Following the first full top-flight meeting since Manchester City’s legal challenge outcome was made public, Wolves and the rest of the Premier League clubs will receive updated rule change proposals.
City challenged the league’s associated party transaction (APT) rules on competition law grounds via arbitration.
The arbitration panel deemed these rules, designed to ensure fair market value (FMV) in deals between clubs and entities linked to their ownership, as unlawful because they excluded shareholder loans. City argued this rendered all APT rules void and accused the Premier League of misleading the other 19 clubs in its initial interpretation of the panel judgement.
The league has since sought clarification from the panel over the judgement’s implications and has been canvassing clubs about changing the aspects of the rules found to be unlawful or unfair. Now, in co-operation with its clubs, the league is exploring how to include shareholder loans within the APT rules and requested feedback by October 10 from clubs about the shareholder loans they have, or have had in the last three years.
Last Thursday, two Premier League working groups met to further scrutinise proposals for rule amendments which were put to all 20 clubs – including City – at a hybrid meeting lasting around an hour on Tuesday.
After receiving feedback at the meeting, the league will now make further updates to the proposals and distribute them again to clubs. It’s understood that the feedback was more about amendments rather than scrapping the proposals entirely.
An FMV assessment of shareholder loans might consider the interest rate that would be charged on such a loan in the open market, which could vary from club to club based on their credit score. Importantly, this interest cost would then need to be included within a club’s calculation under the profitability and sustainability rules (PSR), potentially putting more clubs at risk of breaching those rules.
In addition to the inclusion of shareholder loans, the panel also said it was procedurally unfair that City had been unable to comment on comparison data used by the Premier League board before it made a decision on whether a commercial deal was for fair market value, so the new rules are expected to afford clubs that right at an earlier stage. Some rule amendments made in February this year are also set to be reversed.
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