The Premier League on Tuesday confirmed that Manchester City was found guilty of all charges related to serious breaches of the competition’s financial rules over a nine-season period. Moreover, City were also found guilty of another wrongdoing, arranging “sham contracts” with a number of commercial partners to inflate the club’s revenue and reduce its costs. However, no sanction has been confirmed, and City have also been given a deadline until October 2 to appeal the independent Commission’s findings.
Manchester City are in danger of being relegated, and there is also chatter about the club’s title wins being stripped. However, there’s no confirmation about the possible sanctions. The battle is expected to continue for a long time as City have previously stated that they would appeal the Premier League’s decision, maintaining their innocence.
However, the Premier League, in its statement, confirmed that the sanctions issue will be addressed separately in a further hearing with the independent commission. And the events from there would remain private and confidential until a time comes when publication of the outcome is permitted.
In a detailed statement, the Independent Panel also revealed that City misstated its accounts, concealing the true state of its finances from its auditors and in breach of football regulations. Moreover, the eight-time Premier League winners also breached the English top-flight football competition’s and UEFA’s spending limits, according to the official statement.
“During the Premier League’s investigation, Manchester City committed multiple breaches of its duties of co-operation and utmost good faith towards the League (three of the four alleged breaches were upheld),” the official statement stated.
More about sham contracts
The independent commission also found that the club arranged “sham commercial deals” with several of its sponsors over a nine-year period, describing it as a “disguised funding scheme” because the companies were 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, which was funded by ADUG,” the statement said.
“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 statement added.
Manchester City also 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 Premier League stated.
During the four-year investigation conducted by the Premier League, the club also committed multiple breaches of its duties of co-operation and utmost good faith towards the League. The Commission also concluded that the club had “made concerted efforts to stop and frustrate the PL investigation.”
“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,” Richard Masters, Chief Executive of the Premier League, 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 added.