The Premier League’s Associated Party Transaction rules must now change after a challenge from Manchester City, affecting Arsenal, Chelsea and Tottenham Hotspur
Arsenal and Chelsea will seemingly be among the clubs most affected by the Premier League assessing shareholder loans as part of its Associated Party Transaction (APT) rules.
The two clubs owe over a combined £400million to their owners ( Arsenal : £259m; Chelsea : £146m) as of the end of the 2022/23 season – via the Swiss Ramble. Only Brighton and Hove Albion (£373m) and Everton (£451m) are more indebted to their shareholders.
Brentford (£61m) and Crystal Palace (£38m) also owe significant sums to their owners. Fulham, meanwhile, have just £1m worth of such shareholder loans, while Tottenham Hotspur and West Ham United have none. Manchester City, Manchester United and Newcastle United also notably do not have any.
The APT rules have previously excluded these loans. The Premier League states that was “a choice by the majority of clubs who wished to encourage transparent investment, and 19 of them (including Manchester City) voted in favour of this approach.”
However, City challenged the legality of those rules after the league voted through amendments earlier this year, and a hearing took place in June. Chelsea, Everton and Newcastle all acted as witnesses for the reigning champions.
Arsenal, Bournemouth, Brentford, Fulham, Liverpool, Man United, Spurs and West Ham submitted evidence to support the Premier League. They are now “conducting a process that can allow the League and clubs to enact those specific changes quickly and effectively” because “as the Tribunal has concluded, the APT Rules must now integrate the assessment of Shareholder
The league also acknowledged that “these elements can quickly and effectively be remedied by the League and clubs,” adding that “in the meantime, the Premier League will continue to operate the existing APT system, taking into account the findings made by the Tribunal.”
Such alterations could see commercial loan rates applied to what currently are predominantly interest-free loans. Doing so would impact clubs’ profitability and sustainability calculations, which The Times claims could mean many clubs breach PSR rules.