Man City v The Premier League
Summary
TLDRManchester 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
🏆 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.
🤔 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.
📊 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.
🎥 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.
Mindmap
Keywords
💡Premier League
💡Manchester City
💡Legal Action
💡Associated Party Transaction
💡Financial Irregularities
💡Competitive Balance
💡Sky News Daily
💡Paul Kelo
💡City Football Group
💡Etihad
💡Financial Fair Play
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
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