web analytics
Manchester City finances: What do Premier League charges mean?

Manchester City finances: What do Premier League charges mean?

Etihad Stadium
Manchester City have been accused of not co-operating with a Premier League investigation that started in December 2018

The Premier League’s decision to charge Manchester City with breaking its financial rules has shocked the domestic game.

The Premier League champions have become a dominant force in English football in recent years, winning six league titles since they were taken over by the Abu Dhabi United Group in 2008.

But how have City got here? How significant are the charges? And could they really be kicked out of the Premier League?

BBC Sport answers the key questions.

Why are Man City being charged?

After an investigation lasting more than four years, the Premier League released a statement on Monday saying it had charged City with more than 100 breaches of financial rules from 2009 to 2018.

“In terms of charges, there are two areas,” football finance expert Kieran Maguire told BBC Radio 5 Live’s Monday Night Club.

“First, accusations that Manchester City have artificially inflated the money coming into the club, with particular respect to commercial and sponsorship deals. The Premier League appears to be claiming the money was actually coming from the club owner, which doesn’t count towards FFP (financial fair play), but was being disguised as sponsorship income, which does count towards FFP.

“The other charges are in relation to Manchester City being alleged to have artificially deflated the costs of running the club by having managers on contracts with another company connected to the owners so that they only put through a small element of the true cost of managing the club through the books.”

How have City got here?

In November 2018 German newspaper Der Spiegel published leaked documents alleging City inflated the value of a sponsorship deal and deliberately misled Uefa so they could meet FFP rules which require clubs to break even.

Following the allegations, Uefa launched an investigation and ruled in 2020 that that City committed “serious breaches” of FFP regulations between 2012 and 2016.

However, a two-year ban from European competitions was overturned by the Court of Arbitration for Sport (Cas) later that year.

The Premier League’s investigation started in December 2018. City said the allegations were “entirely false” and that allegations in Der Spiegel came from “illegal hacking and out of context publication of City emails”.

Why now?

City said they were not given advance warning of the Premier League statement this week.

They questioned the timing – given the UK government’s white paper on football governance is due to be published this month. It is felt that bringing this case is likely to be used by the Premier League as evidence of dealing with governance issues itself rather than a proposed independent regulator.

“It would be good for the league to be seen to have some teeth and take on a member – and a shareholder – so we are entering a period of lobbying and politics. There is little coincidence that the two things have occurred [at the same time],” said Maguire.

“There’s an awful lot of the dark arts of politics taking place and football is being used as a vehicle for this. We’ve had a period of self-regulation within football and that has brought us to where we are.”

BBC sports editor Dan Roan said: “It is easy to see why insiders at City are suspicions of the timing.

“While the timing is intriguing, the sheer number of charges perhaps shows why it has taken the Premier League so long to get here.

“However, many will say the suggestion that this is linked to the football regulator white paper being delayed as a little far-fetched. After all, the fact it has taken the Premier League four years to actually bring charges arguably strengthens the case for external regulation rather than undermining it.

“Furthermore, had the Premier League wanted to send a message to government that it could regulate itself, surely it would have made this move some time ago, before plans for the regulator were finalised.”

How significant is this?

“This is potentially the biggest financial scandal in the Premier League’s history,” said Roan. “No club has ever faced such a catalogue of charges.

“If cheating is proven it would be harmful to the dominant force in the English game, to its Abu Dhabi owners, to the concept of state-owned clubs and the whole idea this is a fair competition.

“City could also lose Pep Guardiola, the manager warning last year he would resign if it turned out the club had misled him when denying breaking the rules.

“This could drag on for months and cast a long shadow over the Premier League in the process.”

Maguire said: “If Man City are guilty, there have been accusations against other clubs and does this actually create a snowball?

“Certain clubs have been lobbying against Man City. Does this now create a vicious circle in the world of the Premier League where everyone is pointing fingers at each other.”

What have City said?

City said they were “surprised” by the charges, because of what they say the “extensive engagement and vast amount of detailed materials” they claim had been provided to the Premier League.

“The club welcomes the review of this matter by an independent commission, to impartially consider the comprehensive body of irrefutable evidence that exists in support of its position,” read a statement.

“As such we look forward to this matter being put to rest once and for all.”

City are understood to be confident in their position, and that includes the charges that were time-barred in their Uefa case. They believe they provided the relevant evidence around those charges to the Premier League some time ago.

What will happen to Man City?

The Premier League has referred City to an independent commission over the alleged rule breaches.

The proceedings of the commission – chaired by Murray Rosen KC – will be confidential and heard in private.

After the commission has made its decision an appeal can be made to a separate appeals body within the Premier League, says sports law barrister Ashley Cukier.

“At that point, generally speaking, that is where the process will end,” Cukier said.

“It’s not like the Court of Arbitration for Sport (Cas) where things can escalate on to a European level. This is a Premier League matter that is going to be dealt with domestically.”

What punishments are available?

If City are found guilty of rule breaches, the commission can impose punishments ranging from a fine and points deductions to expulsion from the Premier League.

“The potential tariffs are limitless,” Maguire said.

“It could be anything from ‘don’t do it again’, to a fine, to a points deduction, to stripping Man City of titles, to even expelling them from the Premier League.”

In 2011 QPR escaped a points deduction but were fined £875,000 after being found guilty for breaching transfer regulations, while Leicester and Bournemouth received fines for breaching FFP rules when they won promotion to the Premier League in 2013-14 and 2014-15 respectively.

Last month Italian side Juventus were docked 15 points in Serie A following an investigation into transfer dealings.

“I don’t see any restriction in what they can do in terms of sanctions,” Cukier said.

“The question for the commission will be what sanction it feels is appropriate.”

How to follow Manchester City on the BBC banner

Manchester City banner footer

Read More

Add Comment

Your email address will not be published. Required fields are marked *