Premier League announces results of Friday’s key vote on amendments to associated party deals

Twenty Premier League clubs met in London on Friday.

The main item on the agenda was voting on amendments to interested party transactions (APT).

Manchester City have called on clubs to vote against them.

Aston Villa supported us and Manchester City hoped other clubs would do the same.

Now the official release (see below) of the Premier League has revealed the results of this vote…

Premier League Official Announcement – Following Vote on Amendments to Associated Party Transactions (APT) – Friday 22 November 2024:

“At today’s Premier League Shareholders’ Meeting, clubs approved changes to the League’s Associated Party Transactions (APT) rules.

The amendments to the rules take into account the findings of the Arbitral Tribunal following Manchester City’s legal action against the APT system earlier this year.

The Premier League has consulted extensively with clubs, drawing on multiple expert opinions and independent lead counsel, to develop rule changes to address the amendments required to the system.

This is due to the integration of the assessment of shareholder loans, the reversal of some amendments made to the APT rules earlier this year, and changes to the process by which relevant information from the League’s “data bank” is transmitted to club advisers.

The purpose of the APT rules is to ensure that clubs cannot benefit from business transactions or cost savings that do not correspond to fair market value (FMV) due to related party relationships. These rules were introduced to provide a robust mechanism to protect the financial stability, integrity and competitive balance of the League.

Loans to shareholders
– The new rules aim to ensure appropriate parity between the treatment of shareholder loans and other APTs in the future, with transition rules clarifying the treatment of existing shareholder loans under this framework.
– Loans to shareholders entered into after (effective date) must be reported as APT and subject to FMV assessment. If the Premier League Council determines that a loan clearly does not comply with FMV, the relevant club will be required to terminate or amend the loan to reflect FMV and pay any shortfall in interest.
– Any shareholder loan that was previously entered into (effective date) and that is replaced by other forms of financing (e.g., through conversion to equity or redemption) within 50 days (i.e., before January 11, 2024) will not required for provision. as APT or rated at FMV.
– Any shareholder loan that was entered into after December 14, 2021 but before (effective date) and remains in effect through January 11, 2025 must be reported as an APT. If the Premier League Council determines that the loan is clearly not in FMV, the club is permitted to retain the shareholder loan on existing terms, although its annual accounts for 2024/25 onwards must be adjusted as if from (effective date) , the loan was in FMV.
– Any shareholder loan that was entered into before December 14, 2021 and remains in effect until (January 11, 2025) must be reported as APT and subject to FMV assessment for any use of funds occurring after (effective date). If the Premier League Council determines that the loan clearly does not comply with FMV, the club is permitted to maintain the loan to shareholders on existing terms, although adjustments must be made to its annual accounts for 2024/25 onwards as if any drawdowns had been made after (valid date) were on FMV.”