Manchester City's on-field success, as detailed in the document.
The crux of the complaint stems from the introduction of the Associated Party Transaction rules in December 2021. These rules seek to prevent inflated commercial deals by subjecting income, such as stadium and shirt sponsorships, to evaluation by an independent assessor to determine "fair market value." Manchester City perceives this process as restrictive and anti-competitive.
The Premier League alerted its clubs to the possibility of legal action from one of its members shortly before Manchester City filed the claim on February 16. According to Lawton, the league informed its clubs of the complaint in March.
It's reported that ten to twelve clubs are expected to support the Premier League by providing witness statements or letters containing evidence, while at least one club has submitted a witness statement in favor of Manchester City, as per sources from The Times.
The outcome of June's hearing holds implications for Manchester City's defense against the 115 charges of breaching Premier League rules between 2009 and 2023. Among these charges, it's alleged that Manchester City's owner, Sheikh Mansour bin Zayed Al Nahyan, disguised inflated sponsorship deals through third parties, with four of City's top 10 sponsors having ties to the United Arab Emirates, notes Lawton. The tightening of rules in 2021 aimed to ensure commercial deals reflected fair market value.
A victory for Manchester City in the upcoming hearing could potentially bolster their defense against the 115 charges while potentially easing the scrutiny over sponsorship deals, thereby enabling clubs to negotiate deals without independent assessment. This raises concerns that wealthier clubs may further bolster their revenue streams, potentially widening the gap between them and their counterparts in the Premier League.
Manchester City, prior to Sheikh Mansour's takeover in 2008, had secured two top-flight titles in 1937 and 1968. Since then, the club has clinched the Premier League title in 2012, 2014, 2018, 2019, 2021, 2022, 2023, and 2024 while consistently outspending domestic rivals in the transfer market.
