Why Manchester City are suing Premier League – and what it could mean for football

Business

Since 1992 the Premier League has been funnelling previously unimagined wealth to the elite players, coaches and clubs of English football. 

For almost as long as it has existed, however, those running the league have battled to maintain the commercial and competitive balance on which its success is based.

Competition is its essence, predictability a deadly enemy.

Unlike Germany or Spain, the league has never been dominated by one or two clubs. The list of winners is not long – just seven clubs have won the title in 32 seasons – but it has never resembled a hegemony.

Until now.

Manchester City‘s recent success was their fourth successive title, a record not just for the Premier League but the 140-year history of English league football.

City won the league by just two points, and they might point out Manchester United won seven of the first 10 Premier Leagues, but it is close enough to complete dominance to explain why for several years the league has been legislating to ensure success is based on sporting merit rather than financial might.

Now, however, City’s Abu Dhabi state owners want to exert their control off the field too, suing the league – which means their 19 opponents – to overthrow rules designed to limit the financial power to which they signed up.

What’s the dispute about?

At the heart of the dispute are rules regarding “associated party transactions” (APT).

Introduced in December 2021, following the Saudi state-backed takeover of Newcastle United, APTs govern deals struck to the benefit of a club from companies with the same owner.

Their aim is to prevent owners effectively juicing their club’s income to levels not available to their competitors on the open market.

Any commercial or marketing deals, or player transfers between clubs in the same ownership group – City Football Group controls 12 clubs on six continents – have to be of “fair market value”, with clubs required to prove that they are.

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Man City title win celebrated with parade

In City’s case, the most obvious APT is the shirt and stadium deal with Etihad Airways, the Abu Dhabi state-owned airline.

Newcastle have a Saudi company on their shirt, events company Sela, while Chelsea have a shirt deal with Infinite Athlete, a leisure company in which joint-Chelsea owners Todd Boehly and Behdad Eghbali have a stake.

City now want to remove that restriction, claiming APTs are contrary to English competition law.

Were they to succeed, they would be free to blow up the already strained commercial balance of the league, and more fundamentally the uneasy but vital consensus on which its success is based.

How the league is run

Since its inception, the Premier League has been run by majority rule, set cannily at 14 of 20 clubs to avoid a traditional “big six” holding sway.

That should make the 20 club chairman, gathering today for their two-day AGM in Harrogate, close allies as well as fierce competitors. Each club has its own issues but together they constitute the most watched, and watchable, competition in world football.

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City’s representatives will take their seats having effectively declared war on that democratic model.

Their legal action reportedly declares the Premier League rules “the tyranny of the majority”, a phrase that might only be deployed with a straight face by an owner who is a senior member of an authoritarian monarchy.

The club has not commented on the case but has long argued the league’s rules legislate against new entrants seeking to compete with established players.

Manchester United, they might argue, had decades to build their commercial success on years of success, while Chelsea were able to grow the club on the back of limitless loans from Roman Abramovich.

Having climbed the ladder to the top with amazing speed, however, they now want to leave the rest behind, a move that could ultimately leave only similar sovereign-wealth-backed clubs able to compete.

For a vision of what that might be like, we need to look only as far as Paris, where Qatar has leveraged its ownership of PSG into predictable, dreary dominance of Ligue 1.

Another motive for the legal challenge?

There may be another motive too.

City has been locked in litigation with the league for two years over 115 charges of largely financial rule breaches. If proven, they would constitute systematic abuse punishable by fines, points deductions, perhaps even the retrospective removal of trophies.

If one of the league’s regulations were ruled unlawful, it might undermine or invalidate others and make the path for City’s lawyers easier to navigate. It also unquestionably makes life harder for the Premier League’s legal team, whose budget the Times reports has quadrupled to £20m fighting the City case alone.

All of this makes for a monumental challenge to Richard Masters, the Premier League chief executive who has faced huge turbulence since succeeding Richard Scudamore just as a new generation of richer foreign owners were drawn to England’s global clubs.

No wonder then that he was not at the Etihad to hand over the trophy last month.

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