The court game is on, and it promises to be as crucial as a Champions League knockout game. One of the world's wealthiest clubs, Manchester City, was sacked for the next two European Cup seasons on Friday (14 February) by the UEFA financial police. Reason? To have committed "Serious violations by overvaluing the income from sponsorship contracts in its accounts for the period 2012-2016". And thus to have broken the rules of financial fair play (FPF), a mechanism introduced in 2010 by UEFA and by virtue of which clubs must not spend more than they earn.
The double champion of England seized the Arbitral tribunal of sport (CAS) to try to cancel this sanction, prelude of a possible "Open legal battle", says Antoine Duval, a researcher in European sports law at the Asser Institute in the Netherlands.
Page Contents
What message did UEFA want to send?
It all starts with “Football Leaks” (published since November 2018 in the German weekly Der Spiegel and notably uncovering the fraudulent system put in place by the English club to artificially inflate its revenues). They revealed UEFA’s weakness and its difficulties: financial fair play was easily circumvented, and even when the body had information, it was not ready to act strongly. This time, she needed to show that she was taking this subject seriously. Above all, the "Football Leaks" showed strong suspicions of manipulation of the accounts on the part of Manchester City to circumvent the rules, and it was the first thing that UEFA wanted to sanction.
Do other clubs that have been targeted by financial fair play, like PSG, have reason to worry about this sanction?
The message to all clubs is that if you cheat, don't give your true financial picture, and UEFA gets the information, the penalty will be very severe. If, on the contrary, you cooperate, UEFA is ready to discuss and find milder sanctions suited to your situation. This is what happened with PSG (in June 2018, the investigative chamber of the Club Financial Control Authority (ICFC) had decided not to prosecute the club, after an investigation launched following the recruitment of Neymar by Kylian Mbappé in the summer of 2017 ).
With the appeal to the CAS, how likely is this sanction to apply?
The CAS should initially suspend the exclusion provisionally pending a decision on the merits of the appeal. In view of the case and the consequences, it would be advisable for the parties' debates to take place in the spring and for the decision to be taken fairly quickly. But it won't be until summer.
On the merits, the CAS has already concluded that financial fair play was compatible with European Union law in a decision against the Turkish club Galatasaray (in 2016, the Turkish club contested its exclusion from any European competition for a year and had been dismissed by the court). A reversal of jurisprudence would be very unlikely. This will probably not be a test at the CAS level.
Manchester City's recourse is therefore hopeless?
Not necessarily, it is possible that the CAS considers that the way in which the rules were applied is problematic. For example, he could consider that there is a breach of equality in comparison with the treatment of PSG by UEFA (An investigation by the New York Times had shown that the body had not been very zealous during the investigation).
If the CAS makes a decision favorable to the English club, it would be more on the application of the rules than on their compatibility with the law of the Union. It is difficult to assess because we do not know the details of the cases in these two cases. There is a lack of transparency in the way cases are handled. It would also be a good thing if the CAS hearing could be made public.
Is financial fair play strong enough legally?
Manchester City has already claimed (in internal emails, published during “Football Leaks”) that he would be willing to invest “30 million pounds to recruit the 50 best lawyers” to challenge the decision before the European authorities. If the CAS agrees with UEFA, the case could end up before European authorities, such as the Commission and the Court of Justice in Luxembourg.
It would be an open legal battle to raise the fundamental question of compatibility with competition law and the right to freedom of enterprise provided for in the European treaties. This would be the real test for financial fair play. Personally, I think UEFA can demonstrate this. Friday's decision is far from the end of the proceedings, but rather the beginning of a judicial story.
