Former Manchester City financial advisor Stefan Borson fears the club will lose their legal battle with the Premier League over Associated Party Transaction (APT) rules.
However, he has outlined that the verdict is not likely to impact Man City’s separate case involving the 115 allegations of Profit & Sustainability Rules (PSR) breaches, levelled at them by the Premier League in February 2023. City deny all allegations of PSR breaches.
Meanwhile, a two-week hearing regarding the club’s legal challenge on APTs started on Monday, with the Blues claiming they are unlawful. The legislation says that the Premier League has the right to oversee sponsorship deals involving entities connected with club owners.
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The League put these laws in place in 2021 on the back of Newcastle United’s takeover to ensure deals between connected parties are not inflated above fair market value, and thus covertly hand a club greater room to manoeuvre within PSR.
Should Man City win the case, the Premier League could lose their right to be a watchdog over such agreements and so deals would be allowed to go through without oversight. However, Borson says the club faces a tough battle to overturn APT rules.
He told talkSPORT: “I just think competition law arguments of this nature are esoteric, fine-margin calls and therefore the chances of them overturning a set of rules that have been put in place following a vote is going to be a challenge for City.”
However, Borson had earlier underlined that the outcome of the APT hearing will have little impact on the 115-charge case, which accuses Man City of illicit revenue sourcing and uncooperation for instances between 2009 and 2018.
He highlighted how APT rules only came into force in 2021 and therefore after the timeframe in which City are accused of breaching PSR rules, so the two would not overlap.
Borson said: “If you go back to what the rulebook looked like at the time in which City are accused of these breaches, there were no rules about Associated Party Transactions. But there’s always going to be rules about filing fair accounts.
“There’s no set of rules that would permit what City are accused of doing between 2009 and 2018. They’re accused of making up their accounts. And if that is proven, then they will suffer very severe action.”
The PSR case against Man City is expected to start in November and last around six weeks. Both the club and the Premier League hold the right to appeal the verdict.