Premier League summons clubs for crunch meeting in a bid to change sponsorship rules – after Man City’s successful challenge last month saw them deemed as ‘unlawful’

The Premier League has called a crunch summit later this month in a bid to change the sponsorship rules deemed unlawful following a legal challenge from Manchester City.

As English football’s civil war rages on, top-flight sides have been summoned to Central London for a November 22 showdown at which a vote will be held on amendments to regulations around Associated Party Transactions (APTs).

A 14-page document outlining proposed changes and seen by Mail Sport has been sent to clubs ahead of what promises to be a potentially volatile meeting at the swanky Nobu Hotel in Portman Square.

League officials will be hoping that the amendments are passed – and signal an end to the deep divisions that have ravaged through the top flight. However, how clubs respond remains to be seen.

The current rules were deemed unlawful by a panel in early October after City took the competition to a tribunal. An independent, expert panel subsequently identified a number of areas which needed to be changed, with the lack of inclusion of shareholder loans found to be a key omission.

It comes after a successful legal challenge by Man City saw the APT rules deemed as ‘unlawful’

City were subsequently left outraged after chief executive Richard Masters then told clubs that the necessary amendments could be made ‘quickly and effectively’.

City’s legal counsel Simon Cliff responded by emailing the rest of the league to emphatically dismiss Masters’ notion, accuse him of ‘misleading clubs’ and urge against a ‘knee-jerk reaction’, adding hat this was a ‘time for careful reflection and consideration by all clubs, and not for a knee-jerk reaction’. Cliff again pointed out that there should be no rushed attempt at a solution at an emergency meeting called for later last month.

Of the 20 votes available, seven clubs would need to vote against the proposals to stop them from going through.

The inclusion of shareholder loans – monies lent to clubs from those with stakes in them – is one of three changes being proposed across the 14 pages. 

Instead, that exclusion has now been removed, although equity injection investments remain exempt. The other two focus on access to a databank of commercial deals used by the Premier League to reach a verdict on whether a proposed sponsorship is at fair market value (FMV) and the reversal of a number of changes brought in earlier this year. 

The definition of FMV has been changed from whether the amount ‘could’ be sold rather than ‘would’ be sold between willing parties. The words ‘in normal market conditions’ have been removed, along with three lengthy paragraphs outlining its definition by the Premier League. There is an argument that in exceptional circumstances companies linked to countries in the midst of huge drives for exposure, such as Saudi Arabia, would be willing to pay a premium.

One issue the competition may face is a reluctance from those who benefit from shareholder loans to vote for the changes. And clarity may need to be sought from the tribunal panel on whether the amendments satisfy their requirements.

In the document, the Premier League say the changes have been drafted following consultation with the clubs and the assistance of ‘Leading Counsel, Daniel Jowell KC’.

City took the competition to a tribunal where an independent, expert panel subsequently identified a number of areas which needed to be changed regarding the regulations

Original restrictions on FMVs were introduced after the Saudi-led takeover of Newcastle in 2021 (pictured Newcastle chairman Yassir Al-Rumayyan (L) and co-owner Jamie Reuben (R))

City took the legal route after amendments to the rules – which shifted the burden of proof to a club to show that a transaction was at FMV – were passed in February.

Original restrictions on FMVs were introduced shortly after the Saudi-led takeover of Newcastle in 2021.

Twelve clubs voted for the changes at the time, with two abstentions and six votes against. Should the amendments attract the votes needed, they will be effective immediately.

The Premier League declined to comment.