Have Manchester City cheated their way to top of the pile?
German paper claims club inflated sponsorship deals
MANCHESTER City have been accused of cheating after claims that their owner paid large parts of inflated sponsorship deals himself.
According to a report by German newspaper Der Spiegel, based allegedly on more hacked documents from the Football Leaks whistleblowers, City owner Sheik Mansour paid significant parts of so-called deals with club sponsors in a bid to comply with UEFA’s Financial Fair Play (FFP) regulations.
In one agreement with Etihad Airways, it is claimed a staggering £59.5million of the £67.5m was essentially financed by Mansour. The revelations could lead to sanctions from UEFA and the Premier League. Neither would comment last night and there is concern about the method by which the documents were obtained.
If they conclude that the emails have been obtained illegally, City — who were sanctioned in 2014 for a breach of FFP rules — could face no further action. City last night reiterated that they ‘will not be providing any comment on out-of-context materials purportedly hacked or stolen from City Football Group and Man City personnel and associated people’.
But with yet more revelations due to be published as this week progresses, UEFA and the Premier League are understood to be monitoring the situation-.
While UEFA could impose a punishment as severe as a ban from the Champions League, a transfer ban would appear a more likely outcome if they choose to act.
The Premier League would probably follow UEFA by at least examining if the English champions are in breach of their sponsorship rules.
‘At the very least this is embarrassing for City,’ said a senior source last night. ‘Questions certainly need to be asked.’
Doubts over the authenticity of the deals with companies based in the Sheik’s Abu Dhabi homeland have long been raised, and the emails Der Spiegel claim to have in their possession certainly seem to echo those concerns.
One of the emails from 2010, reportedly from board member Simon Pearce communicating with bosses, allegedly discusses a £15m deal with partner Aabar. ‘As we discussed, the annual direct obligation for Aabar is £3m,’ he allegedly wrote. ‘The remaining £12m will come from alternative sources.’
Der Spiegel say that sentence confirms accusations that Mansour personally paid a portion of the sponsorship money.
In another message, City’s chief financial officer Jorge Chumillas allegedly wrote that the club faced a £9.9m shortfall to comply with FFP thanks to the contract termination of manager Roberto Mancini.
The Italian was sacked in 2013. His giant pay-off meant yet more expenditure on City’s books that had to be covered by income under UEFA rules.
He adds: ‘I think that the only solution left would be an additional amount of AD (Abu Dhabi) sponsorship revenues that covers this gap.’
According to the report, Chumillas goes on to suggest sponsors Etihad pay an extra £1.5m, Aabar £0.5m and the tourism authority £5.5m. In a further reported email exchange, it is alleged Chumillas asks Pearce if they can change the date of payment from Abu Dhabi sponsors. Pearce responds: ‘Of course, we can do what we want.’
Der Spiegel go on to allege that City’s financial reports are ‘a web of lies’. They say that in another email Pearce allegedly writes that stadium and jersey sponsor Etihad’s ‘direct contribution remains at a constant £8m’ which does not appear to tally with the actual obligation of £35m. The publication claims that annually, the deal was worth £67.5m but say that Chumillas is alleged to have written to Pearce: ‘Please note that out of those £67.5m, £8m should be funded directly by Etihad and 59.5 by ADUG.’ ADUG stands for the Abu Dhabi United Group, which is City’s ownership vehicle. The report ends by alleging that internal City calculations noted that by May 2012, when the club won the Premier League, a total of £127.5m had been used to supplement Abu Dhabi partnership deals. It also said that the total investment from Abu Dhabi into the club in the four years it took to deliver that first Premier League title in 2012 was in excess of £1billion.
UEFA said: ‘We cannot comment on specific cases due to confidentiality obligations which UEFA must respect.’
A statement from Etihad said: ‘The airline’s financial obligations, associated with the partnership of the club and the broader City Football Group, have always been, and remain, the sole liability and responsibility of Etihad Airways.’
Aabar and the Abu Dhabi tourism authority were unavailable for comment.