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Manchester City’s belligerent approach to FFP smacks of extreme arrogance. They deserve to be punished
By Oliver Kay Feb 15, 2020
The official line is that Manchester City are “disappointed but not surprised”. It is one that reinforces that idea of a stitch-up, a “prejudicial process” at the hands of a kangaroo court, because City still insist that the evidence in their favour is “irrefutable”.
It would be nice for City to share that evidence one day because for now the case against them looks damning. It is why, nearly six years after negotiating and accepting a £49 million fine (two-thirds of which suspended and later refunded) for alleged breaches of UEFA’s Financial Fair Play (FFP) regulations, we were informed on Friday night that they faced another £25 million fine and, more dramatically, a two-year ban from the Champions League and Europa League.
Of course, City will appeal to the Court of Arbitration for Sport (CAS) but, for all the bullishness among the club’s hierarchy, UEFA’s announcement last night was an almighty blow to the Premier League champions’ ambitions and indeed to their reputation. Anything less than an overwhelming victory on appeal — a full acquittal, with all sanctions quashed — would be insufficient for a club that has consistently and vehemently protested its innocence.
City stand accused not only of exceeding the maximum losses allowed under UEFA’s FFP regulations but of trying to beat the system by “overstating” sponsorship revenue and, according to UEFA’s adjudicatory chamber, failing to co-operate in the investigation of their case.
The case against City was blown open again in November 2018 when the German newspaper Der Spiegel revealed what it called the Football Leaks files, based on e-mails accessed by an individual since identified as Rui Pinto, a Portuguese national who has been charged with 147 criminal offences including computer hacking, all of which he denies.
City have consistently called those leaks an “organised and clear” attempt to damage the club’s reputation, referring to “out-of-context materials purportedly hacked or stolen from City Football Group and Manchester City personnel and associated people”. The Football Leaks process seemed indiscriminate, though; whether it was shedding light on the finer points of transfer deals and players’ contracts, illegal third-party agreements or secret talks about the possible creation of a breakaway league by leading European clubs. An early mission statement said simply: “This project aims to show the hidden side of football. Unfortunately, the sport we love so much is rotten and it is time to say ‘enough’.”
City would have us believe that their ownership by Sheikh Mansour is an antidote to such rottenness — a pure personal investment by an individual who loves his adopted club and city so much that he paid it a visit in August 2010 — rather than, say, yet another prime example of “sportswashing”, a phenomenon whereby regimes use association with sport in order to launder their image. Put simply, City are to Abu Dhabi what Paris Saint-Germain are to Qatar: a vehicle that has opened up more and more investment opportunities for regimes seeking to diversify their economy, improve their image and expand their global influence. Football clubs, like financial institutions and famous buildings, always seem to be available to the highest bidder.
Petrodollar states are allowed to bankroll football clubs as long as they stay within the rules. And here we come to the subject that attracts furious indignation from some of City’s supporters. For decades, clubs were allowed to spend as much money as they liked. It was not until 2008, the same year their club was bought by the Abu Dhabi United Group, that UEFA decided it was time to regulate spending.
In fact — and this is where City do have a legitimate grievance — FFP was not originally meant to be about controlling expenditure. When the former UEFA president Michel Platini first outlined his determination to clamp down on financial excesses within European football, his target was debt. On the eve of the 2008 Champions League final between Manchester United and Chelsea, Platini complained that this “unsustainable level of debt (…) is distorting the level playing field in Europe”.
David Taylor, then UEFA’s general secretary, cited “a problem with clubs that secure debt (…) in order to compete at a higher level than their resources would allow”. That was not true of Manchester United, whose debt remains a burden to the club, entirely for the benefit of the Glazer family, but it was certainly true of Chelsea, beneficiaries of a £578 million interest-free loan from Roman Abramovich (which he later wrote off).
By the time FFP was introduced three years later, though, United, Real Madrid, Bayern Munich and the rest of the establishment clubs, several of them heavily indebted, had used their influence to persuade UEFA to change focus. It was not, in the end, a clampdown on debt; there was nothing to prevent leveraged buy-outs like the Glazers’ — instead, it was all about sustainability. The financial stability it has brought to European football, relatively speaking, is to be welcomed, but it has also served to reinforce the hierarchies that have built up over the course of the Champions League era.
City, PSG and others are entitled to complain that it left them with precious little time to move towards sustainability between the new regulations and the sanctions starting to bite. City are certainly entitled to argue that their case seems to have been handled less sympathetically than that involving PSG, whose president Nasser al-Khelafi sits on UEFA’s executive committee and has a prominent role at beIN Media Group, which is one of UEFA’s major broadcast partners. City’s own attempts to gain influence in UEFA’s corridors of power have so far been rebuffed.
What City are not entitled to do, though, having signed up to the regulations that allow them a licence to compete in the Champions League, is to try to ride roughshod over the regulations and then expect to avoid punishment.
There is a passage in Der Spiegel’s Football Leaks coverage — the contents of which has never been disputed by City, even if they continue to complain about the context in which things have been presented — that appeared to sum it all up.
The allegation goes that when compiling City’s accounts for 2012-13, the club’s chief financial officer Jorge Chumillas wrote an internal e-mail stating that, due to the cost of sacking Roberto Mancini, “we will have a shortfall of £9.9 million in order to comply with UEFA FFP this season”. Ferran Soriano, the chief executive, is alleged to have replied that this problem could be overcome if City could be paid the contractually stated bonus from their sponsors for winning the FA Cup.
There was just one problem with this. City had lost the FA Cup final to Wigan Athletic.
According to Der Spiegel, a compromise was reached whereby various sponsors — the Abu Dhabi airline Etihad, the Abu Dhabi-based fund Aabar Investments and the Abu Dhabi department for culture and tourism — would have their payments adjusted so that the shortfall was covered. When Chumillas asked whether they would be allowed to change the date of sponsorship payments, Simon Pearce, a board member of City Football Group and a special adviser to the club’s chairman Khaldoon al-Mubarak, is alleged to have replied, “Of course. We can do what we want.”
That line appears to sum up the City hierarchy’s approach to the whole FFP question. It has not exactly served them well to this point. There is much to be admired about the work City have done over the past decade — their investment in infrastructure and in high-calibre people at all levels of the club, the development of a strategy and a philosophy summed up by the excellence of Pep Guardiola and his squad over the past two seasons, their commitment to community projects in Manchester — but the hierarchy’s belligerent approach to the FFP challenge smacks of extreme arrogance. What is more, it threatens to undermine so much of that good work, particularly if a Champions League ban causes Guardiola and his players to question their futures at the club.
In fact, it is worth recalling what Guardiola said last March after UEFA reopened their investigation in light of Der Spiegel’s allegations. Of the City hierarchy, he said, “I work with them and have known them for a long time. I trust them a lot. After that we’ll see.” Of the prospect of UEFA’s investigation he said, “If (the outcome) is not good, then ok, we will accept it. If everything is right, then it will finish and we will move forward.”
Football was never meant to come down to accountancy, hacked e-mails and legal representation behind closed doors in Switzerland. Then again it was never intended to come down to a battle between petrodollar states, Russian oligarchs and American real estate investors.
In Platini’s eyes, FFP was going to be all about reducing those influences, bringing the game down to a pure level. It has done nothing of the sort — if anything, European football has become even less of a level playing field than it was before — but the rules are the rules and if you sign up to play in the competition, you have to go along with them. If City have treated those rules and the entire process with total contempt, then they deserve to be punished accordingly.
By Oliver Kay Feb 15, 2020
The official line is that Manchester City are “disappointed but not surprised”. It is one that reinforces that idea of a stitch-up, a “prejudicial process” at the hands of a kangaroo court, because City still insist that the evidence in their favour is “irrefutable”.
It would be nice for City to share that evidence one day because for now the case against them looks damning. It is why, nearly six years after negotiating and accepting a £49 million fine (two-thirds of which suspended and later refunded) for alleged breaches of UEFA’s Financial Fair Play (FFP) regulations, we were informed on Friday night that they faced another £25 million fine and, more dramatically, a two-year ban from the Champions League and Europa League.
Of course, City will appeal to the Court of Arbitration for Sport (CAS) but, for all the bullishness among the club’s hierarchy, UEFA’s announcement last night was an almighty blow to the Premier League champions’ ambitions and indeed to their reputation. Anything less than an overwhelming victory on appeal — a full acquittal, with all sanctions quashed — would be insufficient for a club that has consistently and vehemently protested its innocence.
City stand accused not only of exceeding the maximum losses allowed under UEFA’s FFP regulations but of trying to beat the system by “overstating” sponsorship revenue and, according to UEFA’s adjudicatory chamber, failing to co-operate in the investigation of their case.
The case against City was blown open again in November 2018 when the German newspaper Der Spiegel revealed what it called the Football Leaks files, based on e-mails accessed by an individual since identified as Rui Pinto, a Portuguese national who has been charged with 147 criminal offences including computer hacking, all of which he denies.
City have consistently called those leaks an “organised and clear” attempt to damage the club’s reputation, referring to “out-of-context materials purportedly hacked or stolen from City Football Group and Manchester City personnel and associated people”. The Football Leaks process seemed indiscriminate, though; whether it was shedding light on the finer points of transfer deals and players’ contracts, illegal third-party agreements or secret talks about the possible creation of a breakaway league by leading European clubs. An early mission statement said simply: “This project aims to show the hidden side of football. Unfortunately, the sport we love so much is rotten and it is time to say ‘enough’.”
City would have us believe that their ownership by Sheikh Mansour is an antidote to such rottenness — a pure personal investment by an individual who loves his adopted club and city so much that he paid it a visit in August 2010 — rather than, say, yet another prime example of “sportswashing”, a phenomenon whereby regimes use association with sport in order to launder their image. Put simply, City are to Abu Dhabi what Paris Saint-Germain are to Qatar: a vehicle that has opened up more and more investment opportunities for regimes seeking to diversify their economy, improve their image and expand their global influence. Football clubs, like financial institutions and famous buildings, always seem to be available to the highest bidder.
Petrodollar states are allowed to bankroll football clubs as long as they stay within the rules. And here we come to the subject that attracts furious indignation from some of City’s supporters. For decades, clubs were allowed to spend as much money as they liked. It was not until 2008, the same year their club was bought by the Abu Dhabi United Group, that UEFA decided it was time to regulate spending.
In fact — and this is where City do have a legitimate grievance — FFP was not originally meant to be about controlling expenditure. When the former UEFA president Michel Platini first outlined his determination to clamp down on financial excesses within European football, his target was debt. On the eve of the 2008 Champions League final between Manchester United and Chelsea, Platini complained that this “unsustainable level of debt (…) is distorting the level playing field in Europe”.
David Taylor, then UEFA’s general secretary, cited “a problem with clubs that secure debt (…) in order to compete at a higher level than their resources would allow”. That was not true of Manchester United, whose debt remains a burden to the club, entirely for the benefit of the Glazer family, but it was certainly true of Chelsea, beneficiaries of a £578 million interest-free loan from Roman Abramovich (which he later wrote off).
By the time FFP was introduced three years later, though, United, Real Madrid, Bayern Munich and the rest of the establishment clubs, several of them heavily indebted, had used their influence to persuade UEFA to change focus. It was not, in the end, a clampdown on debt; there was nothing to prevent leveraged buy-outs like the Glazers’ — instead, it was all about sustainability. The financial stability it has brought to European football, relatively speaking, is to be welcomed, but it has also served to reinforce the hierarchies that have built up over the course of the Champions League era.
City, PSG and others are entitled to complain that it left them with precious little time to move towards sustainability between the new regulations and the sanctions starting to bite. City are certainly entitled to argue that their case seems to have been handled less sympathetically than that involving PSG, whose president Nasser al-Khelafi sits on UEFA’s executive committee and has a prominent role at beIN Media Group, which is one of UEFA’s major broadcast partners. City’s own attempts to gain influence in UEFA’s corridors of power have so far been rebuffed.
What City are not entitled to do, though, having signed up to the regulations that allow them a licence to compete in the Champions League, is to try to ride roughshod over the regulations and then expect to avoid punishment.
There is a passage in Der Spiegel’s Football Leaks coverage — the contents of which has never been disputed by City, even if they continue to complain about the context in which things have been presented — that appeared to sum it all up.
The allegation goes that when compiling City’s accounts for 2012-13, the club’s chief financial officer Jorge Chumillas wrote an internal e-mail stating that, due to the cost of sacking Roberto Mancini, “we will have a shortfall of £9.9 million in order to comply with UEFA FFP this season”. Ferran Soriano, the chief executive, is alleged to have replied that this problem could be overcome if City could be paid the contractually stated bonus from their sponsors for winning the FA Cup.
There was just one problem with this. City had lost the FA Cup final to Wigan Athletic.
According to Der Spiegel, a compromise was reached whereby various sponsors — the Abu Dhabi airline Etihad, the Abu Dhabi-based fund Aabar Investments and the Abu Dhabi department for culture and tourism — would have their payments adjusted so that the shortfall was covered. When Chumillas asked whether they would be allowed to change the date of sponsorship payments, Simon Pearce, a board member of City Football Group and a special adviser to the club’s chairman Khaldoon al-Mubarak, is alleged to have replied, “Of course. We can do what we want.”
That line appears to sum up the City hierarchy’s approach to the whole FFP question. It has not exactly served them well to this point. There is much to be admired about the work City have done over the past decade — their investment in infrastructure and in high-calibre people at all levels of the club, the development of a strategy and a philosophy summed up by the excellence of Pep Guardiola and his squad over the past two seasons, their commitment to community projects in Manchester — but the hierarchy’s belligerent approach to the FFP challenge smacks of extreme arrogance. What is more, it threatens to undermine so much of that good work, particularly if a Champions League ban causes Guardiola and his players to question their futures at the club.
In fact, it is worth recalling what Guardiola said last March after UEFA reopened their investigation in light of Der Spiegel’s allegations. Of the City hierarchy, he said, “I work with them and have known them for a long time. I trust them a lot. After that we’ll see.” Of the prospect of UEFA’s investigation he said, “If (the outcome) is not good, then ok, we will accept it. If everything is right, then it will finish and we will move forward.”
Football was never meant to come down to accountancy, hacked e-mails and legal representation behind closed doors in Switzerland. Then again it was never intended to come down to a battle between petrodollar states, Russian oligarchs and American real estate investors.
In Platini’s eyes, FFP was going to be all about reducing those influences, bringing the game down to a pure level. It has done nothing of the sort — if anything, European football has become even less of a level playing field than it was before — but the rules are the rules and if you sign up to play in the competition, you have to go along with them. If City have treated those rules and the entire process with total contempt, then they deserve to be punished accordingly.
