Good morning, The Football Newsletter readers. As we look toward November 22nd, a critical vote looms in the Premier League. This is a date that could see changes to sponsorship and financial regulations impacting all 20 top-flight clubs. At the heart of the matter is Manchester City’s recent legal victory, which challenged the Premier League’s “associated party transactions” (APT) rules—a victory that now has league officials rethinking sponsorship regulations.

Manchester City, one of the Premier League’s most financially powerful clubs, took the league to tribunal over APT rules introduced in 2021. These rules were designed to curb clubs from generating inflated revenue through sponsorship and commercial deals connected to their owners or “associated parties.” However, City argued that the regulations were “discriminatory and distortive,” and an independent tribunal ultimately sided with them on key points.

The tribunal’s 175-page judgment, published last month, concluded that certain aspects of the APT rules conflicted with competition law, particularly regarding shareholder loans. While the Premier League is pushing to resolve these issues with minor rule amendments, these adjustments need the support of at least 14 clubs in a shareholder vote on November 22.

To understand the stakes, let’s break down what APT rules entail. Originally, APT rules were introduced to prevent clubs from artificially boosting their revenue through deals with associated entities—companies linked to club owners or board members. Each major sponsorship agreement needed to reflect a “fair market value” (FMV) to prevent clubs from using inflated commercial deals to fund player purchases and cover other expenses.

Shareholder loans—money borrowed from a club’s owners, often with minimal or no interest charged—were initially excluded from APT regulations. This exclusion became a point of contention. The tribunal agreed with City’s argument that this created an unfair advantage for certain clubs, distorting competition. By allowing soft loans from owners without regulation, some clubs could, in effect, benefit financially without facing the same scrutiny as others.

The Premier League’s proposed changes would bring shareholder loans under the APT umbrella, meaning any such funding would need to be reported and evaluated to ensure it meets FMV standards. This change could have wide-reaching implications: 14 out of the 20 clubs in the Premier League received soft loans from owners in their latest accounting periods. If these loans are subject to new scrutiny, clubs may face tighter financial oversight, impacting their spending power.

Despite the scope of the potential changes, the Premier League is hoping for a smooth transition. In response to the tribunal’s findings, a spokesperson noted that “discrete elements” of the regulations could be “quickly and effectively remedied,” provided clubs agree to the proposed tweaks.

Manchester City’s legal challenge brought attention to the complex relationship between club financing and league regulations. For City, this tribunal result has been framed as a win, reinforcing their stance on owner-financed deals. For the Premier League, however, the ruling is a call to action to ensure financial fairness across all clubs in the division.

The tribunal’s judgment is a reminder of the growing importance of financial scrutiny in football, especially as more clubs seek external funding to remain competitive. By challenging the APT rules, City has opened the door for clubs to question other financial regulations, which could shape the future of league governance.

On November 22, club representatives will meet for a shareholder vote, where at least 14 of the 20 clubs must support the proposed rule changes for them to be implemented. The outcome will determine how the Premier League balances financial oversight with the interests of club owners who wish to invest heavily.

Should the Premier League secure the required votes, shareholder loans would be brought under APT rules, subjecting them to fair market value assessments. This change, while potentially limiting for some clubs, is expected to create a more level financial playing field. However, if the proposal falls short of the two-thirds majority, the Premier League may need to explore alternative solutions.

As we wait for the outcome, the November 22 vote highlights the ongoing tension between financial freedom and regulatory oversight in modern football. For Premier League clubs, the result could influence how they navigate sponsorship deals and funding structures in seasons to come.

Stay tuned to The Football Newsletter for the latest updates on this pivotal vote and what it means for the future of club finance in the Premier League.