The Premier League has labelled Manchester City’s historical commercial arrangements “sham” contracts.
Manchester City continues to protest its innocence following an independent Commission ruling that found the club guilty of serious Premier League financial breaches spanning nine seasons.
The Commission found that between the 2009/10 and 2017/18 seasons, Manchester City arranged “sham” commercial agreements with several partners which artificially inflated the club’s revenues and reduced its costs by more than £900m.
The Premier League said the arrangements were part of a disguised funding scheme, with Abu Dhabi United Group Investment & Development Ltd (ADUG) covering sponsorship payments that the commercial partners weren’t required to make.
The Commission also found that Manchester City misstated its accounts, concealed its true financial position from auditors and football regulators and significantly breached both the Premier League’s and UEFA’s spending limits.
Three of four alleged breaches relating to the club’s duties of co-operation and utmost good faith during the Premier League’s four-year investigation were also upheld.
Richard Masters, CEO of the Premier League, said the decision “establishes the facts of what happened at Manchester City during this period”, adding that it details how the club “systematically broke Premier League Rules for nearly a decade”.
The Premier League will address the question of sanctions in a separate hearing, with the Commission able to impose measures including fines, points deductions and other sporting sanctions.
“This disciplinary case, and this decision, are the most significant in Premier League history,” said Masters. “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.”
Manchester City has until 2 October to appeal the findings, with the case setting a significant precedent for financial regulation in English football.
Earlier this week, David Winnie, Partner and Head of Sport at Gilson Gray, told Insider Sport: “For the wider game, this case could become an important reference point for how financial regulation, independent sporting adjudication, sanctions and appeals operate at the highest level of English football.”
Manchester City deny findings and prepare appeal
Manchester City has rejected the Commission’s findings, stating that it’s “disappointed and surprised” by the decision and that it will pursue an appeal.
In a video statement, Manchester City CEO Ferran Soriano said the Premier League’s case rested on what he called a “single false accusation” that the club’s owners had secretly funnelled personal money into Manchester City through sponsors from Abu Dhabi.
Soriano said the club had provided bank statements, money transfers, witnesses and other evidence which, in Manchester City’s view, showed that the money didn’t come from its owner.
He said the Commission had reached a conclusion that was “clearly wrong” and accused it of ignoring extensive evidence provided by the club.
In a written statement, the club said the opinion contained “clear material errors of law, principle and fact” and was “unsafe”, stating that its lawyers would file an appeal.
Soriano also said Manchester City would be “relentless” in its efforts through the independent appeal process and other legal avenues, adding that the club would take “all necessary action to protect the club and seek compensation from any party that tries to damage it”.
Current partners face questions
The Commission’s findings have brought attention to Manchester City’s commercial relationships, given the Premier League’s description of the historical sponsorship arrangements involving the club and ADUG.
The Premier League said some commercial partners paid only part of the agreed sponsorship fees, with ADUG covering the remainder and other ADUG-funded arrangements allowed Manchester City to report lower operating costs than it actually incurred.
Nothing in the Premier League documentation links City’s current sponsors to these past deals. However, the ruling raised people to ask questions about the club’s current commercial network.
Lucozade and Kellogg’s were approached for comment following the publication of the decision by multiple media outlets.
Lucozade, which partnered with the Premier League club in February, said it was aware of the ongoing Premier League process but would not comment as it continues, with a spokesperson adding that its partnership with Manchester City is focused on “supporting players in training and matchdays”.
Kellogg’s also declined to comment on the case, saying it wouldn’t be appropriate to comment on an “ongoing case or speculation around it”.
