City launch legal action against the Premier League | Club & PL reach settlement | Proceedings dropped (p1147)

[Xhavenjoe]

grammer?

You were looking for me?

 

[Mad Eyed Screamer]

I'd like to think so of course but I don't know. But what I do know is that initially, when the charges were announced just two years ago, I thought that these were very serious issues. After a few days, when I'd thought about them more and gone back through all the source documentation, I was much more relaxed.

In the last 3 months or so, after the APT case and re-reading the CAS verdict, my view is what I expressed and that you responded to. I think that what looked like the most serious potential issue is actually nothing.

As I've said (and Stefan doesn't agree with, which is fine) I reckon the sponsorship stuff mainly boils down to the issue of whether Etihad & Etisalat are related parties that we should have disclosed in the published accounts. That was mentioned in the CAS verdict and appears to have been the driver in the APT rules that we're challenging.

The fact that the Etihad sponsorship was deemed fair value by CAS (and also by UEFA back in 2014) means that this is unlikely to be successfully challenged by the PL, alongside the issue of it being disguised equity investment. I can't see any way those outcomes could be disputed by an independent panel. So if the sponsorship was fair value, and properly accounted for, what's left? Related parties is the answer.

And if it was fair value and properly accounted for, what difference would it make if Etihad & Etisalat were related parties? None, other than we and our auditors would be judged as failing to recognise them as such. That would make zero difference to our ability to spend money and gain sporting advantage, but it would force us to declare the value of the contract, plus we'd be guilty of a technical accounting issue. So there could be no points deduction on that basis, and that's nearly half the charges.

I spent the afternoon with a journalist before the Chelsea game. He writes for the very prestigious New Yorker magazine (NOT the NY Times) and he's an Arsenal season ticket holder. So I went into this a bit nervous, given the mentality of Arsenal fans. But even he said the charges appeared to be theatre, rather than having any substance. David Conn, whose tune changed completely once the CAS verdict came out (probably under editorial orders) dismissed the original UEFA charges as not having any substance. And he was quite right.

Since that initial shock two years ago the scales have dropped from my eyes more and more. These charges are baseless and completely without substance.

Can you post this in the main charges thread too? Great post!

 

[tolmie's hairdoo]

This was done while Pep was staying in Abu Dhabi.

Whilst entirely separate from the 115 case, it does seem City may be very emboldened for a good reason.

 

[johnny crossan]

This was done while Pep was staying in Abu Dhabi.

Whilst entirely separate from the 115 case, it does seem City may be very emboldened for a good reason.

what was done TH?

 

[waspish]

what was done TH?

What the club just did taking them to court about apt rules

 

[johnny crossan]

What the club just did taking them to court about apt rules

That was done on Jan 25th

 

[waspish]

This was done while Pep was staying in Abu Dhabi.

Whilst entirely separate from the 115 case, it does seem City may be very emboldened for a good reason.

Would like to know the "for good reason" because at moment I don't get it..

 

[StillBluessinceHydeRoad]

Well, PB, that's what I call analysis! Well done, thanks and congratulations - a first class forensic eye.

 

[tolmie's hairdoo]

Would like to know the "for good reason" because at moment I don't get it..

City possibly knowing the 115 verdict would certainly embolden them in the other cases.

 

[Giovinco]

Stating the obvious alert but the outcome of this when it’s finally released will cause servers to crash

 

[waspish]

City possibly knowing the 115 verdict would certainly embolden them in the other cases.

Do you think the 115 is done and the club been told already then?

 

[Omar the King]

Maybe late on da ball anyways: "Meanwhile, Manchester City’s original challenge to the APT rules is still in progress. The two sides appeared before the tribunal again last week for a hearing to decide the consequences of the October judgment. The League argued that the offending rules could simply be rewritten – the so called “blue pencil test” – but the club contested that the entirety of the APT rules are invalid and unenforceable, and have been since they were introduced in 2021." - The Lawyer, Feb 7

 

[halfcenturyup]

Maybe late on da ball anyways: "Meanwhile, Manchester City’s original challenge to the APT rules is still in progress. The two sides appeared before the tribunal again last week for a hearing to decide the consequences of the October judgment. The League argued that the offending rules could simply be rewritten – the so called “blue pencil test” – but the club contested that the entirety of the APT rules are invalid and unenforceable, and have been since they were introduced in 2021." - The Lawyer, Feb 7

Well yes, if the club get a favourable decision there, it could all get very interesting.

Question for our lawyers, by the way. Isn't the blue pencil test to do with the ability to remove unlawful clauses whilst leaving the rest intact and lawful? Not really about introducing pages of new (transitional) rules? Or is that too simple like most of my questions? :)

 

[slbsn]

Well yes, if the club get a favourable decision there, it could all get very interesting.

Question for our lawyers, by the way. Isn't the blue pencil test to do with the ability to remove unlawful clauses whilst leaving the rest intact and lawful? Not really about introducing pages of new (transitional) rules? Or is that too simple like most of my questions? :)

 

[halfcenturyup]

Thanks for that. Is there a question I have ever asked that you haven't already answered?

Let me test that :)

If the tribunal finds for City that the APT rules were null and void since inception for unlawfully not treating shareholder loans as APTs/ RPTs, to what extent could the club also claim, as a consequence, that the FFP/PSR rules are also null and void since inception for the same reason?

 

[Corky]

if shareholder loans are being allowed, does that mean we could benefit from this? rather than sponsors

They don't count as income or help PSR, you still lose the money, this is just stopping soft loans which have happened through football history. SM loaned money to City at the start, then turned it into equity in the early days.

I'm not sure what FMV is for lending to a football club as they are one of the riskiest businesses, unless they have significant assets as collateral.

 

[slbsn]

Thanks for that. Is there a question I have ever asked that you haven't already answered?

Let me test that :)

If the tribunal finds for City that the APT rules were null and void since inception for unlawfully not treating shareholder loans as APTs/ RPTs, to what extent could the club also claim, as a consequence, that the FFP/PSR rules are also null and void since inception for the same reason?

Personally, I doubt it. But in any event, the allegations made in 115 go well beyond PSR.

 

[Albeeeert]

Maybe late on da ball anyways: "Meanwhile, Manchester City’s original challenge to the APT rules is still in progress. The two sides appeared before the tribunal again last week for a hearing to decide the consequences of the October judgment. The League argued that the offending rules could simply be rewritten – the so called “blue pencil test” – but the club contested that the entirety of the APT rules are invalid and unenforceable, and have been since they were introduced in 2021." - The Lawyer, Feb 7

Which is why this part of the text quoted from PL's letter to the clubs is very interesting:

"Manchester City FC seeks a declaration that the amendments approved by clubs in November (and therefore the current APT rules in force) are unlawful and void."

That seems to acknowledge that if the changes are unlawful APT as a whole is void, seemingly acknowledging that APT as a whole was void before the changes.

 

[Vic]

Which is why this part of the text quoted from PL's letter to the clubs is very interesting:

"Manchester City FC seeks a declaration that the amendments approved by clubs in November (and therefore the current APT rules in force) are unlawful and void."

That seems to acknowledge that if the changes are unlawful APT as a whole is void, seemingly acknowledging that APT as a whole was void before the changes.

Which is what City argued in their letter to the other clubs explaining why we'd won, despite the PL's misreading (or deliberate deceit). I think it might have been open to the trubunal to take a blue pencil to any offending clauses but they didn't, they said the rules were unlawful. Here's my take on it (again).

Does this explain why all the Rules are void?

The judgment says the Rules and the Amended Rules are "in breach of sections 2 and 18 of the Competition Act 1998"

Section 2 of the Act:

Agreements etc. preventing, restricting or distorting competition.​

(1)Subject to section 3, agreements between undertakings, decisions by associations of undertakings or concerted practices which—
(a)may affect trade within the United Kingdom, and
(b)have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom,
are prohibited unless they are exempt in accordance with the provisions of this Part.

(2)Subsection (1) applies, in particular, to agreements, decisions or practices which—
(a)directly or indirectly fix purchase or selling prices or any other trading conditions;
(b)limit or control production, markets, technical development or investment;
(c)share markets or sources of supply;
(d)apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e)make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

(3)Subsection (1) applies only if the agreement, decision or practice is, or is intended to be, implemented in the United Kingdom.

(4)Any agreement or decision which is prohibited by subsection (1) is void.


So - City have shown that the Rules offend subsection 1 so the agreement is unlawful and prohibited (not just individual rules) and (subsection 4) if the agreement is prohibited it is void (the whole agreement - or the "decisions by associations of undertakings" if the Rules do not constitute an agreement).

The section means that anyone can take action against an "association" and argue that it's a competition-stopping cartel. In this case, one member of the association has done it!

Section 18 prohibits abuse of a dominant position.

 

[Oyster28catcher]

Results day better be 11th May.