Michael Kenrick 22/11/2024 6comments  |  Jump to last

Everton have voted with 15 other Premier League clubs to accept the proposed changes to APT rules that were developed after Manchester City's partial success in challenging them as being unlawful.

Manchester City, Newcastle United, Nottingham Forest and Aston Villa voted against the revised rules at a meeting in London on Friday, where clubs took under 30 minutes to approve the changes to Associated Party Transaction regulations (APTs).

Friday's vote came after an independent panel found aspects of the Premier League's rules to be unlawful earlier this year, following a lawsuit instigated by Manchester City.

APT rules were formed by the Premier League to prevent clubs from profiting from commercial or sponsorship deals with companies linked to their owners that are deemed above "fair market value".

The Premier League said the rule changes relate to "integrating the assessment of shareholder loans" and "include the removal of some of the amendments made to APT rules earlier this year".

"The purpose of the APT rules is to ensure clubs are not able to benefit from commercial deals or reductions in costs that are not at fair market value by virtue of relationships with associated parties," read a Premier League statement.

Shareholder Loans 

The new rules seek to ensure that there is appropriate parity between the treatment of shareholder loans and other APTs going forward, with transitional rules clarifying the treatment of existing shareholder loans within that framework.

  • Shareholder loans entered into after 22 November 2024 will be required to be submitted as an APT and subject to an FMV assessment. If the Premier League Board determines the loan to evidently not be at FMV, the club in question shall be required to terminate or vary the loan to reflect FMV and pay any identified shortfall in interest.

  • Any Shareholder loan that was entered into before 22 November 2024 and which is replaced with other forms of financing (e.g. by way of conversion to equity or repayment) within 50 days (i.e. by 11 January 2025) will not be required to be submitted as an APT or assessed for FMV.

  • Any Shareholder loan that was entered into after 14 December 2021 but before 22 November 2024 and remaining in effect on 11 January 2025 must be submitted as an APT. If the Premier League Board determines the loan is evidently not at FMV,  the club is permitted to retain the Shareholder loan on its existing terms, though adjustments must be made to its Annual Accounts for 2024/25 onwards as if, from 22 November 2024, the loan was at FMV.

  • Any Shareholder loan that was entered into prior to 14 December 2021 and remaining in effect on 11 January 2025 must be submitted as an APT and be subject to an FMV Assessment upon any drawdown taking place after the 22 November 2024. If the Premier League Board determines the loan is evidently not at FMV,  the club is permitted to retain the Shareholder loan on its existing terms, though adjustments must be made to its Annual Accounts for 2024-25 onwards as if any drawdowns made after 22 November 2024 were at FMV.
 

Reader Comments (6)

Note: the following content is not moderated or vetted by the site owners at the time of submission. Comments are the responsibility of the poster. Disclaimer ()


Brendan McLaughlin
1 Posted 22/11/2024 at 10:27:52
Clubs have voted to accept the changes recommended by the Premier League.
Michael Kenrick
2 Posted 22/11/2024 at 14:15:20
I think this is a huge relief for Everton.

For once, the rules have been amended in a sensible way that avoids the potential PSR can of worms if Everton had been required to account for fair market value interest in their shareholder loans since 2021.

It represents a massive defeat for Man City in their campaign to disrupt and damage the Premier League… but it remains to be seen what if any effect it will have on the case involving their 115 historic breaches of financial rules, which is ongoing.

Eric Myles
3 Posted 23/11/2024 at 02:24:51
So does this mean that club owners can no longer give interest free loans to their clubs?
John Raftery
4 Posted 23/11/2024 at 13:04:59
So it's Man City, Newcastle, Forest and Villa versus the rest. The rest will include eleven American-owned clubs once the Friedkin deal is completed.

This suggests the Premier League is now firmly on the path to a Middle East v America conflict. The Asians want unlimited freedom of access to financial backing while the Americans are keen to live within strict limits.

Michael Kenrick
5 Posted 23/11/2024 at 13:29:00
Eric @3,

I think that first bullet says any shareholder loans have to include interest payments at market rates (which vary very broadly), but that presumably means no more interest-free loans.

The irony here has to be that Man City wanted the whole ATP thing scrapped as unlawful. The result has been to increase the scope of APTs to include shareholder loans, forcing Everton (and perhaps others?) to change sides and go against Man City after giving evidence for them at the tribunal.

Brendan McLaughlin
6 Posted 23/11/2024 at 13:29:03
Pretty emphatic victory for the Premier League.

Add Your Comments

In order to post a comment, you need to be logged in as a registered user of the site.

» Log in now

Or Sign up as a ToffeeWeb Member — it's free, takes just a few minutes and will allow you to post your comments on articles and Talking Points submissions across the site.


How to get rid of these ads and support TW

© ToffeeWeb