For many within the Premier League, the latest Manchester City case is stark: it is “another decisive battle in the war for football’s future”.
That is the only conclusion many executives can come to after weeks of poring over the various strands that inform this latest crisis. It is why there was an initial calm when The Times broke the story of City’s legal action against the Premier League on Tuesday, even if the public reaction whipped many into a resurgent fury. Everyone in the competition has known about this for months. It is really something that has been building up for years, another case that serves as a distillation of so many of the game’s many issues, alongside the pending 115 charges for alleged breaches of cost-control rules. City stress their innocence there. This entire story reasserts the most important of those issues, which is the true significance of state ownership like Sheikh Mansour's of City.
This case is hard enough on the surface. City are challenging the Associated Party Transaction [APT] rules, which mean any commercial deal with a related party has to go to an independent panel to determine if it is of “fair market value”. If successful in that challenge, it could feasibly mean any UAE-linked entity could do any deal they want with City, without independent assessment.
While the implications of City success here are obvious, this legal challenge really has a far greater significance than that. It is about tearing the fabric of the game, and the spirit of “competitive co-operation” on which it is necessarily built. Put bluntly, City signed up to the Premier League agreement where any decision requires a majority of 14 out of 20, and this is what their very owners bought into. Except, they are now deciding this shouldn’t apply to them and seeking that strategy beloved of the wealthiest: overwhelming the British legal system with more money than your opposition. And no one has more money than a state that controls up to 9 per cent of the global oil economy.
The simplest way to think of this is that could change the structure of the game in a more drastic way than a Super League.
This also reflects the fundamental issue with allowing states – and especially autocratic states – to own football clubs. There are so many warnings borne out in one story. A system dependent on rules is being challenged by interests that are used to just setting their own laws. How can sporting bodies be expected to regulate state actors, especially when they have geopolitical relationships with the home governments of leagues? The Richard Scudamore era in the Premier League really has so much to answer for, as so many different questions build up from years back.
Before you even get to the immensely difficult issue of attempting to regulate a state-linked ownership, there is the very difficult question of attempting to condition competitive balance in a global sport like football. The Premier League is already in ongoing debates about the best possible system, which were to be debated at Thursday’s AGM. Any competition must try and facilitate as many clubs as possible being able to win, while ensuring they are not placed in financial risk, all while various self-interested powers try to exert their influence. That is extremely difficult to navigate. The actual solution is proper redistribution of the game’s immense existing money and talent, but that requires hard negotiations where people actually think of the long-term welfare of the sport. The easy alternative always put forward is “investment”. The problem is that just leaves the game subject to the pot luck of who invests, and would actually just exacerbate the existing problems.
Those problems become unsolvable if states of essentially unlimited wealth just put in whatever they want. What would the Premier League become?
This is exactly where this latest City case has brought so many issues to a head, while also showing the next level of complication in attempting to regulate state ownership. It is exceptionally difficult to clarify the blurred lines between companies and the state in a legal structure where the royal family can just appropriate anything. The argument from one executive is that “ultimately, it all comes from the same pot of money”. Four of City’s main sponsors have links to the UAE. APT regulations are an attempt to address some of this.
City’s 165-page legal document attempts to use a familiar argument in saying they are victims of “discrimination against Gulf ownership”. The fallacy here is that the very nature of their ownership poses much more complicated questions. There’s an immense difference between a commercial deal to a company with shareholders and one with a state entity that has no such obligations.
That is also where their case may be weakened, since Newcastle United are the one other Premier League club under that type of ownership. The regulations were even voted on as a direct consequence of that PIF takeover, but they have not joined the litigation. Newcastle have sent a letter of support, but that is viewed as of minimal evidential value, and they are instead just watching and waiting.
As to why City are pursuing this, many in the Premier League view it as a “counter-attack” regarding the 115 charges. It should be stressed that the regulations being challenged are different to those in the longer-term investigation. There’s also the more pertinent fact that City’s entire empire has been built on sponsorship deals covered by these rules. There is a direct interest in challenging them. It all still comes within this wider context, where it feels like the Premier League - and maybe the wider game - has been building up to this existential moment.
That has raised wider questions within football, as to how this fits in with “sportswashing”. The truth is that the concept that phrase attempts to cover has never been about anything as simple as “PR” or even the local market. City’s owners want to build this global entity that represents Abu Dhabi around the world, that runs parallel to the state’s ambitions in the developing world.
They are looking way beyond the Premier League, as this very case illustrates. City chief executive Ferran Soriano said it himself in his book, where he spoke out about how his only interest was his own club. It’s difficult not to recall another line from the Catalan, in an email released in Football Leaks. That was how City are in danger of becoming the “global enemies of football”. That is the point we’re reaching. As regards sportswashing and the issues of state ownership, there is an obvious symbolism in a club owned by a senior royal from an autocracy complaining about a democratic system.
That system is now under threat. As regards what next, the Premier League feel their case is “legally sound” according to British law, but there is still obvious concern. City are bullish and looking to every element of the law as expected from a legal team that costs into tens of millions. A good lawyer can win any case.
It’s hard not to see all of this as dismal for the game, and reflective of a new era. The ramifications could similarly go beyond how the Premier League is played. It might come down to whether it is played. Many clubs are already wondering whether there would be much point in continuing if City win. Could they consider resigning from the Premier League and joining the English Football League, in a reverse-1992? Would City have more interest in a Super League, given their global aspirations?
None of this is to say it will happen but the very fact these subjects are being discussed shows how serious this case is.
Even if they don’t occur, this is all how you kill the very spirit of the sport. It shows the historic error of football subjecting itself to forces it could never control.
