Manchester City have launched legal action against the Premier League alleging "discrimination" in a move that could have far-reaching consequences for the English topflight, The Times reported on Tuesday.
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The Times said the recently crowned champions would try to end the league's associated party transaction (APT) rules, which they are understood to claim are unlawful, and seek damages.
The Premier League tightened rules regarding APTs, relating to clubs signing sponsorship deals with companies linked to their owners, in February.
The Times added the dispute between City and the Premier League would be settled after a two-week arbitration hearing starting next Monday.
Abu Dhabi-owned City sealed a fourth straight Premier League title last month, underlining their domination of the English game over the past decade.
Their rapid rise has been aided by sponsorship deals with a series of related parties in the Gulf. Abu Dhabi-based Etihad Airways is both City's stadium and shirt sponsor.
In a separate case City, managed by Pep Guardiola, are facing 115 Premier League charges for alleged breaches of regulations and financial rules between 2009 and 2023 – charges they strongly deny.
That hearing is reportedly set for November.
APT rules are designed to keep the Premier League competitive, requiring clubs to prove that commercial deals represent fair market value.
The Times report said City, in a 165-page legal document, argue they are victims of "discrimination" and refer to a "tyranny of the majority" aimed at stifling their success on the pitch.
All Premier League rule changes and major broadcast and commercial proposals require the approval of at least two-thirds of those who vote, or 14 of the 20 clubs.
If City are successful in their legal fight, it could enable the richest clubs to value their sponsorship deals without independent assessment, further widening the financial gulf within the English top flight.
The Times said between 10 and 12 clubs had come forward, providing either witness statements or letters detailing evidence, in support of the Premier League's defence against City's claim.
The Times said City are suing the Premier League for damages, referring to losses incurred as a result of the existing rules.
City say the rules were imposed at the instigation of rival clubs reacting to the Saudi takeover of Newcastle, which took place in 2021, with the aim to "safeguard their own commercial advantages", according to the report.
City have accused rival teams of "discrimination against Gulf ownership", citing the comments of one senior club executive, The Times said.