Premier League to address flaws in APT rules following tribunal’s decision

Following the announcement of an Arbitration Panel’s ruling, which resulted from Manchester City‘s legal challenge against the League’s Associated Party Transaction (APT) Rules, the Premier League issued a statement.

The tribunal’s ruling provides a thorough evaluation of the APT framework, taking into account both the system’s advantages and disadvantages.

In its response, the Premier League, in a statement on Monday via its website, emphasised that the tribunal’s findings largely supported its approach, stating that the decision “endorsed the overall objectives, framework and decision-making of the APT system.”

The League underscored that the tribunal recognised the necessity of the APT Rules in maintaining financial stability, integrity, and competitive balance within the league.

“The Tribunal determined that the APT Rules are necessary, pursued a legitimate objective and were put in place to ensure that the Profitability and Sustainability Rules (PSR) are effective,” the statement added.

According to the statement, Manchester City’s challenge, which questioned the legality, design, and implementation of the APT Rules, was mostly unsuccessful.

The tribunal concluded that “it is difficult to see how the PSR can be effective without the APT Rules, including the ability to restate transactions,” validating the current need for such regulations to control Associated Party Transactions.

However, the ruling also identified specific areas where the Premier League’s APT Rules did not comply with competition and public law requirements.

In particular, the tribunal highlighted that “shareholder loans should not be excluded from the scope of the APT Rules,” a provision previously supported by a majority of the league’s clubs, including Manchester City.

Additionally, the tribunal found that certain amendments made earlier this year, such as changes to the definition of Fair Market Value (FMV) and the burden of proof required, could lead to “false positives” in assessments.

The tribunal indicated that these elements “can quickly and effectively be remedied by the League and clubs.”

The Premier League also welcomed the tribunal’s backing on the procedural fairness of the APT system, including its use of an independent assessor for FMV evaluations.

It highlighted that the tribunal rejected Manchester City’s claims of bias and inconsistency in the rule’s application. Still, the tribunal recommended that “Comparable Transaction Data relied upon by the Board” should be provided to clubs earlier in the assessment process to enhance transparency.

Regarding the application of APT Rules to specific Manchester City transactions, the tribunal dismissed the majority of the club’s challenges.

It found that the Premier League Board’s FMV assessments of two Manchester City transactions were “not unreasonable” but suggested that some procedural aspects, such as the timing of data sharing, could have been improved.

Moving forward, the Premier League noted that it would integrate the tribunal’s recommendations, particularly around the inclusion of shareholder loans in APT assessments and adjustments to rule amendments introduced earlier in the year.

Despite these changes, the Premier League maintained that its rulebook remains “an effective and necessary system for assessing the FMV of APTs to ensure the integrity of the League’s Profitability and Sustainability Rules.”

While the arbitration process remains confidential, both parties have agreed to publish a redacted version of the tribunal’s decision, omitting only commercially sensitive information.

The Premier League concluded that it would continue to operate the existing APT system while working with clubs to implement the required adjustments swiftly.

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