Everything you need to know from the Man City v Premier League ruling

With both Man City and the Premier League claiming victory from the APT legal ruling here is a breakdown of the judgment

The verdict is in on the landmark associated-party transaction (APT) legal battle between Manchester City and the Premier League, but what are the key findings? Telegraph Sport breaks down the judgment…
Manchester City specifically challenged some recent decisions taken by the Premier League in respect of commercial transactions that were deemed to be above fair market value.
In respect of Etihad Aviation Group (EAG) and First Abu Dhabi Bank (FAB) deals from 2023, the tribunal found that these transactions had been assessed conscientiously and did not find that the assessments over fair market value were unreasonable.
Nielsen Sports, who advise the Premier League on its valuations, reportedly said that “the breadth of the rights granted to EAG under this single transaction was as large as the rights that some football clubs would grant across all of their sponsorship agreements with multiple counterparties”.
However, it found that the decision with regard to the EAG and FAB transactions were “reached in a procedurally unfair manner”. The tribunal specifically highlighted not giving City an opportunity to respond to the benchmarking analysis in the EAG deal and not providing comparative transactions entered into by other clubs in respect of the FAB deal. 
It said that there were also “unreasonable” delays of around three and two months respectively for the FAB transaction and a separate Emirates Palace (EP) deal.
The panel also judged that rule amendments introduced earlier this year, which included putting the burden of proof on clubs to show that sponsorship deals are of fair market value, increased the risk of “false positives” and “ a distortion competition”.
The background to the Premier League’s financial rules is laid out and highlights how the framework initially stemmed from Portsmouth’s insolvency in 2009-10 and a desire to limit a club’s losses so that their future was not put at risk.
It was felt necessary to underpin this with rules around related party transactions (RPT) but the Newcastle takeover in 2021 became the catalyst for further major change.
The tribunal detailed how an unnamed person emailed the Premier League on behalf of his club and 10 others in an attempt to stop any RPT five days after Newcastle United’s takeover in 2021. 
At a vote the following week, 18 clubs agreed to suspend any RPT for around six weeks, pending the formation of a new advisory group which ultimately led to a newly named Associated Party Transaction system. Newcastle and City were the only clubs who did not vote in favour of the suspension.
One striking part of the report is the section that deals with the list of witnesses in the arbitration and highlights the depth of the bitter division now inside the Premier league. For the claimant (Manchester City): Chelsea, Newcastle United, Nottingham Forest and Everton. For the respondent (the Premier League): Brighton, West Ham, Manchester United, Liverpool, Tottenham and Arsenal. Brentford, Bournemouth, Fulham and Wolves also wrote letters in support of the rules.
Perhaps the most eye-catching line in City’s initial submission related to the so-called “tyranny of the majority”, whereby a two-thirds majority can impose rules, and the claim that they were victims of discrimination. The tribunal did not “find that the APT Rules were targeted specifically at clubs owned by companies in the Gulf region but were rather intended to apply to any club that might use APTs”.
It revealed that an unnamed witness was called by the Premier league to give evidence in respect of an email, dated October 12, 2021, which was said by City’s lawyers to show that the APT Rules were targeted at certain clubs, particularly those in “the Gulf region”. 
However, the tribunal said that “it was clear from his evidence that it was not so targeted”. The witness had said that there would have been the same concerns about a US takeover and that “there had been concern for a number of years about related party transactions… at above market value”. It was decided that there was sufficient evidence for the Premier League to have concern over the efficacy of the rules.
In releasing the verdict, the Premier League’s main takeout was that the tribunal “endorsed the overall objectives, framework and decision-making of the APT system”. It also found that there was evidence to justify moving from when club’s themselves identified related party transactions in their accounts to an assessment at the point of transaction itself.
The most significant change to arise from the tribunal relates to shareholder loans. These were exempted from the APT rules after it was agreed that, as they were direct from an owner and transparent, they should be viewed differently from fair market value of commercial revenues.
Manchester City argued that they are obviously an APT transaction — as they come direct from shareholders — and are either no-interest or low-interest bearing, so not at fair market value.
The key context here is that Manchester City have no debt to their owners, whereas many of their rivals do. Indeed, the tribunal reports that £1.5 billion of borrowings have been made to clubs by shareholders.
The tribunal sided strongly on this point with Manchester City, saying that, “a difference of treatment between shareholder loans and other APTs is, in our view, an obvious distortion of competition as it permits one form of subsidy. A limitation in the scope of the APT Rules so as to cover only certain APTs is discriminatory.”
This means the rules now have to be adapted so that these owner loans are accounted for in the profit-loss calculations, presumably so that ‘fair market’ interest is added. This could significantly impact the spending power of clubs like Arsenal, Brighton and Everton whose owner debt runs into the hundreds of millions.