Manchester City banned from European cups for two seasons

Manchester City striker Raheem Sterling in a Premier League match against Tottenham on February 2, 2020. DAVID KLEIN / REUTERS

The Manchester City English club has been excluded from the European cups for the next two seasons for " serious violations of financial fair play ", this regulatory mechanism which aims to prevent clubs from the Old Continent from spending more than they earn, under penalty of sanctions, announced on Friday 14 February the Union of European Football Associations (UEFA).

The club, currently second in the Premier League and qualified for the knockout stages of the Champions League, has also been fined 30 million euros. Manchester City management immediately announced that it would appeal to the Sports Arbitral Tribunal (CAS).

Property of Emirati Sheikh Mansour Bin Zayed Al-Nahyan, Manchester City is penalized for assessing " excess sponsorship income in their accounts " over the period 2012-2016.

UEFA opened an investigation in early 2019 after the English club's financial practices, as well as those of Paris-Saint-Germain (PSG), were singled out by the "Football Leaks".

Workaround strategies

In autumn 2018, a survey by the European Investigative Collaborations (ECI) consortium, of which Mediapart in France, had revealed how the Citizens had implemented practices to circumvent financial fair play, which came into force in 2013.

A first strategy had been to artificially inflate the amounts of the club’s partnerships, the money not coming from these apparent partners but from the owner’s personal fortune.

City had thus received nearly 2.7 billion euros from its owner – a member of the ruling family of Abu Dhabi (since 2008) – through overvalued sponsorship contracts.

The second strategy, revealed by Der Spiegel, consisted of outsourcing certain expenses, entrusted to parallel companies financed by Mansour in person.

Mediapart described how one of them, called Fordham, worked. "Fordham allows City to outsource the cost of image rights – what it pays its players to use their image in advertisements or marketing. Fordham pays the players, and City rakes in almost $ 30 million a year in advertising revenue, spending nothing. "

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A fine in 2014, negotiated downwards

Manchester City was previously fined in 2014 by UEFA for violating financial fair play rules. The episode, however, resulted in a little "arrangement between friends", revealed by the "Football Leaks".

The European football body initially wanted to impose a fine of 60 million euros, a sum which the President of the Citizens Khaldoon Al Mubarak had refused to pay. The then UEFA general secretary, Gianni Infantino, now president of FIFA, bypassed the investigative chamber of the Club Financial Supervisory Body (ICFC), the body of independent UEFA survey.

Dealing directly with the leaders of the Citizens, Mr. Infantino agreed to reduce the fine from 60 to 20 million euros. While specifying: "The remaining 40 million will only be due if the club does not return to financial equilibrium in the future. " Manchester City has also been forced to cut spending on recruiting.

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Shaken model

If the two-year sanction of exclusion from European competitions were to be confirmed on appeal by the CAS, it would risk shaking the Manchester City model.

The club is certainly one of the richest: it ranks second, behind PSG, in the "Soccerex" report, which establishes each year the ranking of the hundred most financially powerful clubs based in particular on the financial potential of the players and club assets and liabilities.

But the Champions League is an important meeting for its owners, anxious to increase their income thanks to a victory in this competition. However, the club has failed since 2016 to reach the semi-finals. A two-year exclusion could also lead to the departure of many of the team's stars.

Read also The Champions League, essential for Manchester City's business model

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