Manchester City face their rivals in the Premier League’s civil war on Tuesday as the outcome of their associated-party arbitration is thrashed out between clubs for the first time.
England’s top tier had delayed initial plans to gather the clubs last Thursday as it was still in the process of speaking to financial and legal advisory groups regarding shareholder loan regulations.
The mood in some club boardrooms is febrile after City’s legal chief emailed the other 19 clubs to urge against a “knee-jerk reaction” that “would be likely to lead to further legal proceedings with further legal costs”.
The league, however, is now ready to discuss next steps with the clubs around tightening its rules. City tabled at least 20 different allegations in its landmark arbitration claim that the league’s associated-party transaction (APT) rules were “discriminatory”.
The most significant outcome as far as City’s rivals are concerned is the subsequent ruling that loans from club shareholders should face fair market tests within the APT rules.
In the week since the tribunal findings were published, several of the other clubs have shared extensive levels of detail around their shareholder loan agreements with the competition.
Inevitably, there is significant variation in terms attached to these deals, which has played some part in complicating preparations to thrash out a new arrangement.
Some clubs, such as Arsenal – who previously borrowed more than £200 million – are already scrutinised under Uefa rules.
However, other heavy owner borrowers – such as Everton – could be more significantly affected by the integration of arrangements in the league’s APT rules.
Richard Masters, the Premier League chief executive, wrote to clubs 10 days ago saying they would be taking “the necessary time to develop our proposals and the associated draft rule amendments”.
The clubs had already been pencilled in to meet last Thursday to discuss three potential amendments to the APT rules, but it was never the plan to vote on any law change that day. There will be further meetings of the league financial control group and its legal advisory group, before a final vote can be scheduled.
Immediately after the arbitration ruling was shared by clubs, the league said the rules “can quickly and effectively be remedied by the league and clubs”.
City moved swiftly however to reject that claim, and argued any new rules regarding APTs would be “unlawful” following the findings of their hearing.
