The Premier League has reached a settlement with Manchester City over its challenge to sponsorship rules – paving the way for the club to complete a wide-ranging deal with Etihad Airways.
In a significant development, the league told its clubs today that they have managed to find an agreement with City, bringing an end to a long-running saga.
City have effectively been at war with the Premier League, with the club successfully having regulations on commercial partnerships with associated parties (APTs) branded unlawful.
They initially acted after a proposed deal with Etihad Airlines, who sponsor the club’s shirts and hold the stadium naming rights, was blocked by the Premier League in 2023 because it was not deemed to be of ‘fair market value’ (FMV) under the rules.
A legal challenge was issued, and a tribunal sided with City, deeming the rules – brought in following the Saudi takeover of Newcastle United, ‘void and unenforceable’.
Barriers to the Etihad Airways deal have now been removed for Manchester City
However, despite the threat of further legal action, the Premier League decided to tweak rather than rewrite the regulations. Again, City acted, and the same panel that had already ruled in their favour was due to hear the case next month.
However, in an interesting move that may signal a thawing in relations between the two parties, Daily Mail Sport understands that the Premier League has now contacted clubs to inform them that they have agreed a settlement with City, and that the hearing will no longer take place.
It is also understood that barriers to the Etihad deal have now been removed and that City are confident that they will not be treated differently to any other top-flight club going forward.
In 2011, City penned a 10-year, £400m agreement with Etihad, which is the state airline of Abu Dhabi, from where the club’s owners hail. While no details of the new agreement have been released, it is expected to mark a significant uplift on the deal completed 14 years ago. The deal, like any others, will still need to go through the APT and FMV process.
The development may be seen as yet-another victory for City, although the Premier League may well be relieved to bring the chapter to a close – and will no doubt take comfort from the fact that the amended rules will remain in place.
The issue is not linked to the Premier League’s case against City for more than 115 alleged breaches of its rules on spending. A decision on the long-running saga remains elusive.
The Premier League introduced APTs in 2021 in an attempt to combat what they saw as the prospect of clubs signing inflated sponsorship deals with parties linked to their ownerships.
A decision on the saga over Man City’s 115 alleged spending rules breaches remains elusive
After their agreement with Etihad was blocked, City claimed the rules were anti-competitive and therefore unlawful. An independent tribunal panel made up of three legal big-hitters found three elements of the rules – including the fact that shareholder loans (loans to clubs from stakeholders often subject to little or no interest) were not subject to the same FMV assessment meant they were unlawful.
That same panel was due to sit next month but will no longer do so.
A statement released on Monday read: ‘The Premier League and Manchester City FC have reached a settlement in relation to the arbitration commenced by the club earlier this year concerning the Premier League’s Associated Party Transaction (APT) Rules and as a result the parties have agreed to terminate the proceedings.
‘This settlement brings an end to the dispute between the parties regarding the APT Rules. As part of the settlement, Manchester City accepts that the current APT Rules are valid and binding.
It has been agreed that neither the Premier League nor the club will be making any further comment about the matter.’
