Manchester City’s main victory, a triumph capable of turning around the history of the Premier League, can take place in an arbitration court and not in a stadium. Next Monday, a two-week hearing will begin to resolve the surprise lawsuit filed by the Abu Dhabi-owned club against the English league, a defensive maneuver that allows the team coached by Guardiola to take the initiative in the legal battle in which he is immersed. If City manages to impose its criteria, it will not only set a favorable precedent in the face of the trial the club faces next fall – the Premier accuses the sporting entity of 115 financial infractions between 2009 and 2023 – but it would change the rules. of the competition, to the detriment of the smaller teams.
On December 14, 2021, the Premier approved the so-called Associated Party Transactions (APT) Rules. It was a way of responding to the alarm unleashed by the purchase of Newcastle United FC by the Public Investment Fund of Saudi Arabia. This acquisition added extraordinary concern to that already caused by the famous Football Leaks (Football Leaks) launched by the Portuguese computer hacker Rui Pinto and published by the digital platform of the German weekly Der Spiegel, which led to an investigation. Among the accusations of that exclusive was the one directed against Manchester City, which was accused of having exaggerated its income allegedly derived from sponsorships, when in reality much of the money obtained came directly from the pockets of the Abu Dhabi owners.
Under those APT rules, tightened in a meeting and vote last February, any sponsorship deal between a club and a company related to its owner had to be within what was considered a “fair market price,” and not an amount artificially inflated. It is up to the Premier itself to decide, through expert advice and by comparing previous contracts in its database, what price would be fair and which would not.
The English league sought to maintain its competitiveness, and prevent teams with wealthy owners from circumventing the so-called Profit and Sustainability Standards (PSR), or what is known in jargon as the fair play financial.
Basically – it is somewhat more complex, because many exceptions come into play – no Premier club can accumulate more than 105 million pounds (about 123.4 million euros, or approximately 134 million dollars) over three seasons.
The inflated sponsorships with sovereign fund companies or multimillion-dollar consortia would serve, the Premier suspected, to be able to bypass this attempt to impose financial discipline and fair treatment in the competition.
The “tyranny of the majority”
In the lawsuit that Manchester City has filed against the Premier League and that will begin to be heard on Monday, to which the newspaper has had exclusive access The Times, the club that Pep Guardiola successfully coaches, intends to end the APT rules, which it considers illegal. He is also seeking compensation for the million-dollar damages that, according to him, he would have suffered with his application.
City, in a 165-page document drafted by a powerful legal team, presents itself as the victim of a “discrimination” designed by the rest of the clubs, which have tried to stop its sporting successes by imposing what the lawsuit defines as a “tyranny.” of the majority.”
Any decision adopted by the Premier requires the favorable vote of 14 of the twenty teams that make it up. The APT rules had the support of all of them except Newcastle and Manchester City. The league has invited the rest of the clubs to participate in the arbitration trial that begins on Monday as affected witnesses. At least twelve of them have already anticipated their willingness to join the response. Only one, according to The Timeshas decided to support Guardiola’s team.
City assures in its lawsuit that sponsors linked to the club’s owners must be able to autonomously determine how much they are willing to pay, without having to submit to the evaluation or control of the Premier. Four of the club’s ten current sponsors have links to the United Arab Emirates, including Etihad Airways, which appears on the shirts and gives its name to the Manchester stadium.
A dangerous precedent
Although the lawsuit presented by City has nothing to do with the lawsuit that the club will face next autumn, a first arbitration result favorable to Guardiola’s team would represent an important precedent that would condition the decision.
That hearing will last for six weeks, before an independent disciplinary commission of the English league. If City were found guilty, they would face astronomical fines and the possibility of Guardiola’s team being relegated from the competition. Among other trophies, the Catalan coach, who has led the team since 2016, has won six Premier titles, a Champions League and a European Super Cup.
In 2020, the Court of Arbitration for Sport already revoked a sanction that kept the club away from European competition for two years and sanctioned it with 30 million euros, after UEFA detected “serious infractions” by City regarding the rules of “ financial fair play.” The Court reduced the penalty to 10 million euros, and noted that “some of the infractions had either not been proven or had expired.” The Premier League, however, which undertook its own investigation, did not have the same time limitations when investigating past infringements.
Demand for compensation
In its lawsuit, City claims “damages for the losses it has incurred as a result of the illegality of the ‘fair market price’ rules.” It indicates costs derived from delays caused by the application of the rules, sums that were not collected due to commercial agreements already closed or canceled projects. Without putting a specific figure, City’s lawyers speak of compensation worth tens of millions of euros.
The seriousness of the club’s legal challenge to the Premier derives from the relevance, cost and power of the lawyers it has hired. They are a team of four – all of them KC, King Counsel o King’s Counsel, a distinction only held by the best British lawyers – led by David Pannick, the professional who twisted the arm of Boris Johnson’s Government in 2019 before the Supreme Court and achieved the annulment of the suspension of Parliament sessions imposed by the then prime minister to falsely close the Brexit debate.
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