Newcastle United and Premier League clubs to discuss FFP changes amid Man City verdict

Premier League clubs are set to gather today (Tuesday) for pivotal talks on changing financial rules in the wake of a legal spat steered by Manchester City. This crucial gathering will discuss potential amendments to the division's associated party transaction (APT) regulations, following an arbitration panel's verdict that ruled it unlawful to exclude shareholder loans.

This meeting is seen as significant as it's the first since the decision went public on October 7.

Manchester City has described the league's response to the arbitration outcome as "misleading" and interprets the ruling as one that renders all APT rules invalid. In turn, the champions argue that the judgment has effectively nullified the entire framework of APT regulations.

While the Premier League has reached out for more clarity from the arbitration panel on the implications of their decision, they're pushing forward with amending the aspects of the policy deemed illegal. The APT guidelines are designed to ensure that commercial deals between clubs and related parties are based on genuine market values to avoid inflated revenues.

Ahead of the meeting, clubs were asked to provide the league with details about their current mix of shareholder loans versus loans converted into equity, dating back over the past three years. The general agreement among clubs is that only new shareholder loans could be evaluated for fair market value, rather than existing ones.

A fair market value assessment might take into account the interest rate that would be charged on such a loan in the open market, which could vary from club to club based on their credit score. Crucially, this interest cost would then need to be included in a club's calculation under the profitability and sustainability rules (PSR) and could potentially put more clubs at risk of breaching those rules.

The PA news agency has reported that there will not be a vote on any rule changes at today's meeting. The rules must also be changed to allow clubs to access databank information being used as a comparison by the Premier League board while it is making a fair market value assessment so that clubs can make representations based on that data before a decision is made.

The tribunal found it was procedurally unfair not to allow clubs to comment on the data before the league's board makes a decision. Some amendments to the rules voted through in February are also set to be rewound to the wording prior to that vote.

The proposals, which are set to be discussed by clubs today, have already been approved by two league working groups. This includes the financial controls advisory group (FCAG), which counts City Football Group's chief financial officer Ingo Bank among its members.

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