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The Slippery Slope of Self-Dealing and Manchester City

Next week, an Independent Tribunal will convene to hear Manchester City’s case against the English Premier League. The Mancunian club is citing a “tyranny of the majority” and alleging anti-competitive violations, mainly in relation to the League’s recently amended Associated Party Transaction (APT) rule.


Although, it should be noted that this case, was conveniently filed before Manchester City’s November hearing for 115 alleged Financial Fair Play violations, and also comes after the club’s chairman, Khaldoon al Mubarak, allegedly said “he would rather spend 30 million on the 50 best lawyers in the world to sue them for the next 10 years” than agree to any financial penalty.


Putting those 115 alleged violations aside for the moment, this bombshell anti-competition case could also have massive legal implications for professional sports across Europe and the world. But, before we dive into the legal dispute and the ensuing drama, I am sure you are asking yourself, what is an associated party and what is an associated party transaction?


Self-Dealing and APT

Per the Premier League Handbook that was adopted in March 2024, an “Associated Party” is someone who either has influence over a club or could influence someone with control of a club. Generally, that includes your Board of Directors, their families and close relatives, and anyone with more than 5% ownership of a club.[1] Furthermore, the Handbook defines an “associated party transaction” as any transaction between “a Club and an Associated Party,” as well as “a manager or senior official of a club and an associated party of that club.”


In the U.S., we often refer to these types of transactions as “self-dealing.” Transactions labeled or referred to as self-dealing generally involve two parties to a transaction that are, on paper, two separate entities. In reality, however, both entities are made up of a single group of individuals with fiduciary duties to both entities. Self-dealing is permitted under U.S. law, provided that the transaction simulates “arms-length-bargaining,” or in other words, fair market value is assessed for the transaction.[2] 


Now, I am sure your instincts are telling you that allowing people to transact with themselves will surely lead to corrupt transactions, and that is likely true, which is precisely why safeguards/restrictions have been and continue to be put in place. (I.e., the fair market value requirement for self-dealing) Much like U.S. jurisprudence—and mainly as a direct response to the ever-growing “influence” of Private Equity and Sovereign Wealth Funds within professional sport—it has now become a trend within professional soccer to institute these safeguards intended to ensure long-term sustainability and transparency, such as the English Premier league enacting the aforementioned APT rule.

Financial Fair Play and APT

The most notorious safeguard in professional soccer was enacted back in 2011, when UEFA, the sporting body notably in charge of the Champions League, enacted the Financial Fair Play (FFP) regulations. These regulations prevent European professional soccer clubs from spending more money than they earn within a fiscal year because, surprise to no one, soccer clubs were spending more than they made in order to stay competitive. So, after seeing a multitude of historically competitive clubs (dare I say “football heritage”) hoist the paperwork for bankruptcy instead of trophies, UEFA decided enough was enough and enacted the FFP regulations.


However, in the same vein that a soccer player scores a goal even though there was a goalie, FFP alone would never entirely stop the modern-day business-savvy owners from finding legal loopholes to take advantage of, such as self-dealing. Whether it’s Chelsea F.C. engaging in (English Premier League approved) self-dealing by selling their training ground or Manchester City utilizing shell companies disguised as marketing campaigns/sponsorship deals to fund player costs, it has become clear that self-dealing has officially arrived in the ecosystem of professional soccer.

Manchester City and APT

Those “sketchy” transactions are likely part of what led the English Premier League to amend the APT rule this past February, in an effort to tighten up the scrutiny clubs will face if found to over-inflate any self-dealing or associated party transaction. Specifically, it is now the clubs who bear the burden of proving a “fair market value” for any associated party transaction. That amendment, at least in Manchester City’s viewpoint, is a drastic shift from the previous procedure of the English Premier League bearing the burden of showing an associated party transaction is overly inflated from the relative fair market value.


But will this amendment to the APT rule and other similarly drafted regulations actually accomplish the goal of deterring impermissible self-dealing? If you ask the English Premier League, they will likely say that by increasing scrutiny on APT and other similar FFP loopholes, the League is ensuring the long-term integrity and financial sustainability of the League. Although, if you ask Manchester City, they see the recent amendment to the APT rule and other similarly designed safeguards as “discrimination against Gulf ownership” and “success-stifling” by the English Premier League and Clubs.


The truth, however, is likely somewhere in the middle.


(P.S. Todd Boehly: if you ever read this, please hire me!)



Benjamin Kaner received his J.D. from New York Law School, with a specialization in Business and Finance. Benjamin was the Vice-President of the Sports Law Society at New York Law School and is passionate about Golf, International Football, and Formula 1. Benjamin is interested in working with sports leagues and teams in the future. You can find Benjamin on Twitter and Instagram @BenKaner.




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