Manchester City charged with breaches of financial rules

The Premier League has referred Manchester City to an independent commission over more than 100 alleged breaches of finance rules since the club were acquired by the Abu Dhabi-based City Football Group.

Manchester City players celebrate
Photo: PHOTOSPORT

The referral came weeks before the expected publication of a government white paper set to recommend the establishment of an independent regulator in English football to deal with the game’s finances, club ownership and corporate governance.

City, the world’s highest revenue-generating club last season according to Deloitte, are alleged to have committed multiple financial breaches between 2009 and 2018, the league said on Monday.

League rules state that charges such as those faced by City could, if proved, result in a club being expelled from the Premier League in the worst-case scenario.

Offending clubs may alternatively be deducted points, fined or reprimanded.

While it remains to be seen what sanctions the commission imposes on City, a stricter stance by the Premier League on club finances could deter potential investors in clubs like Manchester United, according to a sports finance lawyer.

Both Manchester United and Liverpool are seeking new investors, in large part due to Middle Eastern investment in clubs such as City and Newcastle United and the collapse of a planned Super League, industry experts have told Reuters.

City, who were acquired by City Football Group in 2008, are also charged with failing to cooperate with the Premier League’s investigation, which was launched in December 2018.

City are alleged to have breached rules relating to the provision of accurate financial information, “in particular with respect to its revenue (including sponsorship revenue), its related parties and its operating costs”, the league said.

The club, who have won the Premier League title six times since the Abu Dhabi takeover, said they were surprised by the league’s “issuing of these alleged breaches”.

“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,” City added.

The charges stem from a Premier League investigation into City’s financial dealings launched four years ago, after the release of a tranche of “Football Leaks” documents obtained by the German publication Der Spiegel.

SUBSEQUENT BAN

City were subsequently banned from the Champions League by European governing body UEFA for two years, but successfully appealed to the Court of Arbitration for Sport (CAS), which overturned the ban in 2020.

The club were fined 30 million euros ($32.28 million) by UEFA, which CAS reduced to 10 million euros.

In addition to the charges relating to the club’s revenue and operating costs, City are also alleged to have not fully disclosed managerial remuneration from 2009 to 2013, when Roberto Mancini was manager.

The club are also charged with failing to comply with Premier League’s rules requiring clubs to follow UEFA’s financial fair play (FFP) regulations from 2013 to 2018 and failing to follow the Premier League’s rules on profit and sustainability from 2015 to 2018.

FFP regulations are designed to stop clubs running up big losses through spending on players. They also ensure sponsorship deals are based on their real market value and are genuine commercial agreements — and not ways for owners to pump cash into a club to get around the rules.

“The proceedings before the Commission will… be confidential and heard in private,” the Premier League said in a statement.

“The Premier League will be making no further comment in respect of this matter until further notice.”

-Reuters