The Premier League is facing a legal challenge believed to be led by Manchester City over plans to tighten the rules on related party transactions.
After lengthy talks, England’s top tier won approval from clubs on Friday to redesign “Fair Market Value” deal terms, which were first implemented in 2021.
The rules were initially devised due to concerns over potentially inflated sponsorship deals at PIF-owned Newcastle United. Rival clubs have grown concerned since the Football Leaks scandal, which saw allegations of unregistered payments to staff at City, who have since faced more than 100 accusations of financial breaches. City denies any allegations of impropriety.
Tightening the rules, details of which have not yet been released, has been discussed for months but was finally agreed at a meeting of senior shareholders in London on Friday.
“Following a comprehensive review of the existing Related Party Transactions Rules and Fair Market Value assessment protocols, clubs have agreed to a number of changes to further improve the efficiency and accuracy of the system,” the league said.
One club opposed to the change told Telegraph Sport that the changes had been communicated “a second time” and “by the skin of their teeth”. Clubs have been informed that one of their members has informed the Premier League that it may seek arbitration to prevent further changes.
Sources close to the talks and City initially refused to respond to suggestions made in the Sky News article that City were the club at the center of the riot. The treble winners were among eight clubs who rejected a temporary ban on loans between affiliated teams for January at the competition’s last meeting.
Fight for equal conditions
Teams with close partnerships with international clubs, such as Chelsea, Newcastle and City, stand to lose the most from restructuring.
Related party transactions (APT) rules aim to ensure a level playing field by preventing clubs from signing commercial deals at inflated prices or evading cost controls on player trading.
Clubs are understood to have been told that the Premier League is of the view that the proposed system complies with English law, despite the threat of possible litigation.
The challenge comes just days after Telegraph Sport reported that City must provide evidence of fair market value before signing winger Sávio, given he is an employee of City Football Group.
Clubs met in London on Thursdays and Fridays. On Thursday night Culture Secretary Lucy Frazer attended a dinner with club directors. Sky quoted a source close to the talks as saying “any attempt to prevent them is selfish and will ultimately harm the game.”
It is unclear how much money City, owned by Abu Dhabi, will pay to affiliated French club Troyes, which added him to its squad in 2022 but later loaned him to Girona, another team of the CFG empire, this season.
The 12-man global City Football Group is football’s biggest empire, but other English club owners now want to follow suit. Todd Boehly’s consortium, which controls Chelsea and is also led by Clearlake Capital private equity investor Behdad Eghbali, now also owns Ligue 1 club Strasbourg. Newcastle’s main owners, the Saudi Public Investment Fund (PIF), also own four clubs in the Saudi Pro League. Nottingham Forest owner Evangelos Marinakis also owns perennial Greek giants Olympiacos and is said to be in talks with Portuguese club Rio Ave over potential investment.
Everton is also the target of a proposed takeover bid by US group 777 Partners, which operates an extensive multi-club ownership strategy in Europe and South America.
Manchester United has a 25 percent ownership agreement with Ineos, which also owns Ligue One team OGC Nice and Swiss Super League team FC Lausanne-Sport. Unlike other clubs under multi-club ownership, United did not vote against a proposal to impose a temporary ban on loan deals in January.
Man City disputed the profit and sustainability accusations, while the Premier League’s chief executive Richard Masters confirmed last month that a hearing date had been set into the allegations.
The Premier League also said it was making progress towards reaching a new financial agreement for the long-awaited New Deal with the EFL at this week’s meeting.
“A number of Premier League clubs also held a productive meeting with EFL clubs this week to discuss these issues,” the league added. “Talks between clubs from the two leagues will continue in the coming weeks to build on this momentum. A good working session was also held on the design and implementation of a new financial system for the Premier League.”
Clubs also agreed the “Premier League Environmental Sustainability Commitment, which sets a minimum standard of action on environmental matters across clubs and the league”.