Premier League and Manchester City reach agreement in regard to APT regulations
Manchester City and the Premier League have reached a settlement in their dispute over the rules governing Associated Party Transactions (APTs), following a lengthy investigation into more than 100 alleged breaches of financial rules by the club.
The dispute, which revolved around City's criticism of the way the Premier League treated shareholder loans under the rules, was initiated after City was charged by the Premier League in February 2023. An independent commission hearing, which took place between September and December last year, was a key part of the investigation.
The amended APT rules, as a result of the dispute, now include assessments of shareholder loans in fair market value determinations. This means that entities linked to clubs' owners could no longer potentially overvalue sponsorships and other commercial transactions without the APT rules, boosting a club's revenue and giving more leeway under the league's profitability and sustainability rules.
Manchester City strenuously denies the charges against them in the independent commission hearing. However, under the settlement, the club accepts that the current rules governing APTs are "valid and binding". The fair market assessment of shareholder loans applies only to ongoing and future loans, not retrospectively.
The APT rules were originally introduced in December 2021, following the Saudi-led takeover of Newcastle United earlier that year. The rules are designed to ensure that deals between clubs and entities linked to their ownership are done at fair market value.
Among other changes, clubs now have the right to access databank information earlier for fair market value assessments. The amended APT rules, which were the result of the Premier League consulting with clubs, were voted in favor by 16 teams at a meeting last November.
The settlement was reached after Manchester City launched arbitration proceedings against the current rules governing APTs on January 20. The league and City have agreed to make no further comment on the matter. City's acceptance of the amended APT rules as valid and binding appears to resolve the dispute.
The amended rules could have had a major impact on the league, as their weakening could have given clubs more leeway in their financial dealings. However, with the settlement in place, the Premier League can move forward with increased confidence in the fairness and transparency of its financial rules.
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