Premier League civil war ramps up as Man City claim APT rule changes are unlawful

‘This exemption is one of the very things that was found to be illegal.'

But City are fighting league proposals to introduce a “retrospective exemption for shareholder loans for the period from December 2021 until the rules come into effect”.

“This exemption is one of the very things that was found to be illegal in the recent arbitration,” writes Simon Cliff, City Group's General Counsel, in the new letter. “It is not lawful to re-introduce it into the rules.”

More than half of top-tier clubs have soft loans from owners included in their most recent accounting period. The likes of Everton, who have been propped by loans from outgoing owner Farhad Moshiri, would be in severe danger of breaching spending rules again if an exemption is not introduced.

The introduction of shareholder loans in spending calculations against Profitability and Sustainability Rules could also now be consequential for the likes of Manchester United as they plot major development in the Old Trafford area.

“Even going forward, the proposals would create market distortions,” Cliff writes in his letter pleading with clubs not to “rush” through new rules. “For example, whereas clubs have to wait for Premier League approval before receiving the benefit of commercial transactions, they would be free under the proposals to take the benefit of shareholder loans before Premier League approval.

But, irrespective of the self-interest, what City are demanding is to make the most of their tit-for-tat so-called victory on 2 of their 26 claims against the Premier League that were successful.

However, the solution the Premier League are proposing to this shareholder debt issue is the most sensible because, if it is not agreed and voted through by a least 14 clubs, then the pressure will be on for all affected clubs to go back over their accounts for all the years since PSR was adopted (2012-13) to factor in the commercial interest that should have been incurred, but wasn't.

This could well put a number of clubs retrospectively over the PSR threshold — with of course Everton FC in the biggest potential jeopardy. The horrendous financial nightmare that could be unleashed should ensure that there are enough clubs who would be in serious trouble that they will vote for the Premier League's proposed 'amnesty'.

It is becoming more difficult to fathom how at least 14 clubs understood the regulations they voted for or how to comply with said regulation. Does anyone know the exact voting figures or were they just a part of some sort of overall constitution?

If Man City decide to take legal action and the Courts found either in their favour or that they had no jurisdiction in the matter, how would the Premier League Executive react? Would it be a matter of expulsion directly or via a points deduction, would it trigger an AGM of all clubs to decide the matter?

And if it meant that Man City would be relegated or just have points deducted in each season there have been breaches?

And would the Football League have to accept them if it meant relegation?

It does seem time to re-evaluate the whole matter of how clubs manage their financial affairs and who has what responsibility and jurisdiction but that in itself might open a whole new can of worms.

The lawyers and accountants are taking substantial money out of the sport. They put nothing back in. It is in their interests to ensure the clubs keep wrangling with each other.

However, from what I am reading, the only people to benefit (looking at it from our point of view for a change) if the clubs vote to reject the proposal next week is Man City, as they presumably think they will benefit in some way.

If that is the case, and voting against will potentially do us harm, we have to vote for the proposal and stuff Man City.

Am I right?

Thanks for posting this up, and to be completely honest, I haven't been following it at all.

Even though, as you highlight, it seems Man City want to pull the drawbridge up for the more financially secure clubs, ie, 'the Top 6', and put an even bigger divide between the haves and have-nots; is that a correct way to read it?

I would like to ask, do you think at some point the Premier League will tell Man City to either abide by the rules that they signed up to when they entered the Premier League, or leave?

The reason why I ask is, would it be a truly nonpartisan league, if a club (any club for that matter) start to plead that rules that have been in place since they joined, that no longer suit them be challenged on a legal basis; which is surely what this is, isn't it? Yes, I also recognise that it takes a 70% plus vote to get rule changes through, but...

Last point, why are the Premier League having this meeting, whereby a vote will be called, before the tribunal has issued its verdict? Surely, it would be better to see what has been independently judged, before asking for a vote that, as the article says, may well be moot?

We should, I feel, if I am right in my suggestion, be promoting the idea to other clubs to think along the same lines too, preventing continued uncertainty as far as the Premier League is concerned for those clubs who have had loans from their owners.

As I have, like you, not been on top of this issue, so maybe I've been talking out of my backside instead of my mouth. Who knows. Hence my original question @ 5.

The makeup of the Premier League is now very different to the Big 5 that started it with the compliance of the not-so-big clubs at the time who saw pound signs to light up their clubs.

Now it is arguably a Big 8 and a couple of well-backed and well-run clubs holding on to their coattails who are all trying to be the Big 4 which is of course where the serious money is.

This puts Everton in a quandary having thought like a small club since he who shall not be named but claimed to be penniless while making millions for himself took over.

Do we act like a big club and put the big boys' pants on or do we go with the not so big boys?

The factions might even get to be a three- or four-way split as each club decides what's best for them rather than the interests of the sport.

Have we really gone from the sportsmanship that football was supposed to encourage to a lustful greedy arrogant collection of dictators???

Regarding compliance, either most clubs were doing remarkably well in terms of observing the P&S rules for 10+ years after they were voted in, or the Premier League were turning a blind eye.

That, of course, was until the watershed when they first charged Everton. I think the original voting figures were mentioned somewhere but I'm not sure that matters now.

I may be wrong but the Premier League appear to have largely prevented these cases from going to the external Courts system (or CAS for that matter). Disputes must be resolved through the Premier League's system of tribunals and commissions, which obviously have jurisdiction.

We'll all have to wait for what punishment Man City may get – but that would be in relation to their 115 PSR charges which is still ongoing; this current APT case is somewhat separate from that (although ultimately connected, as these shareholder loans have shown).

You wonder about how clubs manage their financial affairs and who has what responsibility and jurisdiction? I think that's pretty well established by the accountancy rules that all business companies in the UK must follow, including independent auditors, etc, overlaid by the Premier League's financial rules, which are clearly laid out – despite claims to the contrary.

Finally, I wonder at the point of these financial regulations…? Well, that's a huge discussion the clubs really ought to have... but it's probably far too late.

I think it was at least 11 clubs who have benefited from low- or no-interest shareholder loans since December 2021. The biggest being Everton.

Seems voting for the proposal is a no-brainer, but City are doing everything they can to throw a spanner in the works.

I'm just not sure how City benefit if the proposal is rejected — other than huge embarrassment to the Premier League, creating massive confusion and forcing all these clubs to resubmit modified accounts for the last 2 or 3 years, with increased retrospective PSR jeopardy for some!

I don't really see this as a battle between the haves and the have-nots. It's more a lottery as to whether each club has benefitted from a low- or no-interest shareholder loan, and how much retrospective PSR jeopardy that creates for them?

Your question that this is about rules that have been in place since they joined, that no longer suit them, be challenged on a legal basis; which is surely what this is, isn't it?

Not exactly. The ATP rules came in as a direct response to the Newcastle Utd Saudi PIF kerfuffle in December 2021. Man City were well-established atop the Premier League at that point, and objected as to the legality of the rules.

Out of 26 claims they made before the tribunal, 24 were rejected and only 2 were accepted as valid. Hence the hoo-har over shareholder loans.

Do you think at some point the Premier League will tell Man City to either abide by the rules that they signed up to when they entered the Premier League, or leave?

No, Simon, I really don't think that's the way it works. The Premier League issues its rules in their Handbook each season, and they include rules for handling disputes… This does not include provision for such unilateral dictats from Richard Masters!

Why are the Premier League having this meeting, whereby a vote will be called, before the tribunal has issued its verdict?

Err... I think the tribunal has already issued its verdict on the APT Rules that Man City challenged:

Mixed verdict delivered in Manchester City's APT case against the Premier League

The vote is on changes to the Premier League's rules that are now required to implement compliance with the two successful claims on which Man City declared victory.

To be honest, I don't know what the hell he's talking about… The tribunal issued their verdict on the case — all 175 pages — from which, this current Premier League vote is a direct result.

I think this may be more bluster on his part to create the maximum possible confusion with the Premier League and amongst their constituent clubs. But I may well have missed some other development...