City launch legal action against the Premier League | City win APT case (pg901)

[Chris in London]

That's weird. How can you have a grace period for making the rules lawful. They either are lawful at a specific moment in time, or they aren't, in which case they are unenforceable?

I know: "We introduced rules two years ago for the death penalty for pitch invasions. What? We can't do that? OK we will keep applying the current rules so everyone gets used to them in two years' time. What's that you say? Your husband was put to death last year for this? Can't do anything about that. The rules weren't unlawful then......".

False comparison.

The rules are currently unlawful and unenforceable. New rules will be introduced which will be both lawful and enforceable. However these rules will apply to existing ongoing contractual arrangements. Those arrangements automatically breach the new rules because they haven't been sanctioned by the PL prior to being implemented.

A period of grace before the new rules are applied towards existing contractual arrangements seems wholly reasonable.

 

[TheGhost]

Can someone please post an archive link to the Ziegler article?

 

[cheekybids]

False comparison.

The rules are currently unlawful and unenforceable. New rules will be introduced which will be both lawful and enforceable. However as a matter of discretion these rules will apply to existing ongoing contractual arrangements. Those arrangements automatically breach the new rules because they haven't been sanctioned by the PL prior to being implemented.

A period of grace before the new rules are applied towards existing contractual arrangements seems wholly reasonable.

& would the period of grace expand to others when the laws were unlawful?

 

[Stoned Rose]

But, but, but.....I thought the Premier League said it was very easy to amend the rules?

After reading this below, it seems it may drag on for a fair while yet. Apparently they're talking about applying different interest rates to different clubs for shareholder loans based on the credit score of each club (which, as unfair as that sounds, is arguably the proper way to do it) and some clubs aren't happy about it!

"Concerns have been raised to the Premier League that proposed new rules on shareholder loans will hand a further advantage to the top flight's wealthiest clubs.
A challenge to the league's associated party transaction (APT) rules by Manchester City has forced it to include a fair market value assessment of such loans in amended rules to be put before clubs at a meeting later this month.
Club owners and other shareholders were previously able to put in interest-free loans, but it is now proposed an effective rate of interest will be applied to them which will vary from club to club depending on their credit score.
The PA news agency understands some clubs have questioned the charging of variable rates - arguing it hands an advantage to clubs with the deepest pockets.
However, the league is understood to have advised clubs who pushed back that the rate could not be the same across all clubs for legal reasons.
An arbitration panel found the APT rules were unlawful because they excluded shareholder loans.
The rule amendment will not require fair market value interest charges to be backdated to the time the loan was first issued. However, it is understood the proposed amendment would mean an effective interest rate would be applied to any existing loan going forward after a grace period - not just to new loans.
During the grace period, club owners and shareholders who have put in loans will have the option to convert them to equity if they wish, though doing so makes taking their money out less straightforward.
Clubs are set to vote on a number of APT rule amendments at a meeting in London on November 22.
One involves replacing "would" with "could" in the wording of what constitutes fair market value within the rules, which should have the effect of providing more wriggle room to clubs."

Getting pushback re the new attempt at the rules already.

 

[halfcenturyup]

False comparison.

The rules are currently unlawful and unenforceable. New rules will be introduced which will be both lawful and enforceable. However as a matter of discretion these rules will apply to existing ongoing contractual arrangements. Those arrangements automatically breach the new rules because they haven't been sanctioned by the PL prior to being implemented.

A period of grace before the new rules are applied towards existing contractual arrangements seems wholly reasonable.

Law a complete mystery to me, as you can frequently tell.

If the rules are unlawful because they currently don't include shareholder loans, we are saying the new rules will still be unlawful in the grace period, but the law doesn't care because it's wholly reasonable to have a grace period? Or that they will be lawful during the grace period just because it's a grace period, despite the treatment of shareholder loans in the grace period being the same as the treatment when they were found to be unlawful. Pretty circuitous logic?

I mean it's not like they are implementing new lawful rules with a grace period, which at least makes sense to me, a confused non-lawyer.

 

[halfcenturyup]

Can someone please post an archive link to the Ziegler article?

I doubt it's worth it. He never understands what he is talking about, even as much as I do.

But I will try to knock one up for you.

 

[Blue Pete]

For some reason the phrase 'oven ready' springs to mind.

Remember when the changes needed were small and will be easy. Yet somehow its ending slightly more complicated than thought, who'd have known.

 

[blueste41]

But, but, but.....I thought the Premier League said it was very easy to amend the rules?

After reading this below, it seems it may drag on for a fair while yet. Apparently they're talking about applying different interest rates to different clubs for shareholder loans based on the credit score of each club (which, as unfair as that sounds, is arguably the proper way to do it) and some clubs aren't happy about it!

"Concerns have been raised to the Premier League that proposed new rules on shareholder loans will hand a further advantage to the top flight's wealthiest clubs.
A challenge to the league's associated party transaction (APT) rules by Manchester City has forced it to include a fair market value assessment of such loans in amended rules to be put before clubs at a meeting later this month.
Club owners and other shareholders were previously able to put in interest-free loans, but it is now proposed an effective rate of interest will be applied to them which will vary from club to club depending on their credit score.
The PA news agency understands some clubs have questioned the charging of variable rates - arguing it hands an advantage to clubs with the deepest pockets.
However, the league is understood to have advised clubs who pushed back that the rate could not be the same across all clubs for legal reasons.
An arbitration panel found the APT rules were unlawful because they excluded shareholder loans.
The rule amendment will not require fair market value interest charges to be backdated to the time the loan was first issued. However, it is understood the proposed amendment would mean an effective interest rate would be applied to any existing loan going forward after a grace period - not just to new loans.
During the grace period, club owners and shareholders who have put in loans will have the option to convert them to equity if they wish, though doing so makes taking their money out less straightforward.
Clubs are set to vote on a number of APT rule amendments at a meeting in London on November 22.
One involves replacing "would" with "could" in the wording of what constitutes fair market value within the rules, which should have the effect of providing more wriggle room to clubs."

I said this would likely happen at the time and questioned (and still do) if clubs such as Everton would be able to obtain a loan at all in the open market given their credit score.

 

[halfcenturyup]

Can someone please post an archive link to the Ziegler article?

Loading…

archive.ph

 

[KS55]

I thought the intention was to make appropriate adjustments in PSR to remove the benefit of interest-free loans. Sounds like they are actually going to force clubs to pay the interest or convert the loans to equity.

This will take money out of football unnecessarily. Surely, allow the interest free loans, and ring fence the saved money for club projects that are outside the remit of PSR?

This is what happens with tinkering. Rewriting the rules from scratch in the light of the arbitration decisions would be so much better. ( I would scrap APT and rely on IAS rules, like UEFA.) The grace period is also nonsense, what is the grace period equivalent for sponsorships? I realise that charging or converting to equity has some practical time difficulties but the grace period still seems unfair to me.