Manchester City and the Premier League have reached a settlement in their dispute over the rules governing associated party transactions (APTs).
Under the agreement, City acknowledged that the current APT rules are “valid and binding.”
The club had launched arbitration proceedings on Jan. 20 challenging the rules, which are designed to ensure that transactions between clubs and entities linked to their ownership are conducted at fair market value. City’s challenge reportedly included criticism of how the Premier League treated shareholder loans under the regulations.
Both Manchester City and the Premier League have agreed to make no further comment on the matter.
The APT rules were introduced in December 2021 following the Saudi-led takeover of Newcastle United earlier that year.
Those rules were successfully challenged by City last year, with a tribunal finding them unlawful on multiple grounds, including that they excluded shareholder loans from fair market value assessments.
That ruling led the Premier League to consult with clubs on amendments, with 16 teams voting in favor of the revised rules at a meeting last November.
City’s acceptance that the amended rules are valid and binding appears to resolve an issue that had threatened to significantly affect the league if the rules had been weakened.
Without APT rules, entities linked to club owners could potentially overvalue sponsorships and other commercial transactions to boost a club’s revenue, putting that club in a stronger position under the league’s profitability and sustainability rules (PSR) and giving it more leeway to spend on transfer fees and player wages.
An assessment of shareholder loans for fair market value was incorporated into the APT rules last November, though the rules do not apply retrospectively. The fair market assessment applies only to ongoing and future loans. The rules also provided a grace period for shareholders to convert such loans to equity.
Other changes approved in November included the introduction of the right for clubs to access databank information – used by the Premier League board to make fair market value assessments – at an earlier stage.
City and the Premier League still await the outcome of an independent commission hearing examining more than 100 charges against the club for alleged breaches of the league’s financial rules, which City strenuously denies.
The hearing took place between September and December last year after City were charged by the Premier League in February 2023.
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