Premier League clubs approve changes to associated party transaction rules
https://www.nytimes.com/athletic/5940017/2024/11/22/premier-league-apt-rule-changes-manchester-city/
Premier League clubs have approved changes to the associated party transaction (APT) rules at a meeting in central London.
Manchester City, Aston Villa, Newcastle United and Nottingham Forest were the only clubs to vote against the proposed alterations.
Manchester City, whose arbitration with the Premier League in the summer led to an independent panel finding some aspects of the APT rules unlawful, were the most vocal about the changes being knocked down.
In the weeks since that decision was made public in October, legal letters were being sent between City and the Premier League over how the issue should be resolved.
“The amendments to the rules address the findings of an arbitration tribunal following a legal challenge by Manchester City to the APT system earlier this year,” read a statement from the league.
“The Premier League has conducted a detailed consultation with clubs — informed by multiple opinions from expert, independent leading counsel — to draft rule changes that address amendments required to the system.
“This relates to integrating the assessment of shareholder loans, the removal of some of the amendments made to APT rules earlier this year and changes to the process by which relevant information from the League’s ‘databank’ is shared with a club’s advisors.
“The purpose of the APT rules is to ensure clubs are not able to benefit from commercial deals or reductions in costs that are not at fair market value (FMV) by virtue of relationships with associated parties.
“These rules were introduced to provide a robust mechanism to safeguard the financial stability, integrity and competitive balance of the league.”
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Premier League clubs have changed associated party transaction rules. Here’s what it means
The Premier League, due to being unable to process APT deals and potentially open to damages from other clubs trying to secure associated party deals in the interim period, were keen to table their list of amendments as quickly as possible.
They have been consulting with clubs for more than a month regarding changing the APT rules, with Manchester City’s view being that no vote should take place until the tribunal has provided its full guidance on the APT rules.
Manchester City were strongly against the changes (Naomi Baker/Getty Images)
The Premier League have spent the last few weeks addressing the points that were found to be unlawful in the tribunal, leaving the other regulations in place.
The new rules, the Premier League say, will ensure there is parity between the treatment of shareholder loans and other APTs going forward.
Transitional rules will be in place to clarify how existing shareholder loans will be treated within that framework. Going forward, shareholder loans will need to be submitted as an APT and subjected to a fair market value assessment.
If it is determined that the loan is not fair market value, then the club will have to terminate or vary the loan to reflect what the Premier League deems to be fair market value and also pay any shortfall in interest.
Another change to the rules is that any shareholder loan which is replaced with other forms of payer — such as being converted into equity or repayment — within 50 days will not be required to be submitted as an APT or assessed for fair market value.
If a shareholder loan was entered into the accounts after December 14, 2021 and remains in effect on January 11, 2025, then it must be submitted as an APT.
Should the Premier League then determine it is not at fair market value, then the club is allowed to retain the loan on its existing terms, although adjustments will need to be made to its accounts for 2024-25 as if it was at fair market value.
Aston Villa’s co-owner, Nassef Sawiris, had called for the vote to be delayed, telling the Daily Telegraph on Wednesday that they would be “voting against the proposed APT rules”, lobbying instead for a three-month delay.
But 16 top-flight clubs voted in favour of amending the rules now, meaning the Premier League has scored a victory.
The Premier League also announced that clubs have unanimously agreed to establish a new in-house media operations business after 20 years in partnership with IMG.
The plan is for all international media content production and distribution to be brought in-house for the start of the 2026-27 season.
The meeting also saw the dates for the 2025-26 campaign confirmed with the opening round of fixtures set to begin on Saturday, August 16 with the closing weekend coming on Sunday, May 24.
