A Premier League club, reported to be Man City, have threatened the Premier League with legal action over new rules blocking ‘in-house’ sponsorship deals.
The Premier League has agreed tighter reforms on associated-party transactions, blocking clubs from over-inflating commercial deals with sponsors tied to ownership groups.
For example, Fenway Sports Group would be unable to negotiate terms with the Boston Globe to sponsor Liverpool shirts for, say, twice the fee paid by Standard Chartered, as they own the publication.
It is designed to ensure closer parity between the 20 clubs in the English top flight, denying those with more wealthy owners from ‘juicing’ their coffers.
But as reported by Sky News, a club believed to be Man City has now warned the Premier League that they could take legal action against these measures.
Man City, who are owned by the Abu Dhabi Royal Family under the umbrella of the City Football Group, have partnerships with at least seven companies based in the United Arab Emirates.
Those include Etihad Airways, e&, Experience Abu Dhabi, the Emirates Palace Mandarin Oriental, Aldar, First Abu Dhabi Bank and Healthpoint.
The Manchester club are currently awaiting a trial after 115 charges were levied against them by the Premier League, including failing to provide accurate information on its sponsorship revenue.
Sky News’ Mark Kleinman explains that Man City “had informed the Premier League that it could resort to arbitration proceedings to prevent the changes being adopted.”
Their argument is that the measures are “unlawful in English competition law,” however that has been disputed by the Premier League.
“The Premier League is said to be confident that the legal advice it has received, which is that the APT reforms are permissible under competition law, is robust,” Kleinman writes.
It proves to be another messy development in an increasingly tiresome drama in English football, with the sport becoming more and more of a capitalist power play off the field.
Man City are not the only club under scrutiny over state-backed spending, with Newcastle‘s association with the Saudi Royal Family another point of major contention.
Newcastle‘s new shirt sponsor, Saudi-based events company Sela, are majority-owned by the state’s Public Investment Fund and are paying the club £25 million a year.
That is a major increase on the previous £6.5 million-a-year deal with Fun88.
Everton have already been docked 10 points for breaches of the Premier League‘s profitability and sustainability rules, while they and Nottingham Forest were charged again in January, with their cases to be resolved before the end of the season.
Chelsea are currently under investigation after self-reporting inconsistencies in their finances during the heavy-spending ownership of Roman Abramovich.
