A LEGAL challenge by Manchester City against Premier League rules will be heard next week - with the result potentially having major repercussions for Newcastle United.
The Times reports an arbitration hearing will start on Monday over a claim made by Premier League champions City against the top-flight’s associated party transaction (APT) regulations.
The APTs, which were significantly strengthened after Newcastle United were taken over by an ownership group dominated by Saudi Arabia's Public Investment Fund, are designed to ensure that all deals between a club and entities linked to that club’s owners are done at fair market value.
The Times reports that a 165-page claim was issued by lawyers representing City.
If the action is successful, the Times says it could assist City in the defence of their case against 115 Premier League charges laid in February 2023, because some of the charges relate to alleged attempts to disguise owner funding as sponsorship in breach of league rules. City deny any wrongdoing.
The Premier League declined to comment on the matter. Manchester City have not yet responded to a request for comment when contacted.
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It is understood clubs were told at a league shareholders’ meeting in February about a threat of legal action by one club – at the time reported to be City – against the APTs. That did not stop a majority of clubs voting to strengthen those rules at that meeting.
The Times reports that the other 19 Premier League clubs have been asked to join it in defence of its case against City.
According to the Times article, City’s lawyers argue the club are the victims of “discrimination against Gulf ownership” and that the rules make them subject to a “tyranny of the majority”. City are owned by Sheikh Mansour, the deputy prime minister of Abu Dhabi.
If Manchester City's legal claim is successful, it could mean clubs are able to sign sponsorship deals with associated parties without independent assessment.
That would potentially enable Newcastle to sign a series of lucrative sponsorship deals with Saudi-based companies without those deals being subjected to individual assessment or analysis. That could significantly increase the amount of the money the Magpies are able to spend on transfer deals and wages.
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