September 30 – The Premier League has confirmed that Manchester City have been found guilty of more than 100 charges of breaching Premier League financial rules between the 2009-10 and 2017-18 seasons.
An independent Commission found that Manchester City arranged “sham” contracts (which misrepresented the true agreement between the parties) with several of its business partners, as well as relying on “sham” deals with others, to artificially inflate the club’s income and reduce its costs.
The Commission said City also submitted incorrect accounts and concealed true finances from its auditors and football regulators, and significantly breached Premier League and UEFA spending limits.
The club has also committed multiple breaches of its duties of cooperation and utmost good faith towards the League, the Commission said.
The Commission said the aim of the bogus schemes was to artificially inflate revenues and reduce costs by £900m to comply with the Premier League’s financial rules.
The net effect of the “fake” contracts was for the owners to provide more than £830m of secret funding to the club.
Richard Masters, chief executive of the Premier League, said: “The core decision sets out the facts of what happened at Manchester City during this period. It details how the club systematically broke Premier League rules for almost a decade…
“It is a key responsibility of the Premier League to ensure that the rules, approved by the clubs themselves, are enforced to protect the integrity of the competition. It is paramount that the League remains competitive and fair for all clubs and fans. We take this role very seriously.”
“This disciplinary case, and this decision, are the most significant in the history of the Premier League. There are elements of the case that still remain to be decided, including, above all, what sanction should follow for these violations. Now that we have the Commission’s decision, we are committed to moving quickly through the rest of the process, to give certainty to the League, our clubs and fans.”
The “bogus” business deals “were part of a disguised financing scheme” which saw sponsors pay part of the sponsorship fees and the rest funded by club owner Abu Dhabi United Group Investment & Development Ltd (ADUG).
City reported £360m in sponsor fees in the three seasons they won the Premier League: 2011-12, 2013-14 and 2017-18. The commission found that only 43 million pounds was legitimate, the rest came through their owners and was disguised.
“The relevant sponsorship agreements were found to be false or, at the very least, did not reflect their economic substance,” the commission said.
Other “sham” financial arrangements that ADUG funded allowed the club to record lower operating expenses than it actually had (ADUG funded the difference).
A redacted version of the Basic Decision also highlights a “bogus” circular agreement with Fordham, which bought the image rights of the players. Fordham was funded by ADUG.
The club, which has consistently maintained its innocence, has until Friday 2 October to appeal the Commission’s conclusions.
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