Manchester City has secured a significant legal victory after a tribunal ruled that Premier League rules governing sponsorship deals between clubs and related companies were unlawful, according to an exclusive from The Times.
The decision follows City’s legal challenge against the Premier League's Associated Party Transaction (APT) rules, which were designed to prevent clubs from inflating commercial deals with companies linked to their owners.
The tribunal concluded that City was unfairly blocked from securing major sponsorship deals, including with Etihad and First Abu Dhabi Bank (FAB), due to the Premier League’s failure to provide fair market value comparisons, the report says.
This ruling could have widespread consequences across the Premier League, as the current regulations did not account for interest-free loans from shareholders.
With £1.5 billion of the league’s total £4 billion borrowing made up of such loans, many clubs may now face compliance issues with profitability and sustainability rules. The outcome also raises questions about the future of financial fair play and opens the door for other clubs to seek damages, the Times article said.