An independent Commission found Manchester City guilty of serious financial rule breaches over a decade, using ‘sham’ contracts to inflate revenues. The Premier League announced the findings, while Man City maintains its innocence and plans to appeal.
An independent Commission has found Manchester City guilty of serious breaches of the Premier League’s financial rules, including violations “related to financial reporting”, according to the Premier League website. The Manchester City said it remains “innocent” of the allegations and will pursue all available legal and regulatory avenues.
The statement on the Premier League website said the independent Commission found that between the 2009/10 and 2017/18 seasons, Manchester City “arranged ‘sham’ contracts with several commercial partners, misrepresenting the true agreements between the parties, to artificially inflate the club’s revenues and reduce its costs”. The Commission also found that the club “filed misstated accounts, concealed the true state of its finances from auditors and football regulators”, significantly breached both the Premier League’s and UEFA’s spending limits, and committed multiple breaches of its duties of cooperation and utmost good faith during the Premier League’s investigation, with three of the four alleged breaches upheld.
Commission’s Findings on Financial Breaches
“The independent Commission found that Manchester City arranged ‘sham’ commercial deals with a number of its sponsors during the period, which were part of a disguised funding scheme, whereby those companies were only required to pay a portion of the relevant sponsorship fees. The remainder was funded by Abu Dhabi United Group Investment & Development Ltd (ADUG), which owned the club. As part of the scheme, further ‘sham’ arrangements, funded by ADUG, were entered into to enable the club to record lower operating expenses than it actually incurred, as well as a ‘sham’ circular arrangement with Fordham, an entity that purchased the club’s players’ image rights, that was funded by ADUG,” the Premier League’s statement reads.
“The purpose of these schemes was found to have been to artificially inflate the club’s revenues, and reduce its costs, by more than £900 million during the affected period, to appear to comply with financial rules. The consequence of this, as the Commission found, was that the club filed misstated accounts and concealed the true state of its finances from its auditors and football regulators. The Commission concluded that ‘by its conduct the club clearly intended to circumvent the PL Rules‘,” the statement added.
The Commission found that Manchester City failed to accurately report its finances under Premier League and UEFA regulations, which would have resulted in significant breaches of spending limits. It also concluded that the club breached its cooperation duties during the Premier League’s investigation and made efforts to hinder the process.
“As a result, Manchester City failed to accurately report its income and expenditure for the purposes of the Premier League’s Profitability and Sustainability Rules and UEFA’s Club Licensing and Financial Fair Play Rules. The Commission found that, had all of the relevant agreements been reported accurately in the club’s accounts, it would have been in breach of both the League’s and UEFA’s spending limits by a very substantial amount,” the statement said.
“In addition, during the course of the four-year investigation conducted by the Premier League, the club committed multiple breaches of its duties of co-operation and utmost good faith towards the League. The Commission concluded that the club had ‘made concerted efforts to stop and frustrate the PL investigation,” it added.
Premier League CEO on the Verdict
Richard Masters, Chief Executive of the Premier League, said the core decision establishes the facts of what happened at Manchester City during this period. “It details how the club systematically broke Premier League Rules for nearly a decade. It also vindicates the Premier League’s decision to pursue this case against Manchester City. While the process to date has been both long and difficult, the League has remained determined that the facts be established independently,” he said.
“It is a key responsibility of the Premier League to ensure that the Rules, approved by the clubs themselves, are upheld to protect the integrity of the competition. It is paramount that the League remains competitive and fair for all clubs and for the fans. We take that role extremely seriously,” he added.
Masters said this disciplinary case, and this decision, are the most significant in Premier League history. “There are elements of the case that remain to be decided, including, importantly, what sanction must follow for these breaches. Now we have the Commission’s decision, we are committed to moving swiftly through the remainder of the process, to provide certainty for the League, our clubs and fans,” he said.
Manchester City Vows to Appeal
In response to the charges, Manchester City FC expressed disappointment and surprise over the Premier League Commission’s findings, stating that the club remains “innocent” of the allegations and will pursue all available legal and regulatory avenues.
“The Club is innocent of the accusations made by the Premier League and a comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case. The Club will therefore be relentless, and where necessary proactive, in any and all appropriate regulatory and legal forums,” the club’s statement said.
Manchester City said the Premier League process is still ongoing and confirmed it will pursue an appeal, arguing that the Commission’s opinion contains errors of law, principle and fact. The club added that it had respected due process over eight years and could not comment further until future proceedings are completed.
“The Premier League process remains ongoing, with significant elements uncompleted. Manchester City FC will now pursue the appeal avenues open to it, on the basis that the opinion contains clear material errors, of law, principle and fact, and is unsafe. The Club has diligently respected due process for eight years on the basis that the Premier League Board and Executive would behave as an independent, impartial and fair-minded regulator, free from partisan influence. The Club is obviously restricted in what it can say further until all future proceedings are complete,” the club said in its statement. (ANI)
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