Casualties on both sides in first Man City-Premier League skirmish

MANCHESTER, England (AP):

MANCHESTER CITY and the English Premier League both claimed victory yesterday after one of the league’s key regulations relating to financial fairness was challenged.

Four-time defending champions City and the league said they “welcomed” the findings of an arbitration panel. City said the regulations were found to be “unlawful” and the league “abused its dominant position”.

The league said the tribunal found its Associated Party Transaction (APT) rules to be “necessary” and “rejected the majority of Manchester City’s challenges.”

APT rules are designed to ensure fair market value is applied to commercial deals with organisations closely aligned to club owners and safeguard the “competitive balance” of the world’s most popular soccer league. They are intended to prevent deals such as sponsorships from being artificially inflated, which could undermine the league’s Profitability and Sustainability Rules.

City said in a statement, “The club has succeeded with its claim: The Associated Party Transaction rules have been found to be unlawful and the Premier League’s decisions on two specific MCFC sponsorship transactions have been set aside.”

City added the tribunal found the rules to be “structurally unfair” and the league was “specifically unfair” in applying them to the Abu Dhabi-backed club.

One key finding in City’s favour was that shareholder loans – which could be offered at lower or no interest rates – should not be excluded from APT rules.

Of the sponsorship deals that City said were set aside following the tribunal, the league said its assessment of whether they represented fair market value had not been found to be unreasonable.

The league said a “small number of discrete elements of the rules” did not “comply with competition and public law requirements,” but added, “The tribunal upheld the need for the APT system as a whole and rejected the majority of Manchester City’s challenges. Moreover, the tribunal found that the rules are necessary in order for the league’s financial controls to be effective.”

In a separate case, City faces more than 100 charges of alleged financial breaches from the league.