Q&A: What Man City did wrong and how they will be punished
Manchester City are facing the biggest financial scandal in the Premier League's history after being hit with more than 100 alleged breaches of regulations.
Here are the key questions around a case that threatens the sporting giant's future in the top tier of English football. For their own part City deny any wrongdoing and say they welcome “the review of this matter by an independent commission, to impartially consider the comprehensive body of irrefutable evidence that exists in support of its position”.
What punishments could City face?
Premier League rules effectively reserve the right to strip City of titles, hit them with points deductions and potentially even expel them from the competition.
Charges levelled at the club are unprecedented and the competition handbook gives the league enough wriggle room to decide on any proportionate punishment. Category W.51 in the league's rules detail how breaches can lead to the commission making any "such other order as it thinks fit".
Murray Rosen KC, who was appointed in 2020 as chair of the Premier League's first Judicial Panel, will now pick an independent panel to hear the claims.
Expulsion rather than retrospectively taking trophies is seen as more likely because the latter would be an immensely challenging punishment to administer.
As far as the Premier League is concerned, this is uncharted territory. Points deductions have been few and far since Middlesbrough became an early recipient, suffering a controversial relegation in 1996-97 with a three-point deduction for "illegally postponing" a fixture. The closest precedent to City's case is perhaps Juventus, the Italian club, who were recently deducted 15 points following an investigation into their past transfer dealings.
How long will this take?
The entire process is likely to take months. Uefa, who govern European football, had pursued a narrower case against City before banning the club from the Champions League in February 2020. On that occasion, the club overturned the ban via the sporting appeal courts.
This time, however, experts say the charges are more severe. Stefan Borson, a lawyer and former financial adviser to Man City, says the case includes the "strongest allegations imaginable" of financial doping. "Alarmist or not, the sheer extent of the charges are at a level that IF found proven, must lead to relegation," he tweeted.
Stephen Taylor Heath, head of sports law at JMW Solicitors, says, as it stands, that it is "impossible to predict the sanction but there may be an initial hearing on whether the charges are upheld and then a further hearing on a possible sanction.
"Any penalty must be within the panel’s powers...but should also be proportionate, while any appeal may relate to findings in relation to the allegations and/or the punishment," he added. "Equally the timing of any penalty - if there is one - would be crucial as a points deduction could have vastly different outcomes if retrospective over the relevant period or future seasons."
What are City accused of?
The champions are charged with 115 breaches, broken down into four main areas
1. Cooking the books
The most serious charges detail failures to provide “accurate financial information that gives a true and fair view of the club’s financial position, in particular with respect to its revenue (including sponsorship revenue), its related parties and its operating costs” between 2009 and 2018.
A key part of the Uefa case against City (see above) was the claim that £59.5 million declared as sponsorship money from Etihad Airways was in fact paid directly to the club by the Abu Dhabi United Group.
There are dozens of claims in this file and experts say this charge is the most serious. As leading sports lawyer Gregory Ioannidis explains, “primarily we are looking at financial mismanagement and failure to declare true accounts".
"The latter is difficult to prove, hence they are going back to 2009, as they want to make sure they demonstrate consistency in rule breaking," he added. "They will make a point.”
Stefan Borson, a lawyer and former financial adviser to Man City, says the case includes the "strongest allegations imaginable" that go beyond financial fair play. "The Premier League's case vs City is, for most part, not an FFP case at all," he tweeted. "More fundamental than that. It is that the club has provided junk financials (audited and forecasts) for nine years. That is their underlying allegation. An extraordinary thing to try and prove in an arbitration panel."
2. Roberto Mancini's pay arrangements.
Between 2009-10 and 2012-13, the club is alleged to have breached Premier League rules requiring "full details of manager remuneration in its relevant contracts with its manager".
These allegations were first detailed by Der Spiegel in the Football Leaks scandal, claiming half of Mancini’s contract was paid by a consultancy company during his time in charge. Der Spiegel has previously detailed how Mancini was guaranteed a £4 million bonus for winning the Premier League; £3 million for winning the Champions League, £1.5 million for the FA Cup and £1 million for the League Cup. Other perks included eight flights a year between Manchester and Italy for his family and £7,500 a month toward accommodation costs.
The club and the Italian manager both previously declined to comment on the veracity of claims he was paid on top of his salary as a consultant with Al Jazira Sports and Cultural Club, which is controlled by City’s Abu Dhabi owners.
Last year, as part of top tier negotiations to create a fairer new sponsorship system, Premier League clubs agreed that all teams should be obliged to declare to the league when any second owner-related deals are struck with players and managers.
3. Breaches of European and domestic Financial Fair Play rules
English clubs are duty-bound within the Premier League rules to comply with Uefa’s regulations. The Premier League has decided that City breached those European rules between 2013 and 2018.
A two-year European ban was previously quashed by the Court of Arbitration for Sport (Cas), but the judgement maintained the club should still be "severely reproached" for showing "blatant disregard" to Financial Fair Play investigators.
The Uefa charges were also "not frivolous”, Cas added, in a paper saying that there had been a “legitimate basis to prosecute” City for allegedly overstating sponsorship deals.
The Premier League are rallying behind Uefa in including this charge, while also accusing them of breaching its own profit and sustainability regulations between 2015-16 to 2017-18.
Among allegations covered by this section are player contract arrangements. Der Spiegel alleged that Abu Dhabi paid about £3.5 million to Yaya Touré’s agent between 2010 and 2016. These payments were said to have been cleared by the club’s chief executive, Ferran Soriano, and chairman Khaldoon Al Mubarak. Toure's agent, Dimitri Seluk, denies ever receiving secret payments.
4: Failing to cooperate with investigations
Since the Premier League launched its investigation four years and two months ago, City's legal team has used everything in its powers to get the case thrown out. The charges against City detail how "in respect of the period from Dec 2018 to date", the club breached rules "requiring a member club to cooperate with, and assist, the Premier League in its investigations, including by providing documents and information to the Premier League in the utmost good faith".
The Premier League and City have already been fighting it out in the Court of Appeal over how much evidence is handed over. After the investigation was launched, an arbitration tribunal ordered City to provide “certain documents and information . . . and to make inquiries of third parties”.
In July 2021 a Court of Appeal decision revealed that City had challenged the jurisdiction of an arbitration panel set up by the Premier League and had, unsuccessfully, challenged demands to hand over information.
An independent commission will now decide whether City's attempts to derail the inquiry amounted to obstruction.
Is the timing of this investigation significant?
Both City and Kieran Maguire, a lecturer in football finance at Liverpool University, say there was a clear political advantage for the Premier League to announce the conclusion of its investigation in the same week that the Government was due to announce its white paper on football regulation. Whitehall sources confirmed to Telegraph Sport that the paper is now due to be published in a fortnight or so. But it had been previously expected this week.
"The Premier League is putting this out as part of their attempt to ensure that an independent regulator doesn't go ahead," Maguire told Telegraph Sport. "But in my view, the opposite is true. The fact that it's taken them four years of investigation to make charges. That shows they don't have the capacity, they don't have the skills to regulate their own. And therefore it'd be better if there was an independent regulator."
Insiders at the club also feel it is part of a strategy by the Premier League to show they are capable of adequate governance. “This is tactical,” one source said. Eyebrows were also raised at City that the club were not given any prior notification of the charges. It is understood that Ferran Soriano, the City chief executive, was first informed of the news as it was about to go live on the Premier League’s website.
"Manchester City FC is surprised by the issuing of these alleged breaches of the Premier League Rules, particularly given the extensive engagement and vast amount of detailed materials that the EPL has been provided with," City said in a statement.
Those claims will be flatly rejected by executives at the Premier League's Paddington HQ. Sources close to the process point out that the charges levelled against City are an extensive piece of work. It is suggested the charges would have been published six months ago if the intent was to influence the government or see off a regulator.
Who will decide if City are guilty?
An independent panel assessing the Premier League's 115 charges against Manchester City will be selected by an Arsenal season-ticket holder. Murray Rosen KC, who is also a keen cricket fan and MCC member, was appointed as chair of the English top tier's first judicial panel in 2020. His role in the City case has yet to be confirmed but he will play a key role in the coming weeks in picking an independent commission.
A source insisted it has yet to be decided whether he could chair the panel but he is one of the country's leading figures in sports resolutions.
A 2019 profile of Rosen by the law firm Herbert Smith Freehills details how he is a regular on the terraces of the Emirates watching City's title rivals. "When not working on sports, culture and commercial disputes, he likes little more than to watch (he is an Arsenal season ticket holder) – and occasionally to participate, real tennis and table tennis being particular favourites," the article adds.
If City lose, will they appeal?
There is no mention of an appeal yet from City's lawyers as the club is still hoping to escape any serious punishments.
City previously fought their Champions League ban from Uefa via the Court of Arbitration for Sport (Cas) in Switzerland.
However, under Premier League rules, the club will not be able to appeal any sanction via Cas as the European court is not recognised by the clubs. Instead, the club would have to pursue options via London law courts.