MANCHESTER CITY
in crisis
English Premier League champions Manchester City were yesterday banned by Uefa from the Champions League for two seasons for “serious breaches” of spending rules and failing to cooperate with investigators in a seismic ruling against one of world football’s wealthiest clubs.
The Abu Dhabi-owned team were also fined €30 million after an investigation sparked by leaked internal correspondence showed City overstated sponsorship revenue in a bid to comply with Financial Fair Play regulations.
The punishment prevents City from playing in any European competition, including the Europa League, until the 2022-23 season. It could have a significant impact on the club’s ability to sign players and retain manager Pep Guardiola, whose contract expires next season.
The verdict was delivered yesterday to City following a hearing of Uefa’s club financial control body on January 22.
In a statement claiming Uefa’s investigation was “flawed” and “left little doubt in the result,” City announced plans to appeal to the Court of Arbitration for Sport.
Among football leaders calling for City to be punished was the head of the Spanish league, who has been critical of how “funding by state-aid distorts European competitions”.
“Uefa is finally taking decisive action,” La Liga president Javier Tebas said. “Enforcing the rules of financial fair play and punishing financial doping is essential for football’s future.”
City have never disputed the authenticity of the information contained in internal emails published by German media outlet Der Spiegel in October 2018 which showed alleged schemes by the club to allegedly cover up the true source of income in a bid to comply with FFP.
In 2015, Der Spiegel said emails were being sent internally at City showing the manipulation of sponsorship revenue from Etihad Airways,
Abu Dhabi’s state-owned airline which is the naming rights sponsor of City’s stadium and training campus as well as appearing on jerseys.
The sponsorship was said to generate £67.5 million annually for City. But City’s holding company, the statebacked Abu Dhabi United Group, channelled £59.9 million back to Etihad, according to Jorge Chumillas, the club’s chief financial officer, in an email to club director Simon Pearce.
The leaks showed City allegedly tried to artificially raise their revenue, in one case by €30 million, according to emails from 2013 reported by Der Spiegel. Abu Dhabi United Group was alleged to be sending cash to a shell vehicle which was created to supposedly buy the right to use players’ images in marketing campaigns.
There were further examples that Sheikh Mansour could have been the source of sponsorship revenue for Abu Dhabi state-owned companies like investment firm Aabar. Der Spiegel cited a 2010 email to Aabar from Pearce, the City director who also works for Abu Dhabi’s Executive Affairs Authority.
“As we discussed, the annual direct obligation for Aabar is GBP 3 million,” Pearce wrote. “The remaining 12 million GBP requirement will come from alternative sources provided by His Highness.”
City have already been punished by Uefa for violating FFP, striking an agreement in 2014 that saw the team fined rather than banned from the Champions League for inflated sponsorship deals with companies linked to the club or their ownership.
A leaked 2014 email from City lawyer Simon Cliff to a colleague showed the death of Uefa’s lead FFP investigator being celebrated: “1 down, 6 to go.”
Since 2011, Uefa have monitored the accounts of all clubs entering their two club competitions in a bid to curb unfettered spending on players regardless of the owners’ wealth.
City have been transformed into a football power in the decade since being bought by Sheikh Mansour bin Zayed Al Nahyan, a deputy prime minister of the United Arab Emirates and a member of Abu Dhabi’s royal family, winning the Premier League four times since 2012.
The City Football Group, of which City is the key component, was valued at US$4.8 billion in November after US private equity firm Silver Lake bought a stake of around 10 per cent for US$500 million. Silver Lake became the second major partner in the group, with a Chinese consortium owning 12 per cent. There are partner clubs in New York, Melbourne and Yokohama, among others.