Manchester City have won a big legal battle with the Premier League over rules about ‘inflated’ sponsor deals, with the verdict set to have a seismic impact on Tottenham and other Premier League clubs.
Sponsorship deals permitted
City legally challenged the Premier League after they put in place new rules, whereby certain sponsorship deals were branded unlawful.
However, a panel of retired judges has ruled that these regulations introduced by the Premier League, preventing clubs from inflating deals with companies linked to their owners, breach the Competition Act.
This verdict could thus open the door for the likes of Man City and Newcastle to sign off on significantly higher deals with related parties.
Impact on Spurs and others
This ruling puts the financial regulations currently in place in jeopardy as it allows a massive leeway for clubs such as Man City to artificially inflate their revenue.
Clubs like Spurs, who had a competitive advantage when it comes to PSR, owing to their healthy balance sheet, might now forfeit some of that advantage.
Additionally, Associated Party Transactions (APTs) have also been deemed unlawful, which means that clubs will no longer be allowed to borrow huge sums from their shareholders as the likes of Arsenal and Brighton have done recently.
Separate from City’s financial breaches
While this verdict is undoubtedly a big win for City, it is separate from the 115 alleged financial breaches that the club have been accused of by the Premier League.
However, the Mail points out that this verdict does impact some of those alleged breaches as City’s previous 10-year deal with the Abu Dhabi-based airline features heavily in the case on those 115 charges.