Manchester City to take legal action against Premier League

Manchester City are due to face the Premier League in a legal battle over the organisation’s commercial rules next week.

Reports in the media suggest an arbitration hearing surrounding the legality of the league’s associated party transaction (APT) rules, which determine whether sponsorship deals are financially ‘fair’, has been set for 10-21 June.

The remaining Premier League clubs that City are the club in question, with the league offering the remaining 19 members the opportunity to make witness statements as part of the case.

Neither the Premier League nor Manchester City have commented publicly about the case.

The rules regarding APTs are aimed at clubs signing sponsorship deals with companies linked to their owners.

They were tightened following a vote by Premier League clubs in February.

It means that any such sponsorship deals have to be at a fair market value and not artificially inflated. If there were no such rules then clubs could agree sponsorship deals as high as they wanted with no challenge, which would increase the amount they could spend under Profit and Sustainability rules (PSR).

At the time, the Premier League said the move would "enhance the efficiency and accuracy of the system".

PSR rules permit clubs to lose a maximum of £105m over three years.