breaking down the charges against manchester city: what’s at stake?
One of the most prominent football teams in the world, Manchester City is a professional team based in Manchester, England, and it plays in the Premier League (the League) which is the highest level of English football. This description would have been unfitting for the club until the club was bought by Sheikh Mansour of Abu Dhabi United Group in 2008 who has since gone on to win eight Premier Leagues, one Champion League, three Football Association (FA) cups and six League Cups. City has housed many legendary players in the field which includes Keven De Bruyne, Sergio Aguero, Yaya Toure, Vincent Kompany, Erling Haaland just to name a few.
This club has made its way into the news recently and this time its not to celebrate their wins or achievements but because they have over a hundred charges filed against them by the League. These charges are regarding the violations of the League regulations that have been alleged taking place since 2009-10 to 2022-23 season. The Club starting from the season of 2009-10 till 2017-18 has been alleged to have not provided accurate disclosure of the financial information to give the league a “true and fair view” of the club’s revenues, including sponsorships and operating costs among others.[1] Additionally, according to the League, Manchester City blatantly broke UEFA’s Financial Fair Play (FFP) rules during the 2013–14 to 2017–18 seasons. The League alleged that the Club was not cooperating with the League for the investigation by not providing the required information and correspondences. The League also alleged that the Club did not fully disclose the managerial contracts and the remunerations related to it from 2009-10 until 2012-13 as well as the player compensation from 2010-11 to 2015-16 campaigns.
54 charges have been brought against City for failing to submit current and correct financial information, 14 charges for failing to produce accurate financial reports for player and management fees, 35 charges for disobeying the League’s investigational requests, 7 charges for violating the Premier League’s Profitability and Sustainability guidelines, and 5 charges for breaking UEFA’s laws, including the FFP restrictions.[2] Manchester City has denied all the charges and claims against them.
A League club’s maximum loss over a given time period is determined by the Premier League Profit and Sustainability rules (PSR).[3] These rules decide the amount of money that teams can spend on player transfers etc to bring out the balance of income and expenditure. These rules differ from UEFA Financial Fair Play (FFP). These rules allow for teams to lose up to £105 million ($134m) over the course of three seasons or around £35 million per season. Teams such as Everton and Nottingham Forest, recently, has been charged with violation of these rules and were faced point deductions as penalty.
The UEFA’s FFP rules came into existence in September 2009 and was then further implemented in the 2011-12 season.[4] These rules came to be implemented to put an end to the reckless spending of the teams and stop rich benefactors from pumping in high amounts into the clubs which creates an asymmetry in the market as well as creates a huge gap in the wages of the players of such a team in comparison to other teams. It prohibits the teams from spending more than what they are earning.[5] The highest penalty for violation of these rules is the disqualification from the European competition while other penalties are fines, player transfer bans, withholding prize money etc.[6]
City claimed they were “surprised” by the allegation raised against them and vehemently denied all the claims and charges so raised. They also expressed feeling no apprehension that these happenings would impact the players or their game.
The nature of the case being unprecedented in scale and outcome makes it difficult to assume the consequences or ramifications of the same.[7] If the team is found to be guilty at the end of the independent hearing, then, the team may have to face point deductions, being stripped of their titles won during this period or even being demoted from the League. Stripping Manchester City of the league titles would result in implications difficult to handle. Manchester City being stripped of their titles would open the doors to a string of clubs who failed to win the title or lost out on revenue by missing European qualification to start looking to claim damages as well. The changes in the world of this sport will bleed well out of just the titles and winnings. This will also create a lot of wariness in potential investors. People who intend to invest in the sport will be discouraged leaving teams without a benefactor. The award that is highly anticipated by all those familiar with the world of football eagerly hope that the award will create a balance between the rights of such owners and the fairness involved in the game of football.
The Premier League Judicial Panel’s head selected an independent commission consisting of three judges to conduct the hearing from September 16 to December 6, 2024 at the London International Dispute Resolution Centre. It is anticipated that the final decision will be arrived on by the first quarter of 2025.
Author: Akhila Jose, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.
[1] https://www.reuters.com/sports/soccer/hearing-into-manchester-citys-alleged-breaches-premier-league-rules-2025-01-09/
[2] Supra n. 1
[3] https://www.sportingnews.com/in/football/news/premier-league-profit-sustainability-rules-financial-fair-play/42ef3c1a91043e191482250d
[4] http://news.bbc.co.uk/sport2/hi/football/8546561.stm
[5] http://news.bbc.co.uk/sport2/hi/football/europe/8256279.stm
[6]https://www.uefa.com/MultimediaFiles/Download/EuroExperience/uefaorg/Publications/01/59/87/45/1598745_DOWNLOAD.pdf
[7] https://www.manchestereveningnews.co.uk/sport/football/football-news/everything-you-need-know-man-29942383
