PL charge City for alleged breaches of financial rules


Thats a great read...i found this point particularly interesting (amongst others)

5. As a result of this decision, there will likely be one major rule change to the PL rulebook: to integrate shareholder loans into the APT Rules. The stage is set for further arguments on whether and how this is implemented. Whilst the PL insists that its rules can be amended "quickly and effectively" to incorporate the findings of the Tribunal, it may find that some member clubs, given the nature of their ownership and reported levels of interest-free shareholder loans, will be difficult to get onside in respect of any vote on changes to the PL handbook. Incorporation of shareholder loans to the APT Rules could limit the spending power of such clubs and compromise their ability to meet PSR requirements. Others, however, may view such a change as an opportunity to narrow the financial gulf between elite clubs and the rest of the league. The Tribunal's decision presents an opportunity for the PL to conduct a thorough consultation with its member clubs, where it can expect to see clubs raising pragmatic considerations, and arguments as whether the rules continue at all.

So whilst trying to curb us, certain clubs have now now made themselves susceptible to tougher PSR requirements. Its in black and white that our challenge is effectively helping to "bridge the gap" between the haves and have-nots.....and not so we could spend, spend, spend!!
 

The 6 take aways...

1. Although some of their arguments were rejected, City's victory on shareholder loans does expose frailties in the PL's rulebook. Considering that the PL has been seen to have made errors in the second consecutive award after Leicester City's recent successful appeal, the soundness of the PL's regulatory framework has been called into question. Considering the wider political context of regulation in football and ongoing plans for an independent regulator, the PL risks reputational damage in future disputes with clubs. It is also possible that this award encourages other clubs to raise disputes in relation to the PSRs and APT Rules, especially clubs involved in other recent high-profile disputes, such as Everton, Leicester City and Nottingham Forest.

2. Whilst City sought declaratory relief, injunctive relief and damages, the Tribunal did not hear submissions from the parties regarding the two latter remedies. The Tribunal noted that before doing so, the parties should "have the opportunity to consider what, if any, further relief is appropriate". Each party will undoubtedly be preparing their submissions as they digest the Tribunal's decision.

3. Clubs could be given additional access to benchmarking data to allow them to maximise deals under the APT Rules but, given that the mechanism for determining FMV was judged to be mostly fair, it does not appear that there will be a flurry of high value sponsorship APTs. This element of the decision could be particularly significant for the PL clubs which are best placed to sign sponsorship deals with associated parties close to the upper reaches of potential earnings.

4. More generally, sports clubs and competitions across the sporting world will be taking note of this decision. If a competition regulator is dominant for the purposes of its own competition, Clubs may have an open goal to challenge their regulator in both commercial and sports regulatory decisions that apply competition law. Competition regulators could also have a much wider regulatory burden in their transactions and dealings both with clubs and third parties. Challenges in respect of third-party rights, commercial arrangements and even consumer claims now have a well-reasoned competition law decision to turn to for support. Whilst the Tribunal's decision is not binding on any court in the UK (or globally), this line up of arbitrators and counsel have produced an arbitral decision which is likely to be highly persuasive to courts and competition regulators.

5. As a result of this decision, there will likely be one major rule change to the PL rulebook: to integrate shareholder loans into the APT Rules. The stage is set for further arguments on whether and how this is implemented. Whilst the PL insists that its rules can be amended "quickly and effectively" to incorporate the findings of the Tribunal, it may find that some member clubs, given the nature of their ownership and reported levels of interest-free shareholder loans, will be difficult to get onside in respect of any vote on changes to the PL handbook. Incorporation of shareholder loans to the APT Rules could limit the spending power of such clubs and compromise their ability to meet PSR requirements. Others, however, may view such a change as an opportunity to narrow the financial gulf between elite clubs and the rest of the league. The Tribunal's decision presents an opportunity for the PL to conduct a thorough consultation with its member clubs, where it can expect to see clubs raising pragmatic considerations, and arguments as whether the rules continue at all.

6. The Tribunal's findings also raise questions as to the PSRs and football regulation in general. There is little doubt that the PL will be required to improve its regulatory practices because of these proceedings, both in terms of drafting and resourcing. There is widespread agreement that some form of regulation is required to govern the finances of English football. The PL is currently considering introducing plans to replace the PSRs with a UEFA-style spending cap, whilst the UK Government recently reintroduced plans for an Independent Football Regulator. Meanwhile, challenges in the European Courts (FIFA v BZ ("Diarra")) have resulted in further competition law findings against player compensation rules. In short, the old days of deference to the 'specificity of sport' appear to be numbered. As a result, fans are likely to continue to see their favourite clubs fighting their battles in the courts, as well as on the football pitch.
 
The 6 take aways...

1. Although some of their arguments were rejected, City's victory on shareholder loans does expose frailties in the PL's rulebook. Considering that the PL has been seen to have made errors in the second consecutive award after Leicester City's recent successful appeal, the soundness of the PL's regulatory framework has been called into question. Considering the wider political context of regulation in football and ongoing plans for an independent regulator, the PL risks reputational damage in future disputes with clubs. It is also possible that this award encourages other clubs to raise disputes in relation to the PSRs and APT Rules, especially clubs involved in other recent high-profile disputes, such as Everton, Leicester City and Nottingham Forest.

2. Whilst City sought declaratory relief, injunctive relief and damages, the Tribunal did not hear submissions from the parties regarding the two latter remedies. The Tribunal noted that before doing so, the parties should "have the opportunity to consider what, if any, further relief is appropriate". Each party will undoubtedly be preparing their submissions as they digest the Tribunal's decision.

3. Clubs could be given additional access to benchmarking data to allow them to maximise deals under the APT Rules but, given that the mechanism for determining FMV was judged to be mostly fair, it does not appear that there will be a flurry of high value sponsorship APTs. This element of the decision could be particularly significant for the PL clubs which are best placed to sign sponsorship deals with associated parties close to the upper reaches of potential earnings.

4. More generally, sports clubs and competitions across the sporting world will be taking note of this decision. If a competition regulator is dominant for the purposes of its own competition, Clubs may have an open goal to challenge their regulator in both commercial and sports regulatory decisions that apply competition law. Competition regulators could also have a much wider regulatory burden in their transactions and dealings both with clubs and third parties. Challenges in respect of third-party rights, commercial arrangements and even consumer claims now have a well-reasoned competition law decision to turn to for support. Whilst the Tribunal's decision is not binding on any court in the UK (or globally), this line up of arbitrators and counsel have produced an arbitral decision which is likely to be highly persuasive to courts and competition regulators.

5. As a result of this decision, there will likely be one major rule change to the PL rulebook: to integrate shareholder loans into the APT Rules. The stage is set for further arguments on whether and how this is implemented. Whilst the PL insists that its rules can be amended "quickly and effectively" to incorporate the findings of the Tribunal, it may find that some member clubs, given the nature of their ownership and reported levels of interest-free shareholder loans, will be difficult to get onside in respect of any vote on changes to the PL handbook. Incorporation of shareholder loans to the APT Rules could limit the spending power of such clubs and compromise their ability to meet PSR requirements. Others, however, may view such a change as an opportunity to narrow the financial gulf between elite clubs and the rest of the league. The Tribunal's decision presents an opportunity for the PL to conduct a thorough consultation with its member clubs, where it can expect to see clubs raising pragmatic considerations, and arguments as whether the rules continue at all.

6. The Tribunal's findings also raise questions as to the PSRs and football regulation in general. There is little doubt that the PL will be required to improve its regulatory practices because of these proceedings, both in terms of drafting and resourcing. There is widespread agreement that some form of regulation is required to govern the finances of English football. The PL is currently considering introducing plans to replace the PSRs with a UEFA-style spending cap, whilst the UK Government recently reintroduced plans for an Independent Football Regulator. Meanwhile, challenges in the European Courts (FIFA v BZ ("Diarra")) have resulted in further competition law findings against player compensation rules. In short, the old days of deference to the 'specificity of sport' appear to be numbered. As a result, fans are likely to continue to see their favourite clubs fighting their battles in the courts, as well as on the football pitch.
No. 6 is the key finding. If PSRs were replaced by a spending cap that would be a huge improvement, provided that the cap made sense. The PL, however, are quite capable of messing even that up.
 
The 6 take aways...

1. Although some of their arguments were rejected, City's victory on shareholder loans does expose frailties in the PL's rulebook. Considering that the PL has been seen to have made errors in the second consecutive award after Leicester City's recent successful appeal, the soundness of the PL's regulatory framework has been called into question. Considering the wider political context of regulation in football and ongoing plans for an independent regulator, the PL risks reputational damage in future disputes with clubs. It is also possible that this award encourages other clubs to raise disputes in relation to the PSRs and APT Rules, especially clubs involved in other recent high-profile disputes, such as Everton, Leicester City and Nottingham Forest.

2. Whilst City sought declaratory relief, injunctive relief and damages, the Tribunal did not hear submissions from the parties regarding the two latter remedies. The Tribunal noted that before doing so, the parties should "have the opportunity to consider what, if any, further relief is appropriate". Each party will undoubtedly be preparing their submissions as they digest the Tribunal's decision.

3. Clubs could be given additional access to benchmarking data to allow them to maximise deals under the APT Rules but, given that the mechanism for determining FMV was judged to be mostly fair, it does not appear that there will be a flurry of high value sponsorship APTs. This element of the decision could be particularly significant for the PL clubs which are best placed to sign sponsorship deals with associated parties close to the upper reaches of potential earnings.

4. More generally, sports clubs and competitions across the sporting world will be taking note of this decision. If a competition regulator is dominant for the purposes of its own competition, Clubs may have an open goal to challenge their regulator in both commercial and sports regulatory decisions that apply competition law. Competition regulators could also have a much wider regulatory burden in their transactions and dealings both with clubs and third parties. Challenges in respect of third-party rights, commercial arrangements and even consumer claims now have a well-reasoned competition law decision to turn to for support. Whilst the Tribunal's decision is not binding on any court in the UK (or globally), this line up of arbitrators and counsel have produced an arbitral decision which is likely to be highly persuasive to courts and competition regulators.

5. As a result of this decision, there will likely be one major rule change to the PL rulebook: to integrate shareholder loans into the APT Rules. The stage is set for further arguments on whether and how this is implemented. Whilst the PL insists that its rules can be amended "quickly and effectively" to incorporate the findings of the Tribunal, it may find that some member clubs, given the nature of their ownership and reported levels of interest-free shareholder loans, will be difficult to get onside in respect of any vote on changes to the PL handbook. Incorporation of shareholder loans to the APT Rules could limit the spending power of such clubs and compromise their ability to meet PSR requirements. Others, however, may view such a change as an opportunity to narrow the financial gulf between elite clubs and the rest of the league. The Tribunal's decision presents an opportunity for the PL to conduct a thorough consultation with its member clubs, where it can expect to see clubs raising pragmatic considerations, and arguments as whether the rules continue at all.

6. The Tribunal's findings also raise questions as to the PSRs and football regulation in general. There is little doubt that the PL will be required to improve its regulatory practices because of these proceedings, both in terms of drafting and resourcing. There is widespread agreement that some form of regulation is required to govern the finances of English football. The PL is currently considering introducing plans to replace the PSRs with a UEFA-style spending cap, whilst the UK Government recently reintroduced plans for an Independent Football Regulator. Meanwhile, challenges in the European Courts (FIFA v BZ ("Diarra")) have resulted in further competition law findings against player compensation rules. In short, the old days of deference to the 'specificity of sport' appear to be numbered. As a result, fans are likely to continue to see their favourite clubs fighting their battles in the courts, as well as on the football pitch.
Thanks for that summary, really useful.

For me the short version is that by trying to come after us through sheer jealousy, the red cartel have opened up a seemingly never-ending can of worms for the sport, and it’s all unraveling.

I wonder if any of them regret it at all?
 
Thats a great read...i found this point particularly interesting (amongst others)

5. As a result of this decision, there will likely be one major rule change to the PL rulebook: to integrate shareholder loans into the APT Rules. The stage is set for further arguments on whether and how this is implemented. Whilst the PL insists that its rules can be amended "quickly and effectively" to incorporate the findings of the Tribunal, it may find that some member clubs, given the nature of their ownership and reported levels of interest-free shareholder loans, will be difficult to get onside in respect of any vote on changes to the PL handbook. Incorporation of shareholder loans to the APT Rules could limit the spending power of such clubs and compromise their ability to meet PSR requirements. Others, however, may view such a change as an opportunity to narrow the financial gulf between elite clubs and the rest of the league. The Tribunal's decision presents an opportunity for the PL to conduct a thorough consultation with its member clubs, where it can expect to see clubs raising pragmatic considerations, and arguments as whether the rules continue at all.

So whilst trying to curb us, certain clubs have now now made themselves susceptible to tougher PSR requirements. Its in black and white that our challenge is effectively helping to "bridge the gap" between the haves and have-nots.....and not so we could spend, spend, spend!!
Stefan has said this change is not a big deal, but it rather depends on why owners have preferred these loans rather than equity. Because they may want the money back a la Portsmouth?
 
Stefan has said this change is not a big deal, but it rather depends on why owners have preferred these loans rather than equity. Because they may want the money back a la Portsmouth?

…. Oh the irony… so the PL have to amend the rules re shareholder loans and the prospect of an owner calling in their loans which could destabilise a club financially! But, but wasn’t preventing another Portsmouth the PLs whole rationale for introducing these rules in the first place…. YCMIU.
 

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