Yesterday, UEFA handed down their verdict in their investigation in Manchester City breaching Financial Fair Play (FFP) and club licencing rules and as a result have banned Man City from UEFA competitions for 2 seasons, and fined the club 30m euros ($32m).
The Club Football Control Body (a panel of judges independent from UEFA) found that Manchester City were guilty of “overstating its sponsorship revenue in its accounts and in the break-even information submitted to Uefa between 2012 and 2016", and that the club "failed to cooperate in the investigation".
It’s that final sentence which is what makes things extra-interesting. City have been found not only to have broken the rules, but to have cooked the books and to have effectively obstructed the investigation by refusing to cooperate.
Essentially, financial fair play rules were put in place to prevent teams from financial doping and force them to live within their means. With a few exceptions in what the money is spent on, teams aren’t supposed to spend more money on transfers and wages than they make in player sales, merchandising and corporate sponsorship.
Man City have been judged to have tried to get around FFP rules by having recorded receiving sponsorships that were way over market value from companies connected to the club’s owner. There’s nothing wrong with a club effectively sponsoring itself, but they have to do it at market value, not at an amount that conveniently means they break even.
This is the second time Man City have been punished for this. In 2014, Man City were fined and forced to cap the amount of players in their European squad for breaching FFP, but Football Leaks in 2018 and documents published by Der Spiegel in Germany showed new evidence which caused UEFA to open another investigation.
With Man City having been found guilty of breaking the rules, a lot of fans will be wondering if that’s it, or will other seasons’ accounts be under scrutiny? Are the other teams under investigation too?
Man City’s next move isn’t immediately clear. They’re definitely not going to take this lying down. A club statement called the investigation by UEFA ‘flawed’ and ‘prejudicial’ and suggested that they had been treated unfairly from the start, with the club having ‘irrefutable evidence’.
An appeal to the Court of Arbitration for Sport (CAS) is almost certain. While most fans are rushing to judgement one way or another, depending on who they support, without knowing what evidence Man City have, it’s impossible to say whether an appeal will be successful. CAS could uphold the ban, overturn it, or reduce it.
Man City have already gone to CAS to try and have the investigation thrown out, and were seeking damages from UEFA, but it was ruled that they couldn’t appeal until the verdict was handed down and Man City were admonished for the tone of language they had used in correspondence.
Some fans are calling on Man City challenging the legitimacy of the FFP rules as a whole. There is a valid argument that, rather than making football more competitive, the FFP rules have only really succeeded in freezing the status quo.
I’d be surprised if Man City go down that route, as UEFA set the rules of their own competitions and Man City have chosen to play in them. Had Man City not accepted the invitation to play, then UEFA wouldn’t be able to touch them. Plus, the punishment is only in part for breaching FFP rules. The rest is for false accounting and not cooperating in the investigation.
Where things could get really messy is if Man City decide to go down the civil court route. The rules governing football don’t always compute with the laws that govern the real world and a ruling could change football. This could even be a test case for clubs to step away from the jurisdiction of UEFA and set up their own competition.
UEFA handing out a punishment now puts the Premier League in a tough spot. The Premier League now can’t bury their heads in the sand and make this go away. UEFA have acted, so they must follow. The FFP rules of the Premier League are different to those of UEFA; but as part of having a licence to play in the Premier League, clubs are required to provide true accounts. As it’s been ruled that City haven’t provided true accounts, then that’s a clear breach of Premier League rules too.
Potentially, the Premier League could deduct points from Man City, fine them or could even kick them out of the league (which is never going to happen). If they were kicked out of the Premier League, Man City would, under Football League rules, be required to join League Two.
This ruling is going to have a massive ripple effect, and its implications go beyond Man City. Should the ban be upheld, and assuming Man City finish in the top 4 of the Premier League (which is highly likely), then fifth place would get the Champions League spot. At present, that’s Sheffield United, which would be an amazing story, but it also sets up a scramble between clubs to battle for fifth. At the moment, with about a third of the season left to play, there are 9 clubs within 9 points of 5th.
As bullish and defiant as they’re sounding, this is going to hurt Man City. They have spent a lot of time building up their reputation as a club that does things the right way. As much as they deny it, Manchester City has also been a vehicle for the sportswashing of Abu Dhabi, through club owner Sheik Mansour, and his Abu Dhabi United Group.
Even if Manchester City get this ban overturned, it’s going to be difficult to shake off the perception amongst fans that they’ve cheated their way to success. Whether they have broken rules is now up to the courts to decide, but they have definitely tried to get around them. In my opinion, if you can get around the rules, the rules weren’t strict enough, so I wouldn’t call that cheating, but a lot of people would (and will).
In the short term, it’s going to have a big effect on the club. Pep Guardiola has shown signs of being ready to move on for a while now, and this might be the straw that breaks the camel’s back. Guardiola has publicly stated that he’d been assured by the owners that UEFA’s investigation would come to nothing, so he must be feeling let down.
Being banned from the Champions League is going to affect City’s recruitment of players. Not only will a lack of Champions League football make Manchester City less attractive to potential signings; but, as it’s estimated that the Champions League accounts for about 25% of Manchester City’s revenue, so they are going to have to make some reductions in wages and transfer fees in order to be compliant with FFP when their ban ends.