Man City v The Premier League

Summary

Manchester City, fresh from securing their fourth consecutive Premier League title, has initiated legal action against the Premier League over financial regulations. The dispute centers on rules introduced to prevent clubs from inflating commercial income through related party transactions. Critics argue that Man City, owned by the Abu Dhabi royal family, may be seeking to exploit financial might to maintain dominance, potentially undermining the competitive balance of the league. The case raises questions about the influence of money in football and the future of the sport as a meritocratic competition.

Takeaways

• 🏆 Manchester City has won their fourth Premier League title in a row and is now involved in legal action against the Premier League.
• 📚 The Premier League is investigating 115 accusations of financial irregularities at Manchester City.
• 🤝 The legal dispute is centered around 'Associated Party Transaction' regulations that aim to prevent clubs from inflating their commercial income through related party deals.
• 💰 Manchester City is challenging the Premier League's rules on Associated Party Transactions, which could potentially give them an unfair financial advantage.
• 🎯 The rules are designed to ensure that sponsorship deals and transfers between related clubs are at fair market value, preventing wealthier clubs from dominating the league.
• 👥 The Premier League's legal department, which serves all clubs including Manchester City, is dealing with the case, highlighting a potential conflict of interest.
• 👑 Manchester City is owned by a member of the Abu Dhabi royal family, and the club has significant sponsorship deals with Abu Dhabi-based entities, which are under scrutiny.
• 🌍 The implications of the case could affect the balance of power and competitiveness in English football, with state-backed entities owning clubs like Manchester City and Newcastle United.
• 💼 The legal action by Manchester City could be seen as an attempt to distract from the 115 financial irregularities charges they face in November.
• 📉 The financial disparities in football are vast, with the top clubs having significant advantages, potentially making the game less competitive and less enjoyable for fans.
• 🎥 The discussion highlights the transformation of football from a community-based sport to a global business, with the Premier League's founding and Sky's involvement playing a key role in this shift.

Q & A

Why has Manchester City launched legal action against the Premier League?

Manchester City has launched legal action against the Premier League to challenge certain regulations introduced three years ago that limit 'Associated party transactions', which are marketing or commercial deals with companies owned by the same person or entity as the club. The aim of these rules is to prevent owners from inflating their commercial income by funneling money from companies they also own directly into the football club.

What are 'Associated party transactions' and why were they introduced?

Associated party transactions refer to deals with companies that are owned by the same person or entity as the club. They were introduced to regulate any marketing or commercial deals and transfers between clubs in the same ownership group, ensuring that these transactions are at a fair market value and to prevent owners from artificially inflating the club's commercial income.

What is the potential impact of Manchester City's legal action on the Premier League and its clubs?

The legal action could potentially undermine the financial regulations that are designed to maintain competitive balance in the Premier League. If Manchester City succeeds in challenging these regulations, it could allow them and other wealthy clubs to further flex their financial might, potentially leading to a less competitive league and making it harder for smaller clubs to compete.

How does the Premier League ensure that sponsorship deals are done at a fair market rate?

The Premier League has rules that require clubs to demonstrate that their sponsorship deals, such as stadium naming rights or shirt sponsorships, are done at a fair market rate. This is to prevent clubs from inflating the value of these deals by having associated companies pay more than the market rate, which would give them an unfair advantage.

What is the significance of Manchester City's ownership by the Abu Dhabi royal family in this context?

Manchester City's ownership by the Abu Dhabi royal family is significant because it highlights the potential for state-backed entities to use their wealth to gain an advantage in football. The club has Abu Dhabi-based entities as some of its biggest sponsors, and it has to demonstrate that these deals are conducted at a fair market rate, which is part of the regulations being challenged.

What are the broader concerns about the influence of money in football as discussed in the script?

The broader concerns include the growing gap between wealthy and less wealthy clubs, the potential for money to distort the competitive balance of the game, and the impact on the grassroots level of football. There is also a concern about the loss of the 'fairy tale' quality of the game, where smaller clubs can rise to the top, and the potential for the game to become less watchable if it becomes too predictable.

How has the Premier League's relationship with Sky impacted the game's financial landscape?

The Premier League's relationship with Sky has significantly transformed the financial landscape of football. The league's breakaway in 1992 and the marketing of live rights to Sky's satellite television service led to a huge increase in revenue, which has contributed to the professionalization and commercialization of the game.

What is the potential consequence of Manchester City's legal action for the future of football competitions like the FA Cup?

If Manchester City's legal action is successful, it could lead to an even greater focus on lucrative competitions like the Champions League, potentially at the expense of domestic cups like the FA Cup. This could result in fewer matches for smaller clubs and a further widening of the financial gap between top-tier and grassroots football.

How does the script suggest that the Premier League's legal department is handling the case involving Manchester City?

The script suggests that the Premier League's legal department, which works for all clubs including Manchester City, is taking the case very seriously. It mentions that the department's budget has quadrupled to deal with the Manchester City case, indicating a significant commitment of resources.

What is the context of the 115 accusations of financial irregularities against Manchester City mentioned in the script?

The 115 accusations of financial irregularities against Manchester City refer to separate charges that the club will have to defend in November. These allegations, which remain unproven, relate to breaches of financial regulations, including disguising revenues and sponsorship deals, which are the types of practices that the Premier League's rules are designed to prevent.

What is the potential impact of Manchester City's legal action on the perception of fairness in football?

The legal action could influence the perception of fairness in football, especially if it is seen as an attempt to challenge rules that are designed to level the playing field. If successful, it might be viewed as favoring wealthy clubs and undermining the competitive balance that makes football engaging for fans.

Outlines

00:00

🏆 Manchester City's Legal Battle with Premier League

The video discusses Manchester City's unprecedented legal action against the Premier League, challenging financial regulations introduced three years prior to limit 'Associated Party Transactions'. These rules aim to prevent club owners from inflating commercial income by funneling money from companies they also own into the football club. The discussion includes examples of how this could occur, such as overvaluing sponsorship deals, and touches on the broader implications for competitive balance in the league. It also mentions that the Premier League is investigating 115 accusations of financial irregularities against Manchester City.

05:01

🤔 The Impact of Wealthy Ownership on Football

This paragraph delves into the claims by Manchester City that the Premier League's financial rules discriminate against new entrants and Gulf ownership. It contrasts the club's history and the evolution of financial regulations with the club's current position at the top of the Premier League. The conversation highlights the potential influence of state-backed entities like those from Abu Dhabi and Saudi Arabia on the Premier League's competitive balance and the global profile that owning a football club brings. The paragraph also speculates on the support Manchester City might have among other clubs and the broader concerns about money in football.

10:02

📊 The Financial Disparity and Its Effects on Football

The discussion in this paragraph centers on the financial disparities within football, the impact on grassroots levels, and the influence of money on the sport's competitive nature. It reflects on the transformation of English football from a community-based sport to a global business, with a focus on the role of Sky in marketing and broadcasting. The paragraph also addresses the challenges faced by smaller clubs and the potential consequences if financial regulations were to be relaxed, leading to a potentially boring and uncompetitive league.

15:07

🎥 The Changing Landscape of Football and Manchester City's Future

This final paragraph wraps up the discussion by emphasizing the business aspect of football and the widening gap between top and bottom-tier clubs. It references the success of Manchester City and the potential long-term effects of their legal action on the competitive landscape of football. The conversation also touches on the romanticized view of football and the reality of its financial dynamics, concluding with the acknowledgment that while the sport has evolved into a business, the spirit of community and competition remains.

Keywords

💡Premier League

The Premier League is the top level of the English football league system and one of the most prestigious football leagues in the world. It is central to the video's theme as it is where Manchester City, the subject of the legal action discussed, competes and has won multiple titles. The script mentions Manchester City's fourth Premier League title and the Premier League's investigation into financial irregularities at the club.

💡Manchester City

Manchester City is an English football club and the main focus of the video script. The club is noted for its recent success, including winning the Premier League title four times in a row. The script discusses the club's legal action against the Premier League and the implications this could have for financial regulations and competitive balance in football.

💡Legal Action

Legal action refers to the process of taking a case to court or using the law to solve a dispute. In the context of the video, Manchester City is taking legal action against the Premier League over regulations that limit 'Associated Party Transactions.' The script details this unprecedented move and its potential impact on the football industry.

💡Associated Party Transaction

An Associated Party Transaction is a financial deal between a club and a company owned by the same entity or person. The Premier League introduced regulations to limit these transactions to prevent owners from inflating commercial income. The script explains that Manchester City is challenging these rules, which are designed to ensure fair market value in deals like stadium naming rights and sponsorships.

💡Financial Irregularities

Financial irregularities imply discrepancies or potential rule violations in financial dealings. The script mentions that the Premier League is investigating 115 accusations of financial irregularities at Manchester City, which are alleged breaches of financial regulations and could be related to the club's sponsorship deals and revenue reporting.

💡Competitive Balance

Competitive balance refers to the fairness and equality of competition within a sports league. The video discusses how financial regulations aim to maintain this balance by preventing wealthier clubs from gaining undue advantages. The script suggests that Manchester City's legal challenge could disrupt this balance and lead to a less competitive league.

💡Sky News Daily

Sky News Daily is the program from which the script is taken, providing news and analysis on current events. In the script, it serves as the platform for discussing Manchester City's legal action and its broader implications for football finance and business.

💡Paul Kelo

Paul Kelo is the business correspondent from Sky News who is featured in the script, providing expert analysis on the intersection of business and sport, specifically the legal and financial aspects of Manchester City's situation. His insights are crucial to understanding the complexities of the issue at hand.

💡City Football Group

The City Football Group is a holding company that owns Manchester City and several other football clubs around the world. The script mentions that Manchester City has 12 different clubs on six continents under this group, which is relevant to the discussion of Associated Party Transactions and the club's global financial network.

💡Etihad

Etihad refers to the Etihad Stadium, the home ground of Manchester City, and also to the Etihad Airways, the shirt sponsor of the club. The script uses Etihad as an example of Abu Dhabi-based entities that are among Manchester City's top sponsors, illustrating the potential for conflict in associated party transactions.

💡Financial Fair Play

Financial Fair Play (FFP) is a set of regulations introduced by UEFA to ensure clubs do not spend more than they earn. While not explicitly mentioned in the script, the concept is central to the discussion of the Premier League's rules on Associated Party Transactions, which are designed to enforce a level of financial discipline among clubs.

Highlights

Manchester City has launched legal action against the Premier League over financial regulations.

The Premier League is investigating 115 accusations of financial irregularities at Manchester City.

Man City is challenging regulations introduced to limit Associated Party transactions to prevent owners from inflating commercial income.

The aim of the rules is to prevent clubs from gaining an unfair advantage through inflated sponsorship deals.

Four of Manchester City's top 10 sponsors are Abu Dhabi based, raising questions about fair market rates for their deals.

Man City claims the financial regulations discriminate against new entrants and established powers in football.

The legal action could potentially affect the competitive balance of the Premier League.

Other clubs like Newcastle United, owned by state-backed entities, may be watching the case closely.

The influx of state-backed ownership in the Premier League could change the power dynamics of English football.

Man City's complaint centers on the claim that the Associated Party transaction rules are uncompetitive.

The legal battle may distract from the 115 financial irregularities Man City will have to defend in November.

The Premier League's legal department's budget has quadrupled to deal with the Man City case.

Sky's involvement with the Premier League since 1992 has significantly transformed English football.

The professional bodies' stance on maintaining grassroots football contrasts with the commercial success of top clubs.

The spirit of English football remains despite the increasing financial disparities among clubs.

The romanticization of football as a game is overshadowed by its status as a business.

Man City's legal action, if successful, could make it harder for smaller clubs to compete with the top teams.

Transcripts

football and money money and football

the two is inextricably linked as pies

and Bal well they are if you're at the

top of the game which Manchester City

certainly is fresh from winning their

fourth premier league title in a row the

club has launched legal action against

wait for it the Premier League if I were

to tell you that it's all about money

well that would be much less surprising

than Scotland winning the euros and it

might not be a complete coincidence that

the Premier League are currently looking

into

115 accusations of financial

irregularities at Manchester City I'm

Neil Patterson and on this edition of

The Sky News Daily we'll ask what on

Earth one of the richest clubs in the

world is up to and whether the beautiful

game is in need of a

facelift Paul Kelo is our business Cor

onent and he joins us once again on the

podcast good to see you Paul I I suppose

this is one of those stories that's

straight up your alley given the fact

you also used to be our our Sports

correspondent and and in a sense this is

a story about the worlds of business of

sport combining in a big Unholy mess

just explain at the core of all of this

what are Man City doing in terms of

legal action with the Premier League

yeah you're quite right it's a collision

of the modern world of sport uh and

business which are frankly they're

indistinguishable certainly when you get

to the very elite level where manester

City operate Beyond question what they

are doing is something that is

unprecedented in the history of the

Premier League they are directly

challenging suing the Premier League

which means suing their 19 Rivals and

colleagues who sit around the Premier

League board table over some regulations

which introduced three years ago uh to

limit something called Associated party

transaction

that is in layman's terms regulating any

marketing or commercial deals with

companies that are owned by the same

person or entity as the club it also

regulates transfers between clubs in the

same ownership group City have' got 12

different clubs on six continents in the

city football group and those deals

those related party transactions have to

be uh established to be at a fair market

value now the aim of these rules is

bluntly to prevent owners juicing up

their commercial income by funneling

money from companies they also own

directly into the football club this is

all awfully complicated so let me just

try and put an example out there and see

if I'm understanding this fair market

value let's take one of the sponsorship

deals that all the big clubs have the

naming of their stadium and let's say in

a certain part of the country that would

be worth say2 million a year what these

rules are are designed to do is to stop

the owner's company or or or Associated

company saying do you know what rather

than paying the fair market rate of 20

million Here's 2 billion for that

sponsorship deal am I in the ballpark or

the football ground I should say exactly

that and it is it is essentially owners

almost by definition are very rich and

with big assets to deploy being able to

uh bypass the normal commercial market

and what it it means is if you are

another club not owned by an enormous

entity uh when you go to the market

you're dealing with a normal range of

potential backers airlin soft drinks

companies betting companies whatever it

might be there's a market rate for

whatever the deal is be a stadium rights

or or shirt uh sponsorship deal these

rules are there to prevent those being

blown out inflated and giving the club

an advantage and there are some pretty

specific examp examples of associated

party transactions at Manchester City um

four of their 10 biggest sponsors are

Abu Dhabi based entities remember the

club is owned by shake mansur a senior

member of the ruling Abu Dhabi royal

family the stadium is the ettihad

stadium the shirt sponsor is ettihad and

they would have had to demonstrate that

those deals have been done at a fair

market rate they're not the only ones

Saudi Arabian State backed um in

investment fund bought Newcastle United

there's a there's a company they own on

the front of their shirts indeed

Chelsea's new owners have a have a deal

uh with a company in which they also

have Stak so there are plenty of

examples of these look when it when it

comes to the money and again sorry to

label this point because this is quite a

confusing topic companies which are not

related to the owner of a club would not

want to pay more for the sponsorship

deal the shirt sponsorship the stadium

sponsorship or anything else because you

know they're beholden to their

shareholders do I mean isn't that the

argument that that Man City and others

are are saying that that the Premier

League is discriminating against Gulf

ownership that they are the the victim

of the tyranny of the majority and all

of this they've claimed actually all

along we should be fair to City they

have always maintained since the um Shay

mansur since their ownership group came

in little over a decade ago that the

rules around finances did discriminate

against new entrance wanting to at speed

compete with established powers in

football by the same time they came

along Roman Abramovic had already been

loaning money to Chelsea for a good

period of time Manchester United Decades

of success to build their commercial

might and they've always felt these

rules were discriminatory now having

established themselves at the top of the

game they appear to be wanting to kick

away the ladder alog together to

everyone else and being able to flex

their financial might in a way that was

fundamental to the Premier League and

speaking that in in the corporate terms

the The overarching Entity beyond the

individual clubs fundamentally could

fundamentally affect the competitive

balance which is after all what the

enormous commercial success of this

league is based on teams are more likely

to get beaten in the Premier League than

they are in any other league in the

world and that is one of the reasons

that it's the most watched and often the

most watchable football league in World

football I mean do Man City have have

any supporters uh amongst their

colleagues around the the Premier League

exact table I mean I'm thinking of other

clubs in the Premier League in a similar

position with owners with pockets deeper

than the center of the earth one would

imagine Newcastle United's owners

they're owned by the public investment

fund ultimately of Saudi Arabia you

would imagine they will be uh watching

perhaps with their fingers crossed to

see how this this goes um it's a really

interesting Insight actually into the

way Premier League ownership has changed

and what is the point of owning a

football club Abu Dhabi and Saudi

Arabia's public investment fund one

imagines their reasons they're not in it

to make money they're in it for the

profile that it brings these clubs have

such a global profile now that they are

hugely valuable in terms of the leverage

they can bring the soft power of the

Premier League that they can bring to

state-owned entities you can trace it

around the Premier League table the

influx of two for now State backed

entities into the Premier League could

we can see from this City action

absolutely change the very delicate

balance of uh Power and competitive um

Vitality of the game in England

competitive that's that that's a word I

just want to dwell on for a second

because at the heart of man City's

complaint is that these rules the

associated party transaction rules are

are uncompetitive and they say this with

straight face having won the Premier

League for the fourth time in a row it

doesn't strike me that that that if

there was going to be a change in the

rules that it should be made in their

favor it should be probably be made in

the opposite direction yeah and until

now not just in the 32 years of the

Premier League but the 140 nearly years

of professional League football in

England no Club has won the top division

four times in a row this is the first

time it's happened that's not quite

evidence I would say of a of a hemony

yet like it's not like Rangers and

Celtic is it it's not Rangers and Celtic

yet or Barcelona and Real Madrid or or

Bayern Munich you know they won by two

points Arsenal this year Liverpool

pushed them close last year they might

point out man united won seven of the

first 10 Premier Leagues but it has

never been unchallenged dominance but

it's starting to feel like it and if you

take the financial shackles off

and allow City to earn what they want

and spend what they want and remember um

football used to be a romantic game but

ultimately the more wages you pay the

better you will be it is a an un it's a

is a metric of success in football that

does not lie the size of your wage bill

it is a very meritocratic business and

game if you take what handbrakes there

are off the fear is with a brilliant man

with a network around the world of clubs

English football starts to look boring

and that is the deadliest thing you can

do to the television product but we

certainly shouldn't forget the fact that

whilst this arbitration process begins

next Monday and it run for two weeks

we're told that there there is another

legal process ongoing involving Man City

H due for November where they face what

is it 1 2 3 4 oh yeah

115 separate accusations of financial

irregularities now I I've seen it

suggested and I want your view on this

that there are perhaps some underhand

tactics going on that the Premier League

unlike man city does not have bottomless

Pockets that the legal bills that are

racking up on both sides are going to be

astronomic and in fact in doing what

they are doing right now man city are

are somewhat distracting from the 115

Financial irregularities that they will

have to defend at come November I mean

what do you make of that you're

absolutely right um there are many who

think that City's success um every

trophy should be uh accompanied by by an

asterisk in the record books because of

these charges that hang over them 115

charges most of them regarding alleged

breaches of financial

regulations um many of them relating to

the alleged and they remain allegations

um uh disguising of revenues uh and

sponsorship deals effectively doing what

the rules we've been talking about a

design to prevent juicing up your income

um without properly declaring it we

can't speak to precisely to their Moes

but you can see how this action

irrespective of what it is in its own

right how it might assist City if you

can establish that some Premier League

regulations are unlawful under English

law then you may be able to undermine

the regulations under which you are

being prosecuted um you might also be

taking up yet more time of the Premier

League legal department remember the

Premier League legal department

ultimately works for Manchester City as

well as the 19 others and is funded good

point from the revenue that they

generate times reporting today that that

legal department has uh budget has

quadrupled to 20 million pound um

dealing with the city case um and it's

also highly highly aggressive however we

um however we wish to style it it is a

front foot bit of

um legal e to take on your 19 other co-

shareholders in this way and it

demonstrates that City are very serious

about defending those other regulations

and frankly want to shake the game to

their they may well be within their

rights to do that Paul take a breather

there when we come back we will be

discussing well the the the broader

concerns about money in the beautiful

St we are

welcome back to the Daily uh Paul Kelo

our business correspondent still with us

and look we I I suppose we we have to

make mention Paul of the fact that the

game from when I was born you know X

years ago to to where the game is now

has has changed beyond all recognition

frankly money is at the heart of it sky

has played a role in that hasn't it it

absolutely has the Premier League re was

founded in 1992 a breakaway of clubs

with some pretty high-profile people

involved Alan sugar then PL Allen was

one of them they put together this break

away from the football league to found

their own competition um cut the league

down to 20 clubs and crucially Market it

better and sell a big chunk of uh live

rights to hundreds of games uh to Sky

exclusively which was at the time

launching it satellite television

Service uh in the UK and proved a huge

success and the success of the two for

quite a long time were intertwined but

the game in England is transformed you

think of the uh the state just emerging

from a band from European football the

blight of hooliganism stadiums that were

happen to be upgraded following Hills

brother if you supported a an English

football club you didn't necessarily

talk about it much in public um it was a

world away from the mass entertainment

safe

expensive globally watch competition it

is now Sky played a role in it 100%

sometimes when you look at what the

professional bodies say the big clubs

say about maintaining the Grassroots of

the game it it sticks in my throat we

have this contrast between a game that

is still felt very deeply in communities

these are Community institutions most of

these clubs and This Global business and

there is there are issues that are

incredibly hard to defend the loss of

replays in the FA Cup that is simply a

function of an expanding calendar and

the big clubs want to play more and will

for next year be playing more Champions

League games than ever before they want

to play more of the lucrative

competitions and the organizers of those

competitions want them to play them then

they want to be going

to Burton albian on a Tuesday night

despite the fact the visit of U of

Manchester United to Burton might secure

that club's future for for a year or

more much of the game is still hand to

mouth I would argue it is it is still

richer and the value of these clubs is

is perhaps more widely appreciated than

it was when I first started going to

watch football but it is

nevertheless the the inequalities are

vast and unbridgeable I I suppose for

for for many people particularly those

who support clubs closer to the

Grassroots level it's the fairy tale

quality to the game that keeps people

going week after week month after month

year after year to stand in the rain and

and watch their their local team but the

other club that that is springing to

mind right now is of course rexam who

through their celebrity associations

have had a big influx of cash have have

gone up twice I think even there even

rexam fans cannot deny that the reason

or a big part of the reason they are

where they are right now it's because of

the money isn't it absolutely the guy

was scoring the goals when they were in

the National League was from the league

above and they were paying second

division wages in the National League

and they were able to do it because they

had the celebrity interest and the

celebrity money it's a great story it's

a decent documentary too one of the

things I've actually found most

reassuring that the spirit of English

football isn't broken um even if perhaps

the model You could argue is in need of

repair is that the reaction now to rexam

among football fans and I would argue

perhaps the correct football fan

reaction once we've got over the

Delights of uh the documentary is for

them to be loathed by other teams in the

and I mean that in the nicest possible

way in the fashion that the richest

clubs always have been I mean you know

who Beyond Manchester United fans has

not enjoyed their decade of struggles

after 20 years of untrammeled success

that's the way it works comment to enjoy

English football it is required not just

to enjoy the success of your club but

you have to Revel in the failure of

others

and the financial disparities give those

who

enjoy foot that the game the opportunity

to rub in it but it's not it's a there's

a serious point in there it is truly

meritocratic and ultimately the best

players get the most money end up

playing for the teams that can afford to

pay them and the teams with the most

good players tend to win a final

question Paul how many kopies can you do

I'm up to three about 30 all right okay

fair enough and on that bombshell Paul

Kelo thanks so much for joining us

really appreciate your time come on you

Spurs Hil

Hil forget the jumpers for goalposts

romanticization of the game of football

it is far more a business than a game

and always has been yet in recent years

the gap between the top and bottom has

become ever more pronounced and this

legal action by Man City with four

League titles on the Trot let's not

forget will if SU successful make it

even more difficult for the minnows of

the game to play keepy upy with the big

boys that's a lot for this edition of

the daily we'll see you soon