Premier League clubs have officially voted by the two-thirds majority needed to approve changes to Associated Party Transaction (APT) rules.
The rules themselves place a limit on how much companies associated with clubs can feed into the club itself, such as through sponsorship deals.
There has been the accusation that some clubs had been inflating these deals ‘above market value’ to allow themselves to spend more and pay higher wages whilst still complying with the Premier League’s profit and sustainability rules.
A statement released by the Premier League read, “The amendments to the rules address the findings of an arbitration tribunal following a legal challenge by Manchester City to the APT system 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. These rules were introduced to provide a robust mechanism to safeguard the financial stability, integrity and competitive balance of the league.”
The statement explained further what the changes were, saying, “[The changes] relates to integrating the assessment of shareholder loans, the removal of some of the amendments made to APT rules earlier this year and changes to the process by which relevant information from the league’s ‘databank’ is shared
One of the major accusations as part of City’s ongoing legal battles was that they had used APT rules to ‘inflate’ the income the club has received through sponsorships by companies owned by the Abu Dhabi government, of which City Chairman Khaldoon Al Mubarak is a member.
The legal challenge that City launched that has directly led to these rule changes came because the Premier League rejected a huge new sponsorship deal by Etihad Airways – the national airline of the UAE, of which Abu Dhabi is a constituent member – that the League deemed as not being of fair market value.
The vote itself was seen as a significant moment in the Premier League’s ability to place limits on itself, with 13 of the 20 clubs needing to approve the changes for them to pass and hand City a major defeat.
If the vote failed to pass, critics feared that it would give free rein for clubs whose owners have a wide range of associated companies to raise income through these sponsorship deals to high levels without any scrutiny.
It is reported that Newcastle United, Aston Villa, and Nottingham Forest were the clubs that joined City in voting against the APT rule changes.
