Financial scandal at Manchester City: The big screw-up

Like a phoenix rising from the ashes – this is how Manchester City's rise after 2008 can be accurately described. There was a traditional elevator club in a city that was colored deep red by its big neighbor Manchester United. City was there, played along – but the big stage belonged to the others. That should change.

In September 2008, the Abu Dhabi United Group took over the club. Behind her is Sheikh Mansour bin Zayed Al Nahyan, member of the ruling family of Abu Dhabi and Vice President and Deputy Prime Minister of the United Arab Emirates. The goals were anything but modest: conquer Manchester, dominate England and ultimately reach the top level of world football.

Today, eight championships, four FA Cups and one Champions League title later, the Arabian fairytale castle built with billions is in danger of collapsing. And if the walls actually break, City could be buried deep under its own rubble. In the most extreme case, the crash could even lead to English amateur football.

What had happened? Last Friday, an independent commission of inquiry set up by the Premier League delivered a damning verdict: guilty on 114 of 115 charges. The main allegation is that Manchester City artificially inflated revenues and concealed costs between 2009 and 2018 in order to meet the Premier League's financial and disclosure obligations on paper.

The starting point was the so-called “Football Leaks”, which the news magazine Der Spiegel reported on from November 2018. The fairytale castle shone magnificently. But when it came to the foundation, the rules were apparently not taken very seriously. Specifically, it's a huge sum. According to the commission's partially redacted judgment published by the Premier League on Tuesday, officially reported sponsorship revenues actually concealed hidden payments totaling around £830.69 million.

There is talk of sham or concealment contracts. Former head coach Roberto Mancini, who coached the team from December 2009 to May 2013 and led the club to its first championship in 44 years in 2012, is said to have only received part of his salary from Manchester City. The other part is said to have been processed via Abu Dhabi.

In 2020, UEFA excluded the club from the competition for two years for violations of Financial Fair Play and fined it 30 million euros. City appealed. The international sports arbitration court CAS lifted the ban and reduced the fine to 10 million euros. He found most of Uefa's allegations to be insufficiently proven or to be time-barred because of the five-year time limit that applied at the time. The Skyblues got away with a sky blue eye.

There is no statute of limitations in the statutes of the top English league. The club still has until Friday to file an objection. Stefan Borson, lawyer and former financial advisor to Manchester City, assumes that “an appeal against the factual findings will most likely not be successful”. How severe the punishment will ultimately be is still completely open.

For Richard Masters, managing director of the Premier League, at least the significance of the case is clear: “This disciplinary procedure and this decision are the most important in the history of the Premier League.” In fact, there is a lot at stake. The eight titles City won in the nine affected seasons could be stripped. In addition, there are possible point deductions, severe fines and claims for damages from competing clubs. In the worst case scenario, there is even a risk of exclusion from the Premier League.

British football insider Ben Jacobs reports that the EFL, the umbrella organization for the second to fourth English leagues, might not be very receptive in the event of an exclusion and would be tempted to keep Manchester City out of their leagues. Theoretically, this would even mean a fall into amateur football.

However, before you see City kicking on any English village square, it remains to be seen how stable the Premier League actually remains. Because she is in an unpleasant dilemma. With Manchester City, they would lose one of their biggest drawcards and therefore a lot of money. On the other hand, there is something that is much harder to buy: their credibility.