New Delhi: The Premier League has notified Aston Villa its plan to go ahead with a vote to change financial rules on Friday though the club had previously asked for it to be postponed. For more than a month the board has been consulting the clubs fot its rules on Associated Party Transactions (APT).
Earlier, a three-person independent panel had found the parts of the rules unlawful. Clubs are set to vote on the changes at league meeting on Friday, although Manchester City had resisted on going ahead with the amendments at such short timeframe. It was City’s legal challenge regarding the APT rules that had led to the arbitration panel summon.
Aston Villa are SUPPORTING #ManCity against the Premier League and have written to Richard Masters and the other clubs ‘STRONGLY RECOMMENDING’ that Friday’s vote on new APT rules is POSTPONED, @Tom_Morgs/@JPercyTelegraph are reporting! ‼️ pic.twitter.com/eyhg8ATJH5
— City Report (@cityreport_) November 19, 2024
Villa are joining the Citizens in the call for postponement, and have critcised the way the conflict over APT have been projected in the public. It has been reported that the league has written to the Villans and agreed about the sentiments regarding how the scenario has played out and the requirement of privacy in the matter. However, they have confirmed that the voting will go ahead as scheduled.
Villa called for the bitter “back-and-forth exchange” to be halted, which undermined the league’s leadership, club executives, and the whole organization of the Premier League. For the rules to be altered, 14 clubs have to be in agreement, or two-thirds of the clubs have to vote in case of refusal to vote.
What was the purpose of APT rules?
The APT rules were introduced in 2021 to prevent clubs from earning through enlarged sponsorship deals from companies related to the owners or having some influence over them. The rule was introduced amid concerns arising from Newcastle’s takeover with Saudi Arabia’s backing.
In essence, City, which is owned by Sheikh Mansour bin Zayed al Nahyan of Abu Dhabi, will be signing deals with Abu Dhabi and UAE-based companies at the same rates negotiated by other clubs for similar deals. This means that City’s shirt and stadium sponsorship deal, reportedly worth around £80m a year, has to be on the same level as Arsenal’s stadium and shirt deal with Emirates.
Premier League’s own handbook had stated that the rule was to avoid any advantage companies with the owners having any influence oliver them. In the long run it was seen as advantaging clubs by keeping them independent of financial reliance from “enhanced commercial deal”. In the long run this would increase financial sustainability for the clubs.
The major change being sought is lowering the rate of interest on shareholder loans subjected to the Fair Market Test. The rule amendment will not require FMV interest charges to be backdated to the time of the loan’s first issue. Still, it would also mean an ineffective interest rate would apply to any existing loan in the future after the grace period.
However, in the grace period the club owners and shareholders who have put in the loan will be allowed to convert the loan into equity. In any condition, it is understood that the rules will give the clubs a much-wanted breather from the stringent financial crackdown.
As clubs sit to vote on the changes in the APT rules, here’s how the Premier League’s financial side soon shape up. Football Sports News: Latest Cricket News, Cricket Live Score, Sports Breaking News from Sports Today
