Manchester City ramp up civil war with Premier League as champions tell 19 rival clubs that new rules are ‘UNLAWFUL’ in leaked 11-page letter

Manchester City have launched another stinging attack on the Premier League as English football’s civil war rumbles on.

The champions have again written to all 19 clubs – and the Football Association – in which they warn that the competition’s proposed changes to sponsorship rules remain ‘unlawful’ and raise the prospect of further legal action should they be given the green light when clubs meet next Friday.

In a league-wide email, City have included an astonishing 11-page letter – also seen by Mail Sport – that they received from the Premier League on Thursday, in which the competition strongly defends its position and accuses its own champions of making ‘repeated and baseless assertions’.

City initially took the Premier League to a tribunal following amendments to its rules on associated party transactions – sponsorship deals with parties linked to club owners – earlier this year.

In September, an independent panel ruled that sections of the rules were unlawful, in the most part because shareholder loans – monies lent to clubs by those with stakes of more than 5 per cent – were excluded from the league’s fair market value (FMV) test.

Top flight chief executive Richard Masters wrote to clubs in the aftermath of the verdict, assuring them that amendments could be made ‘quickly and effectively’. That claim was swiftly rubbished by City’s legal counsel Simon Cliff, who wrote to all clubs to accuse Masters of attempting to mislead them.

City included a letter from the Premier League which accuses the club of making ‘repeated and baseless assertions’

They also wrote to every club last month rubbishing the PL’s claims of victory in their civil war

Now, Cliff has again been moved to contact each club to urge them not to vote for the league’s proposed amendments at a Central London summit next week.

In the email, Cliff says that City are ‘strongly in favour of robust, effective and lawful regulation of related party transactions’. However, he adds that the fact that an independent panel found several of the rules to be unlawful means that the whole system is void and that the previous, less stringent related party transaction rules (RPTs) is now back in force until any new regime is agreed.

Cliff says that the Premier League disputes this, and so the Tribunal will make a verdict on the state of play in the near future. ‘In the meantime,’ he adds, ‘common sense dictates that the PL should not rush into passing amendments – particularly ones which entail material legal risk – until the PL knows the outcome from the Tribunal’.

And in what may be interpreted as a clear warning, Cliff declares that City’s ‘strong desire is to avoid any future costly legal disputes…and so it is critical that the PL gets it right this time round’.

The letter, which includes 20 pages of expert legal comment, goes on to highlight three issues. The first being that the proposed amendments are also ‘unlawful’ because they would introduce a retrospective exemption for shareholder loans from December 2021 until the new rules come into effect.

‘This exemption is one of the very things that was found to be illegal in the recent arbitration,’ Cliff writes. ‘It is not lawful to re-introduce it into the rules.’

The City exec states that the proposal does not strike the right balance as it allows certain clubs to benefit from shareholder loans, and also claims addressing that issue is unfair because the clubs who took them did not know that the exemption was unlawful.

His final point is that the Premier League is rushing its consultation and that it is ‘essential’ to have the tribunal’s verdict before any next steps.

Man City won their legal challenge against the Premier League’s sponsorship rules

Pep Guardiola’s side took legal action against sanctions that they deemed as a form of ‘discrimination’ in February

Multiple clubs including perennial rivals Arsenal, Manchester United, and Liverpool gave evidence in favour of the Premier League

Man City’s legal counsel has urged clubs not to vote for the league’s proposed amendments

‘One very possible outcome,’ he says, ‘is that the tribunal will declare that all of the APT Rules are void and always have been. How can the clubs meaningfully discuss amendments to rules without knowing if those very rules even exist?’

Cliff says that by rushing through its consultation process the league ‘risks further costly legal proceedings, including potential claims for interim relief and damages’.

The Premier League’s robust earlier response to City opens by accusing the club of making ‘repeated and baseless assertions…that the league acted in away way contrary to its obligations as a regulator or has “misled” clubs.

Signed simply by ‘The Premier League’, it adds that it is ‘implausible’ to suggest that the tribunal did not rule that the balance of the APT rules was lawful and rejects criticism of its subsequent consultation process, stating: ‘That MCFC does not agree with the process does not provide a credible basis to impugn it’.

The letter, which shines a light on a situation which finds the competition effectively at war with its own champions, accuses City of making ‘meritless threats’, rejects the notion that the proposed amendments are ‘unlawful’ and accuses them of ‘a tendentious and inaccurate interpretation’ of a call between clubs last month.

Both City and the Premier League declined to comment.