Manchester City have launched legal action against the Premier League – claiming they are the victim of ‘discrimination’ from rival clubs.
An arbitration hearing will start on Monday over the challenge made by the Premier League champions against the top flight’s associated party transaction (APT) rules.
According to The Times, who broke the story, the unprecedented move has sparked ‘civil war’ between top-flight clubs and City’s pursuit of damages ‘could dramatically alter the landscape of the professional game.’
The rules were introduced following the Saudi-backed takeover of Newcastle in 2021 and are designed to maintain competitiveness in the Premier League.
It helps prevent club’s from inflating commercial deals with companies linked to the club’s owners. Any deals must be independently assessed to be within fair market value.
City view the rules, which were voted for by rival clubs, as an attempt to suppress their success after falling victims to ‘discrimination’ under league rules approved by a ‘tyranny of the majority.’
A two-week arbitration hearing is set to begin next week with the Premier League’s other 19 clubs invited to take part in the legal action.
Up to 12 clubs have so far agreed to participate where they will provide witness statements or a letter in support of the Premier League’s defence.
If City are successful with their claim, it will allow them and the Premier League’s other rich clubs to conduct sponsorship deals without independent assessment.
This would increase the amount of money they can raise, leading to a bigger transfer budget to bolster their squads.
The report claims that some rivals are already fearful that City’s claim will be successful which would have huge connotations for their outstanding alleged 115 charges with companies based in Abu Dhabi linked to deals with the club.
The clubs sponsors currently include Etihad Airways, Etisalat and Experience Abu Dhabi.
Chelsea and Newcastle who also voted against APT rules. Both hold related sponsors, therefore finding themselves in a similar position to City.
The hearing for Manchester City‘s 115 charges is separate to this lawsuit and is set to get under way in November.
The Times’ Matt Lawton, who broke the story, told talkSPORT: “Manchester City have indeed launched unprecedented action against the Premier League.
“They are trying to have rules around associated party transactions which are the sponsorship deals which are linked to the owner.
“They’re arguing that they are unlawful, they’re also suing the Premier League for damages if it proves to be the case that they are unlawful.”
Lawton added: “We’re revealing the fact the arbitration hearing starts on Monday, we didn’t know that before. And the fact that a number of clubs, I think between ten and 12 clubs, have gone into bat for the Premier League.
“What we have here is absolute civil war between the Premier League clubs and there is very provocative language in the claim by Manchester City. They talk about these financial rules that were brought in in December 2021 as being a ‘tyranny of the majority’.
“They also claim discrimination against Middle East clubs.”
It has been alleged that City concealed payments made by their owner Sheikh Mansour through third parties and disguised them as sponsorship revenue, which in itself was inflated.
Even before the Premier League tightened regulation around APTs, league rules required that related party transactions must be of fair market value. If these rules are deemed unlawful then it would significantly strengthen City’s position going into the 115 charges ruling.
City are suing the Premier League for damages, and argue that the league’s system of requiring at least 14 clubs, or two-thirds of those who vote, to implement rule changes gives the majority unacceptable levels of control.
City also accuse rival clubs of ‘discrimination against Gulf ownership’, citing the comments of one unnamed senior club executive.
The eight-time Premier League winners argue that sponsors linked to club owners, with City’s based in Abu Dhabi, should be allowed to determine how much they want to pay, regardless of independent valuation.
Of City’s ten sponsors, four of them have ties to the United Arab Emirates, including stadium and shirt sponsor Etihad Airways.
It’s understood City believe the rules introduced two-and-a-half years ago despite the fact they’ve won a record four straight Premier League titles.
Opponents to their argument believe what City are trying to do will ‘destroy’ the competitiveness of the world’s most popular football league as clubs with super-rich owners will be allowed spend unlimited amounts of money on their playing squads and infrastructure and nullify Financial Fair Play rules.
Manchester City have yet to respond when approached by talkSPORT for comment.