Premier League clubs have approved changes to the league’s Associated Party Transaction (APT) rules, the competition announced Friday, a blow to reigning champions Manchester City, which opposed the revisions.
The APT rules are designed to prevent clubs from gaining unfair advantages through commercial deals or cost reductions that don’t reflect fair market value (FMV), stemming from relationships with associated parties.
The changes aim to preserve the Premier League’s competitiveness by blocking inflated sponsorship deals with companies connected to club owners.
A two-thirds majority (14 clubs) was required for approval, and the BBC reported that 16 clubs voted in favor.
Reuters has contacted Manchester City for comment.
The Premier League said in a statement that the rule changes addressed findings from an arbitration panel last month following a legal challenge brought by City.
“The Premier League has conducted a detailed consultation with clubs – guided by multiple opinions from expert, independent leading counsel – to draft rule changes that address amendments required to the system,” it said.
“This relates to integrating the assessment of shareholder loans, the removal of some amendments made to APT rules earlier this year, and changes to the process by which relevant information from the league’s ‘databank’ is shared with a club’s advisers.”
Shareholder loans
Last month, City claimed a partial victory over the Premier League after an arbitration panel ruled on APTs the Abu Dhabi-owned club was blocked from completing.
But the league said at the time that the panel’s redacted document endorsed the overall objectives and decision-making of the APT system.
The panel found parts of the league’s APT rules broke British competition law and were unlawful because clubs could not comment on the types of data used in FMV assessments of previous deals.
City argued the rules were discriminatory in their operation, claiming they “deliberately excluded” shareholder loans, which the club said favored certain clubs and could distort the market.
“The new rules seek to ensure appropriate parity between the treatment of shareholder loans and other APTs going forward, with transitional rules clarifying the treatment of existing shareholder loans within that framework,” the league said in its statement Friday.
Any shareholder loans entered after the rule takes effect will now have to be submitted as an APT, which will be subject to an FMV assessment.
If the Premier League board finds the loan does not meet FMV, the club must either terminate or adjust the loan to reflect FMV and pay any shortfall in interest.