Manchester City Allegedly Broke Financial Fair Play Rules Soccer

[Legion]

Too much to lose for most of the powers that be for this to be a significant judgement and if necessary punishment. Lawyers, reputation, political influence, sporting integrity, retrospective awards etc.

You see posts on social media calling for them to be stripped of titles and relegated but I fear it will be a damp squid

 

[Best]

The hearing into Manchester City's 115 alleged breaches of Premier League financial rules will begin on Monday.

 

[Bandit]

So if the hearing starts on Monday and it's 10-12 weeks as has been reported then it will finish at the end of November or the middle of December. Either way, deliberations won't start in earnest until January so I'd expect a result not too far away from the end of the season. Mid-April is my current prediction.

 

[Tom]

So if the hearing starts on Monday and it's 10-12 weeks as has been reported then it will finish at the end of November or the middle of December. Either way, deliberations won't start in earnest until January so I'd expect a result not too far away from the end of the season. Mid-April is my current prediction.

They said on Talksport Extra that the decision could, potentially, take up to a year.

Due to the complexity of the case, the independent commission would have to produce between a 200-400 page document outlining each charge, the decision they have made on the charge and the reason whether they think City are guilty or not.

I think we won't find out until the end of the season

 

[Dylan]

The Premier League's case against Manchester City has concluded and a three-person panel is considering their judgment.

Each of the 115 (or more accurately 129) charges is related to the competition's financial fair play rules and a decision is expected before the end of the season.

Fifty-four charges of failure to provide accurate financial information
These charges range over nine seasons, the longest such span of the alleged breaches. A complicating factor is that Premier League rules on this subject are often subtly revised, meaning the information City had to provide might have changed each season.

Generally, this addresses the demand for clubs to release financial information in order to demonstrate their adherence to FFP. Think of it like declaring all of your income so that a correct tax amount can be calculated — failure to do so is an offence.

The below graphic, like all others in this article, is based on the published judgment by the Court of Arbitration for Sport (CAS), with its context and the page it refers to noted above each excerpt.


Fifty-four charges are a lot, but they are all governed by the same principle.

Each individual charge in this section — for example, in 2014-15, City are accused of breaching six Premier League laws — relates to the specifics of what they were expected to provide information on. These include separate financial areas such as revenue, related parties, and operating costs. Effectively, City are alleged to have breached five or six clauses every year for nine years.

But rather than 54 separate cases, there is one key broader question at hand: were all of these figures accurate? To get specific: were Abu Dhabi-owned City reporting the true revenue they were gaining from sponsorship deals with Abu Dhabi-linked companies as they maintain, or only declaring part of it?

Discussion in the Der Spiegel emails as published in the CAS ruling shows City executives discussing cashflow between sponsors and the football club, as well as what they were expected to show for auditing purposes. Under Premier League rules, City were expected to provide "(in) the utmost good faith, accurate financial information that gives a true and fair view of the club's financial position".


Initially, Manchester City were found guilty by UEFA's adjudicatory chamber, which stated it was "comfortably satisfied" that City "did not truthfully declare their sponsorship income as payments purportedly made by sponsors were in reality payments from (owners) ADUG or (Sheikh Mansour)."



City subsequently appealed the case to CAS, arguing that UEFA, European football's governing body, was misreading the emails.


In the CAS case, though found guilty by the initial panel, the appeal committee found that they could not consider the legitimacy of the alleged payments from Etisalat because they were time-barred — a barrier which is not expected to affect the Premier League, according to legal experts.


Two of CAS' three-man panel dismissed the main charges that City had received disguised payments through Etihad and Etisalat, finding that all claims relating to payments from Etisalat were time-barred, as were some of those from Etihad, and that in any event, the charge of providing incorrect information had not been established.


The Premier League is unlikely to be blocked by time-barring rules in the same way UEFA was, while it is also understood that the legal process of disclosure has resulted in it gaining additional documents than those UEFA had.

Suppose the commission finds on "the balance of probabilities" that City failed to provide accurate financial information, based on misreporting the origin of sponsorship money. In that case, the club will be found guilty.

 

[Dylan]

Fourteen charges of failure to provide accurate details for player and manager payments

This is another alleged example of failing to share correct information for FFP purposes but differs slightly. Rather than being accused of injecting funds into the club by disguising it as sponsorship deals, here City are charged with hiding money being paid out to players and coaches.

Effectively, this has the advantage of being off-the-books, meaning portions of salaries would not count under the FFP cap. The Premier League alleges this occurred between 2009 and 2016.

The most high-profile examples discussed in the leaks from Der Spiegel relate to alleged payments made to manager Roberto Mancini and midfielder Yaya Toure during their days at the club.

In Mancini's case, City's then manager signed a deal with Abu Dhabi club Al Jazira — owned, like City, by Sheikh Mansour — which would pay him £1.75million annually for a minimum of four days' work per year. The Premier League will claim this constituted part of his City salary, with executives at the club (including the chief financial officer and head of finance) sharing emails related to the Al Jazira payments. Mancini and City have always denied any wrongdoing.

With Toure, the questions relate to image-rights payments allegedly made by Sheikh Mansour's Abu Dhabi United Group (ADUG) rather than City themselves, and subsequently were not declared as salary. As with Mancini, club and player deny any wrongdoing.

 

[Dylan]

Seven (or 21…) charges of breaching profit and sustainability rules
The exact subject matter here is slightly less certain; it is based on information gathered during the Premier League's investigation rather than the leaked emails. The charges can be split into alleged breaches over three seasons: 2015-16, 2016-17 and 2017-18.

Arguably, this is where it is more accurate to use 129 charges rather than 115 to describe the total number of offences allegedly committed by City. The Premier League has charged them with breaching seven PSR rules in each of those three seasons — during early explanations of the case, these were grouped as a total of seven charges rather than added together to make 21.

The Premier League has not engaged with the media on any aspect of the case since February 2023, including confirming the current number of charges.

While Everton and Nottingham Forest were also charged with breaching PSR rules, their situations are not directly comparable with City's — those two clubs were subject to an updated Premier League rulebook from 2022-23 onwards and their cases only related to whether they exceeded the maximum allowable loss, where the rules in their entirety are far broader.

Regardless, the Premier League's historic PSR rules indicate areas in which it may seek to prove wrongdoing by City.

For example, Rule E.53.2.2 states that a PSR balance sheet should be "to the best of the club's knowledge and belief, an accurate estimate of future financial performance". If any of the charges already discussed should be upheld, it is clear how City may be in breach.

Rules E.54-57 relate to related party transactions, which are relevant to the Abu Dhabi-linked sponsorship deals City are alleged to have illicitly struck.

Finally, Rule E.59 relates to the well-known "losses in excess of £105million" limit — again, if previously discussed charges are upheld, a recalculation of City's PSR submissions with the new figures may find them in breach of this permitted total.

 

[Dylan]

Five charges of failing to comply with UEFA's FFP regulations

In 2014, City made a deal with UEFA after £118.75million of sponsorship was questioned and the club's own accounting was rejected. Their settlement saw City repay UEFA €20m from TV revenue, as well as submitting themselves to future spending guardrails. City publicly announced their displeasure with UEFA's findings.


These charges, however, are slightly different, beginning in the 2013-14 season and continuing until 2017-18. In some sense, this predominantly comes under UEFA's remit, but the Premier League has its own rules requiring that clubs also follow the continental ones — these are the laws that City are alleged to have broken.

The Premier League has not explained exactly which UEFA rules it is referring to. For example, Rule B.15.6, as it stood from 2014-15 until 2017-18, simply reads: "Membership of the league shall constitute an agreement between the league and each club to be bound by and comply with the statutes and regulations of UEFA".

But it is likely to relate to the possibility that if City's true PSR numbers are found to be different to their publicly declared ones, they break UEFA's maximum-allowable-loss restrictions as well as those of the Premier League.

 

[Dylan]

Thirty-five charges of failing to cooperate with Premier League investigations

This is straightforward to explain, although 35 is another very high number.

Simply put, the Premier League accuses City of breaking numerous rules related to "acting in good faith" since its investigation began in 2018 — the charges relate to each of the seasons from 2018-19 to 2022-23, inclusive.

They were found to have done similar by UEFA.



Specific rules City are alleged to have broken include the failure to release documents to the Premier League by insisting they are confidential, and not providing "full, complete, and prompt assistance to the (Premier League) board". City expressed their surprise at this during the initial public comments following the charges, "given the extensive engagement and vast amount of detailed materials that the EPL has been provided with".

To get some sense of the mood of this process, one witness who had already been spoken to by City's lawyers described it as "hardcore", "aggressive", and "no-holds-barred" — though this is more illustrative of the enmity between the two sides rather than specifically related to non-cooperation.

Initially, the CFCB hearing found that City had breached Article 56 of its laws by failing to provide requested information and at one point advancing a case that the club's ownership "must have known to be false".


City appealed to CAS, stating they did not need to authenticate the leaked emails and arguing they went beyond what was needed in helping the panel.


However, the CAS upheld the decision of the CFCB, pointing to the club's failure to provide witnesses, complete copies of the leaked emails, and prevaricating over the identity of the mysterious "Mohamed".

 

[Dylan]

What happens next?

With closing arguments made on December 6, the three-person commission is now compiling its verdict. The identity of that panel has been tightly guarded.

There is no set time frame on how quickly it must reach a decision, unlike last season's PSR cases involving Everton and Forest. Those cases took around a month to reach their judgments, while City's case is far more wide-reaching and complex.

Nevertheless, all parties expect a decision to be released before the end of the season. With the process governing a case of this scope effectively unprecedented, it is not clear whether City, if guilty, will immediately be given their punishment or whether that will be finalised at a later date. City have denied any wrongdoing throughout.

Both sides have the right to appeal any verdict. English (and European) football awaits.