Manchester City has secured a ‘seismic victory’ in its ongoing battle with the Premier League after a panel of retired judges deemed the league’s regulations on sponsorship deals unlawful, according to the Daily Mail.
This landmark verdict, which could have far-reaching implications for the Premier League, challenges rules designed to prevent clubs from inflating sponsorship agreements with owner-linked companies.
The ruling addresses the league’s recent rejection of two sponsorship deals involving City, stating that the regulations breached the Competition Act.
City had contested the fairness of these rules, implemented after the Saudi Arabia takeover of Newcastle United, earlier this year. They claimed fearmongering.
The judges found that the rules did not account for loans from owners and shareholders, raising concerns for clubs like Arsenal, which has substantial shareholder borrowings.
City’s legal team, led by Lord Pannick KC, argued that the league’s restrictions were unjust and aimed at undermining their success. The panel’s findings could trigger alarm across the league, as clubs may now face scrutiny regarding the classification of loans and sponsorship valuations.
The detailed 175-page report highlights that the Premier League was incorrect in halting City’s sponsorship arrangements with Etihad Airways and First Abu Dhabi Bank, citing procedural unfairness in their evaluations. The judges emphasised that the champions was not allowed to respond adequately before decisions were made.
While the ruling primarily impacts the Cityzens, it also casts doubt on the financial strategies of other clubs, as many may now find themselves in breach of financial regulations should the criteria for evaluating deals shift. As the Premier League continues its investigation into 115 charges against City, the ramifications of this verdict promise to ripple through English football, potentially reshaping the financial landscape of the top flight.
City is expected to pursue costs and damages, while the Premier League may need to reconsider or entirely overhaul its existing regulations. With rivals like Arsenal and Manchester United backing the league, this legal saga is far from over.
