Manchester City have launched a fresh legal challenge against the Premier League over its rules governing commercial deals linked to a club's owners.
City are contesting amendments made to the associated party transaction (APT) rules voted through by top-flight clubs last November, changes which were themselves forced on the league by an earlier legal challenge by the reigning champions.
It means there are now three live legal cases between City and the Premier League – one covering more than 100 charges against City for alleged breaches of the league’s financial rules, which the club have always strenuously denied, the initial APT challenge and now the new challenge.
The APT rules seek to ensure deals struck between clubs and entities linked to the club’s owners are done at fair market value.
City challenged the rules on competition law grounds and in October last year an arbitration panel ruled aspects of the APT rules were unlawful, among them the exclusion of shareholder loans from the fair market value test.
City argue the ruling rendered all the APT regulations void, whereas the Premier League position has always been that the ruling only required it to remedy discrete elements of the rules – something it felt it achieved with the amendments approved by 16 of its 20 clubs last November.
City’s legal counsel Simon Cliff had warned of further legal action in a letter to clubs in October if there was any "knee-jerk reaction" to amend the rules.
A clarification of the original ruling is being waited on by City and the Premier League, which means that case is still effectively ongoing.
Now though, that same panel has been asked to look at the changes made in November, with Premier League chief executive Richard Masters notifying clubs about the fresh challenge in a letter sent earlier this week.
He told clubs the league remained "strongly of the view that the amendments passed in November were lawful" and the rules "remain in full force".
Assessing shareholder loans for fair market value was incorporated into the APT rules in November, but the rules do not apply retrospectively. It is understood the fact they are not retrospective forms a key part of City’s new challenge.
Instead, the fair market assessment only applies to ongoing and future loans. The rules also allowed a grace period for shareholders to convert such loans to equity.
Among other changes approved in November was the introduction of the right for clubs to access databank information – used by the Premier League board to make a fair market assessment – at an earlier stage.
The news about City’s challenge comes less than a week before clubs gather for their first shareholder meeting of 2025 in London next Thursday.
It also comes one day after the Professional Footballers’ Association threatened legal action against the Premier League over the consultation process it has followed over proposed new financial rules.
These include top-to-bottom anchoring (TBA), which City and Manchester United are known to oppose because they believe it will harm their ability to compete against their European rivals.
TBA would effectively cap squad-related spending by any Premier League club at five times the amount paid out in central income to the league’s bottom club.
As well as accusing the Premier League of being in "flagrant breach" of rules around consultation in a letter from its lawyers, the PFA has "fundamental concerns" about TBA and new squad cost rules.
It has requested a written undertaking from the Premier League by next Tuesday to properly consult. If the union does not receive it, and/or clubs vote through the new financial rules next Thursday, it will commence legal proceedings against the league.
The PFA has enlisted Nick De Marco KC as one of its legal representatives in this case.
De Marco helped the PFA overturn a salary cap introduced by the EFL in 2020 and also helped Leicester successfully argue on appeal the Premier League did not have jurisdiction to charge the club under its financial rules.
On the pitch, Pep Guardiola (above) insists Manchester City's main focus this week has been Saturday’s FA Cup trip to Leyton Orient.
The City boss has had plenty on his mind in recent days following last weekend’s 5-1 thrashing by Arsenal and the £49.9m deadline day signing of Nico Gonzalez.
On top of that, the first leg of City’s Champions League last-16 tie against holders and record 15-time winners Real Madrid is now starting to loom large.
Despite that, Guardiola maintains this weekend’s fourth-round tie against the League One Os at the Gaughan Group Stadium has been his prime concern.
Guardiola said: "Tomorrow we play early, 1230, and after the game we will come back here to Manchester and we will have time to start to talk.
"Of course I had an eye (on the game) against Madrid but Leyton deserve my attention.
"It’s always been like that, otherwise we don’t get to the amount of semi-finals and finals of cups we have in the last five or six years.
"I am concerned and focused on Leyton. Always we have had problems away in this competition – FA Cup or Carabao Cup – even against teams in League One and Two.
"Always we struggle but we are ready for the challenge. Every game is a new opportunity."
Guardiola has suggested some players could return from injury this weekend and gain valuable minutes ahead of the Madrid encounter.
Defenders Nathan Ake and Ruben Dias, winger Jeremy Doku and goalkeeper Ederson are all hoping to prove their fitness.
"Maybe some of them (will play), we will see," Guardiola said.
Spanish midfielder Gonzalez could make his City debut following his move from Porto.
The 23-year-old offers a holding option City have lacked since talisman Rodri suffered a serious injury in September.
