Manchester City have reportedly circulated a letter to Arsenal, Chelsea, Tottenham Hotspur and other Premier League clubs, expressing their apprehension about revised financial regulations ahead of an impending vote.
The club contends that the proposed changes to Associated Party Transaction rules (APTs) are 'unlawful'. A landmark commission ruling in October acknowledged the necessity for APT oversight but pointed out several areas that breached of EU competition law, and thus amendments were required.
A letter obtained by the BBC shows Man City's chief lawyer, Simon Cliff, asserting that the latest draft still violates the commission's ruling and criticising the Premier League for hastening the consultation period, implying clubs would be "voting blind".
The BBC quotes Cliff from the letter as saying: "It is important that a new regime is grounded in rules that are fair, considered and legal. Our strong desire is to avoid any future costly legal disputes on this issue and so it is critical that the Premier League gets it right this time round."
The Premier League, objecting to earlier complaints from Man City around the case, said it "rejects in the strongest possible terms the repeated and baseless assertions" made by the club, strong denying claims about misleading its members.
The league emphasised in its letter: "To the contrary, the league is well aware of, and takes very seriously, its obligations to act fairly and with an open mind."
It stated that it has "acted fairly, transparently and responsibly in circulating considered proposals for consultation in a prompt manner".
The commission's October verdict outlined that loans to clubs from owners - referred to as ‘shareholder loans’ - should no longer be excluded from spending restrictions. Moving forward, these will now be included in spending costs and subject to interest rates, marking a change from previous regulations.
A key issue raised by Man City's lawyer Cliff revolves around the Premier League’s proposal that past shareholder loans will not be retroactively charged with interest costs - but that such charges are only to be levied on new agreements after the establishment of revised guidelines. Cliff contends this approach is against the law.
He remarked that this was "one of the very things that was found to be illegal in the recent arbitration". Cliff stressed that endorsing this would "create market distortions" and therefore be "not lawful".
Cliff stated that while Man City are "strongly in favour of robust, effective and lawful regulation", more talks are "essential" because there remains disagreement on whether the current APT framework as a whole in its current form was considered invalid by the commission.
"Common sense dictates that the Premier League should not rush into passing amendments - particularly ones which entail material legal risk - until [it] knows the outcome from the tribunal," Cliff stated. The same letter was also sent to the Football Association as well as the clubs.
Defending its standpoint on Thursday, the Premier League said in its letter: "Throughout the consultation, the league has reflected upon all feedback provided by clubs, including from MCFC, and sought the opinion of leading counsel to consider the proposals.
"That MCFC does not agree with the proposed amendments, or with the timing of the process being undertaken, does not mean the consultation itself is deficient or that the league has failed to comply with its obligations as a regulator."
The league also accused Man City of "a tendentious and inaccurate interpretation" of the minutes from a call held with clubs last month. It stated that the fact Man City "does not agree with the process does not provide a credible basis to impugn it".
In regards to potential further legal action, the league dismissed such threats as "meritless, and advanced without any attempt to articulate a credible ground on which MCFC could seek to restrain the consultation process".