Man City vs PL Q&A: What are APTs? What does today's final verdict mean?

A final verdict has been reached after Man City launched legal action against the Premier League last year for their unlawful sponsorship regulations.

The league's Associated Party Transactions (APTs) - which operated for almost three years - were introduced in 2021 after the Saudi Sovereign Wealth Fund bought Newcastle.

They introduced the rules to combat inflated sponsorship deals and ensure that any deal a club does with a company connected to its own owners is at a fair market value.

City first protested the rules in 2023 and once again in November last year. Today's verdict found that the rules between December 2021 and November 2024 in their entirety were unlawful, agreeing with City's stance and essentially undermining the Premier League's financial rules.

But what triggered the legal action? What happened today and what does it mean? Mail Sport answers all the key questions after the fiasco finally reached its conclusion.

WHAT ARE APTs?

In December 2021, following the Saudi-led takeover of Newcastle United, the Premier League proposed rules on what it referred to as Associated Party Transactions (APTs).

While they did not expressly say it at the time, the view was that the new rules were aimed at preventing clubs like Newcastle and City from signing inflated sponsorship deals with groups linked to their owners in an attempt to swerve financial rules and pump money into the club which could then be spent on players and wages.

At the time City said the rules, which were subsequently implemented, were unfair and unlawful.

HOW DID IT WORK?

Any deals with related parties were subject to what was called a Fair Market Value (FMV) assessment. Should they subsequently be deemed to be inflated, they were blocked. It is understood that this happened on a number of occasions.

WHAT TRIGGERED THE LEGAL ACTION?

In 2023, City saw a wide-ranging sponsorship deal with Abu Dhabi-based Etihad Airways, and another proposed deal with First Abu Dhabi Bank, blocked under the APT system.

They had seen enough and launched a legal challenge. They claimed that the rules, which were further amended in February 2024, were anti-competitive and therefore unlawful.

WHAT HAPPENED NEXT?

The matter went to an independent tribunal, and a panel made up of three legal big-hitters.

They found three elements of the rules – including the fact that shareholder loans (loans to clubs from stakeholders often subject to little or no interest) were not subject to the same FMV assessment meant they were unlawful.

Two other elements were also highlighted. City claimed this vindicated their position, while Premier League chief executive Richard Masters took a different stance, claiming the tribunal had endorsed the rules as a whole but had ‘identified certain discrete elements…that needed to be amended’.

City then accused Masters of trying to ‘mislead’, stating that their position was that the ruling meant that ALL the rules were null and void and adding that nothing should be done until the panel delivered its final verdict.

Aston Villa sent a letter to clubs warning against pushing through amendments.

‘NEW’ RULES

The Premier League pressed on regardless, and in November proposed tweaked APT rules which were voted in by 16 clubs to four. City swiftly claimed the new rules were unlawful and issued a further legal challenge.

WHAT HAPPENED TODAY AND WHAT DOES IT MEAN?

The panel returned its final verdict on the first challenge and found that the rules in their entirety were unlawful - effectively agreeing with City.

There are various potential ramifications. The verdict effectively means that for three years the Premier League operated an APT system that was null and void.

As a result, any club that saw a deal blocked or reduced in value during that period could sue. City will also seek payment of their costs.

Combined with the Premier League costs, that figure could total around £20m.

The same panel will now rule on the latest APT rules, voted through in November. Should they return a similar verdict, it could open the door for clubs like City and Newcastle to pen significantly higher deals with related parties.

It would also pile pressure on the Premier League itself.