Did Arsenal have ‘unfair advantage’ over Man City in the Premier League? | Football

Football finance expert Rob Wilson has responded to Manchester City’s claim that Arsenal were given an unfair advantage in the Premier League.

City have accused the Premier League of giving Arsenal and three other clubs a leg up for allowing huge loans from their owners in recent seasons.

The English champions have been locked in a long legal battle with the Premier League and launched a fresh attack on their sponsorship rules.

City claim that Arsenal benefited from shareholder loans of approximately £259million in the 2022-23 season. They also argue Brighton benefited from shareholder loans of £406.5m in 2021-22, Everton £450m in 2022-23 and Leicester £265m in 2021-22.

The loans gave Arsenal and the other three clubs an unfair advantage in complying with Profitability and Sustainability Rules (PSR), City claimed, according to The Times.

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City believe shareholder loans, where owners lend their own teams money, haven’t been treated the same as other Associated Party Transactions (APTs), such as sponsorship deals with companies linked to club owners.

Charged with 130 breaches of financial rules which they’ve always denied, City launched their initial legal challenge last year after two Abu Dhabi-related sponsorship deals were blocked by the Premier League.

City feel current sponsorship rules ‘discriminate’ against certain clubs, adding that they ‘fail to meet the requirements of transparency, objectivity, precision and proportionality… and are liable to distort competition’.

City’s complaint about Arsenal’s £259m shareholder loan is particularly interesting given the Gunners have been their Premier League title rivals for the last two seasons.

Football finance expert, Professor Wilson, has shared his thoughts on City’s claim against Arsenal as he told Metro: ‘Essentially, [a shareholder loan is] when an owner or a group of owners lends money to their own club.

‘This loan isn’t counted as part of the club’s usual financial spending, and it doesn’t have to follow the same strict rules as regular spending. So, clubs can use these loans to boost their finances on paper without technically breaking PSR or FFP (Financial Fair Play) rules.

‘In the 2022-23 season Arsenal borrowed a huge sum, £259m, from their shareholders. This loan wasn’t seen as regular club income or expenditure, which allowed them to balance their books without hitting any regulatory limits.

‘The big question now is whether that’s fair and whether clubs are misusing these loans to avoid the spirit of PSR/FFP. In my opinion, they are, and it’s no different to the high sponsorships City have orchestrated from parties in the Middle East, likely tied to their ownership.

‘City, themselves have been under heavy scrutiny themselves for PSR/FFP violations. They’ve have raised these concerns because they feel that the system is being exploited by clubs like Arsenal and others.

‘They argue that these shareholder loans give clubs an unfair advantage, as they can use them to artificially inflate their financial position. It’s all very tit for tat.’

Quizzed if City were right or wrong, Wilson added: ‘Well, there are two sides to every story. On one hand, it’s clear that shareholder loans are allowed within the current rules, and clubs are using them within what’s technically permitted.

‘On the other hand, it does seem like clubs are finding ways to exploit the rules and may be bending the spirit of PSR/FFP, which was designed to keep football clubs financially healthy and competitive. This starts to push regulation into philosophy. My view is that they are as bad as each other.

‘Going forward, this sparks a broader debate about whether PSR/FFP needs to be reformed – it does. There might be more scrutiny on how loans are classified in the future, and it should lead to stricter regulations.

‘If the rules change, it might make it harder for clubs to use these loans as a way to bypass PSR/FFP limitations, making the financial landscape of football more transparent and fairer for all but, where there is money to be made, and trophies to be won, nothing surprises me about the lengths some go to in order to gain a competitive advantage in a winner takes all scenario.

‘City’s accusations are valid in the sense that they highlight potential loopholes, but whether those loans are truly “wrong” depends on your interpretation of PSR/FFP’s intent. The whole thing could lead to changes in how these loans are viewed and regulated in the future.’

Arsenal were approached for comment about this story.

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