Manchester City: Lawyers react to legal action against Premier League

On Tuesday it was revealed that Manchester City were taking legal action against the Premier League.

On Tuesday it was revealed that Manchester City were taking legal action against the Premier League.

The dispute is set to be heard in private and relates to Associate Party Transaction rules, which relate to sponsorship deals having connections to club owners.

Manchester City are owned by Abu Dhabi royal Sheikh Mansour and have important commercial relationships with other Emirati groups such as Etihad Airways, the club’s main sponsor.

Questions were also raised surrounding Newcastle United, owned by Saudi Arabia’s Public Investment Fund, who have sponsorship deals with Jeddah-based Sela, Noon and Saudia.

But what do lawyers think?

Manchester City “strategically issued”

Udo Onwere, Partner at Bray & Krais:

“Manchester City have opened up with legal action against the Premier League relating specifically to the Associated Party Transaction rules.

“Their claim is brought on the basis that these rules are anti-competitive and discriminatory. This is an aggressive stance by Man City against the Premier League, in light of their other cases to come.

“I think the claim has been strategically issued to pressurise the Premier League as they are in a position of maximum status as the current champions.”

Protecting the sporting arms race

Daniel Gore, Senior Associate at Withers:

“These rules provide a shield against an unrestricted sporting arms race between the most wealthy owners, funnelling money into their club through parties they control and increasing the notional profitability of their club.

“Man City also appears to be challenging the fundamental mechanism of a two third’s majority vote of the Clubs to make any changes to this contract.  This is a common threshold for corporate procedure and means that there is a reasonable and transparent process.  It is hard to see how effective governance could take place without a threshold such as this, so Man City’s challenge could plunge the Premier League’s governance structure into chaos and make it harder for any decision to take place.

“This move might be seen by some sceptics as Man City trying to manoeuvre the narrative and legal arguments in its favour, ahead of its own defence of the 115 charges for breaching Profitability and Sustainability rules (and, in particular, the Associate Party Transaction rules) coming up in November.”