The Man City v Premier League case is very different from normal business disputes. Here’s how.

 

 

By Tony Attwood

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Most legal cases involving businesses do not challenge the fundamentals of the organisation that is being sued.  Indeed it is commonplace that the starting point is that both the claimant and the defendant have the right to exist and run their business in their own way, but that the defendant failed to abide by the rules – normally expressed as a contract.

Thus if my company sells you or a company you are associated with, some products or services, it is agreed in the terms and conditions of the sale what the product or service is, what guarantees exist, maybe what the quality or expected lifespan is, when the payment is made, and so on.

Such terms and conditions are usually invented by the selling company, and it is up to the buying company to agree or not.  (This is different from sales between a company and an individual, where the law stipulates what can and can’t be in the contracts).  In business-to-business contracts (known as B2B) it is assumed that each business knows what it is doing, and therefore virtually anything can be put in a contract, providing it is not in itself illegal.

All of which makes Manchester City’s claim that the League has been unreasonable in assessing their commercial income as very odd.  The contract will undoubtedly say that what is to be done if there is a dispute, and that approach to resolution will be accepted by all sides.  If the contract between the clubs doesn’t contain this, then the clubs’ legal teams are not fit for purpose.  If it does Man C have no case.

But Man C are claiming that the Premier League is using Nielson Sports which has contracts with other clubs which Man C are suing.   And normally in such a case the court simply says to the plaintiff, “If this is a problem for you, that’s your fault, you shouldn’t have signed the deal.”

Of course I am not privy to what is going on in the legal arguments in this case, but it seems to me such an obvious point that either the club is challenging the very fundamentals of the relationship between clubs and the League, or they are trying to build the biggest case possible, in the hope that in the end the League will give in, in order to save legal costs.

The fact is, all the clubs approved Nielson in this role and that hugely weakens any case Man C has.  Indeed as the Guardian reports “the Nielsen team working for the league on  Associated Party Transactions rules is ringfenced from the rest of its business, an operation with eight offices around the world.”

It is true that Man City have voted against APT rules in the past, but they have agreed to accept the rules, and the League itself has agreed these rules.

In short Manchster C signed up to a set of rules that they now say are in contravention of competition law and therefore illegal.   So the question arises, why didn’t Man C say this at the time?   And besides, in business law, an organisation owned by its members can have any rules it likes providing they don’t break common law.

So I can’t see how Man C could win this case, but if they were to win the case they will demand compensation from the Premier League which if it were to be paid would have to be paid by the clubs, and would most likely force many of them into administration – which will of course end the Premier League.

What is now being reported is that three clubs have declared themselves supportive of the City case: Aston Villa, Chelsea and Newcastle United.

Arsenal, Tottenham and Liverpool are said to be leading the opposition to the claim.

Aston Villa is part owned by Egypt’s richest man, Nassef Sawiris.  Newcastle is effectively owned by Saudi Arabia, and Chelsea are well, Chelsea, the club known for signing more players than they could register.

But Man City’s biggest sponsors are Etihad Airways, Etisalat and Experience Abu Dhabi, all of which are closely linked to the club, which raises a few eyebrows.

Nevertheless they have also claimed that the voting rules (14 out of 20 must be in favour for any proposal to pass) represent “the tyranny of the majority”.  That is a phrase from John Stuart Mill, who argued that it is a result of democracy, not a reason for any organisation not to be democratic.

Again such a situation is so common it is hard to see how any English court could agree there is anything wrong with a 14 out of 20 rule. 

So what are City doing?   Obviously I’ve no inside information and I’m just trying to make logical guesses but one possibility is that they know they won’t win, but they are trying to run up legal bills so huge that the rest of the league will have to give in.

Of course the other approach is for the remaining 17 clubs to withdraw from the League and go and set up a new competition on their own, leaving Man City, Chelsea and Aston Villa to form a league of their own.