Premier League clubs are set to meet on Tuesday to discuss the outcome of the APT case brought against the governing body by Man City, according to reports.
Clubs had until the close of business on October 10 to send information to the Premier League which could shape the drafting of new financial rules in the wake of the Citizens’ legal challenge.
A dispute over an arbitration panel judgement centred on the league’s associated party transaction (APT) rules is still rumbling on, with Man City having accused the league of misleading the other 19 clubs about what the judgement means.
The APT rules seek to ensure that commercial deals between clubs and entities linked to their ownership are done at fair market value (FMV), to avoid such deals being artificially inflated to boost revenue.
Man City argue the APT rules are all void because the judgement, published earlier this month, found certain aspects of them to be in breach of competition law, whereas the Premier League’s position is that the judgement was on the whole an endorsement of the APT rules and the principles behind it, and therefore only those aspects found in breach need revising.
It is understood that the league sought further clarification from the arbitration tribunal on the judgement’s implications, but in the meantime has been working with clubs to update the sections of the rulebook found to be unlawful.
The biggest change would be the inclusion of shareholder loans as a transaction to be assessed for FMV. Clubs have been asked to supply information to the league about the mix of shareholder loans and loans converted to equity they currently have, and have had in the last three years.
This information will help the league draft recommendations that were put before the league’s Financial Controls Advisory Group (FCAG) and its Legal Advisory Group (LAG) before a wider discussion among all clubs on Tuesday.
And the Daily Telegraph claim that Man City ‘face their rivals in the Premier League’s civil war on Tuesday as the outcome of their associated-party arbitration is thrashed out between clubs for the first time’.
The report adds:
‘England’s top tier had delayed initial plans to gather the clubs last Thursday as it was still in the process of speaking to financial and legal advisory groups regarding shareholder loan regulations.
‘The mood in some club boardrooms is febrile after City’s legal chief emailed the other 19 clubs to urge against a “knee-jerk reaction” that “would be likely to lead to further legal proceedings with further legal costs”.
‘The league, however, is now ready to discuss next steps with the clubs around tightening its rules. City tabled at least 20 different allegations in its landmark arbitration claim that the league’s associated-party transaction (APT) rules were “discriminatory”.
‘The most significant outcome as far as City’s rivals are concerned is the subsequent ruling that loans from club shareholders should face fair market tests within the APT rules.
‘In the week since the tribunal findings were published, several of the other clubs have shared extensive levels of detail around their shareholder loan agreements with the competition.
‘Inevitably, there is significant variation in terms attached to these deals, which has played some part in complicating preparations to thrash out a new arrangement.’