Liverpool expert David Lynch does not believe that the recent ruling on Manchester City's battle with the Premier League on Associated Party Transaction (APT) rules will have a significant impact on the Reds.
On Monday, both the Premier League and the reigning top-flight champions claimed major victories in the protracted legal battle over APT rules, which serve to ensure that commercial deals between clubs and companies linked to their owners are of fair market value.
City - who took legal action after sponsorship deals with Etihad and the First Abu Dhabi Bank were blocked - successfully argued that that club loans from owners and shareholders - which can often be interest-free - should be governed under the APT rules, which could make life trickier for clubs who have borrowed hundreds of millions from their owners.
However, Lynch - speaking to Sports Mole - cannot see the ruling having a huge impact on Liverpool, whom he claims are not "massively reliant" on borrowing money from Fenway Sports Group, barring one outstanding £110m loan for the Anfield Main Stand development in 2016.
"I don't think it's too significant for Liverpool, if I'm honest," Lynch said. "The only thing that would affect them from this ruling is the idea that basically loans from owners would have to be judged at fair market value, which I assume will mean going forward, if those rule changes are brought in - which this ruling doesn't instantly mean they will be, they would still have to get voted through by the Premier League - but it would mean that you'd have to pay interest on any owner loans.
"For example, Liverpool have got an outstanding owner loan at the moment, which was used to build the Main Stand. That is interest free at the moment, but the thing is for Liverpool, any new rules that are brought in won't be backdated against these - it's just a guard against.
Lynch: 'Liverpool are not reliant on loans like Arsenal'
"So if they were to take any further loans from the owners, they would have to be with interest on top of them, and FSG aren't really big on that anyway. Any infrastructure projects outside of the Main Stand - for example, the Anfield Road End or the new training ground that was built at Kirby, they were using a revolving credit facility from the bank anyway."
Liverpool's financial accounts for the 2023 year showed that they still owe £71.4m of the £110m interest-free loan financed to them by FSG eight years ago, but the owners did not intend to chase up the remainder of that payment for the last financial year.
In contrast, Arsenal have benefitted from a £259m "soft loan" by Kroenke Sports and Entertainment - according to i News - while Brighton & Hove Albion (£373m) and Everton (£451m) have also enjoyed interest-free loans from their parent groups.
The exclusion of shareholder loans in APT rules was deemed "unlawful" by the independent arbitration panel overseeing Man City's case against the Premier League, and if a proposed rule change passes a club vote, the likes of Arsenal, Brighton and Everton will have to balance their books more carefully.
"Liverpool aren't massively reliant on owner loans in the way, say, Arsenal have been recently, so there's not really much to take from a Liverpool perspective," Lynch added, before delving deeper into the "irresponsible" reporting on the case.
As the news broke, several outlets labelled the ruling a landmark victory for Man City in their case against the Premier League, but as the 175-page document was further scrutinised, it became apparent that the Premier League had scored several points too.
© Imago
Lynch: 'Man City ruling does not help 115 charges case'
While the panel found in City's favour regarding shareholder loans and delays to the decision-making process, the judges ruled that APT rules as a whole work well and are an essential mechanism to Profit and Sustainability, while also rejecting City's claim that the Premier League's regulatory team had been biased against them.
"I think some of the reporting is kind of irresponsible around that in terms of the speed at which it was declared a City victory in certain quarters. When we take a look at the judgment and the detail of it - it's not accurate at all, really," Lynch added.
"They got a couple of points, one of which was that about the owner loans, which will affect some clubs, maybe, but not massively. It doesn't really massively hurt the Premier League, and [Man City] didn't really win on an awful lot else.
"In fact, the ruling underlined that you have to have these associated party transaction rules, they are an important and fundamental part of PSR in general, so you have to really stick to that.
"I wouldn't even call it a draw, really. I thought that was the main point that City would have liked to argue is that they were completely unfair, the rules as a whole, and they didn't win on that, so I don't think it helps them in the 115 case.
"I don't really think it can be described as a victory for City as a whole, really. But from a purely Liverpool perspective, not really anything I think massively affects them."
Meanwhile, Man City expert Steven McInerney from Esteemed Kompany has stated that it would be "naive" to label the champions the "big bad evil" of the Premier League, who must now revisit their blocked deals with Etihad and FAB.
Liverpool sit one point above Pep Guardiola's side at the top of the Premier League table, having taken 18 points from their first 21 on offer during a terrific start to life under Arne Slot.
Ben Knapton
