Official document reveals Wolves' role in Man City's legal battle with the Premier League
10/08/2024 03:20 PM
Man City have claimed victory in a landmark case against the Premier League rules governing commercial deals – and official documentation shows Wolves’ stance on the matter.
In a case which will not have any bearing on but is related to the ongoing hearing over their 115 alleged financial offences, Man City have challenged the Premier League‘s APT rules in the courts.
Associated party transaction (APT) rules were introduced in the aftermath of the Saudi Public Investment Fund‘s takeover of Newcastle United to stop clubs from striking artificially inflated sponsorships.
The APT rules dictate that clubs must prove that deals struck with owner-linked companies, such as Wolves’ kit deal with Fosun-owned Sudu, have been agreed at fair market value.
The 175-page decision in the case was released yesterday, with both sides issuing statements suggesting that they were happy with the outcome of the case.
City have since emailed Wolves and every other top flight to dispute the Premier League’s interpretation of the outcome, insisting that they have won a total victory.
In reality, the truth is somewhere in the middle. But it seems that at least some of the Premier League’s APT rules will have to be rewritten in any case.
In the paperwork that accompanied City and the Premier League’s respective announcements, Wolves role in the case has been revealed.
Wolves give evidence at Man City’s APT hearing
At the APT hearing, which was ruled on by a panel of three distinguished retired judges, several teams gave evidence either in support of or against City.
Newcastle United and Everton presented in their favour, while Tottenham, Arsenal, Man United, Liverpool and West Ham did the opposite.
In contrast to what has erroneously been claimed on social media and parroted by some media outlets, Wolves were not one of the clubs to give evidence.
What they did do is write a letter in broad support of the APT rules in advance of the hearing, as did several other clubs.
So while they endorsed the APT system, they stopped short of formally backing the Premier League in this specific case.
PSR and ATP: What next for Wolves as the Premier League reassess its spending rules?
With Fosun apparently committed to Wolves for the long-term and currently seeking minority investment, they will be keenly aware of how significant the APT ruling could be for them.
The Premier League is a private company with 20 shareholder, of which Wolves are one.
When new financial rules are proposed, Wolves will have a vote on what the new system should look like, with 14 votes required to implement a new measure.
The Premier League are set to introduce a new revenue-based PSR system from 2025-26, which will now be accompanied with a rethink of the rules on soft loans, i.e. interest-free loans from shareholder, as an ancillary outcome of the APT hearing.
Soft loans will now come within the scope of the APT rules, with PSR implications for those clubs who rely heavily on this type of finance.
Previously, it had been suspected that Wolves were flirting with with the upper limit of the PSR threshold.
But club chairman Jeff Shi has said that they do not have any PSR issues, nor have they ever come close.
