Fanteractive.com :Fanteractive is the place where fans come to Fanteract! Fanteractive.com :Fanteractive is the place where fans come to Fanteract!

Background on the Issue

According to The Guardian, Manchester City FC could be banned from the Champions League as early as next season for violating UEFA’s Financial Fair Play regulations, a case which UEFA President Aleksander Ceferin labeled “concrete.” [1] Before inspecting the matter any further, here are some brief points to help understand Financial Fair Play (FFP):

  • What’s the point of FFP?

    • “Financial Fair Play is about improving the overall financial health of European club football.”[2]

    • FFP regulations aim to prevent professional football clubs from spending greater sums than they earn and, in doing so, causing themselves financial complications that might threaten their existence.

  • This doesn’t necessarily mean clubs aren’t allowed to have losses.

    • “To be exact, clubs can spend up to €5 million more than they earn per assessment period (three years). However it can exceed this level to a certain limit, if it is entirely covered by a direct contribution/payment from the club owner(s) or a related party. This prevents the build-up of unsustainable debt.”[2]

  • What are the repercussions of violating FFP, how are they determined, and by who?

    • “If a club is not in line with the regulations, it will be UEFA's Club Financial Control Body that decides on measures and sanctions.”[2]

    • UEFA’s “catalogue of measures” includes: (a) warning, (b) reprimand, (c) fine, (d) deduction of points, (e) withholding of revenues from a UEFA competition, (f) prohibition on registering new players in UEFA competitions, (g) restriction on the number of players that a club may register for participation in UEFA competitions, including a financial limit on the overall aggregate ost of the employee benefits expenses of players registered on the A-list for the purposes of UEFA club competitions, (h) disqualification from competitions in progress and/or exclusion from future competitions, (i) withdrawal of a title or award. [2]

This particular case came to light after Der Spiegel, a German magazine, published documents from Football Leaks alleging that Manchester City used sponsorship deals to bypass rules regarding investments from owners. One of the claims made against the club was “an apparent sponsorship deal by Etihad Airlines, worth £68m to the club, was in fact largely to be paid directly to City by the club’s owners, the Abu Dhabi United Group (ADUG).” [1] In addition, Manchester City allegedly formulated a “closed payment loop”, known internally as Project Longbow, in which ADUG paid a third party to pay City for the image rights of their players. Project Longbow “allegedly generated revenues of £11m a year for the club.” [1]

Legal Issue

While the aforementioned “rules regarding investments from owners”, which the club allegedly tried to circumvent, were not specified, the issue at hand appears to be Manchester City using incoming “sponsorship dollars” as proof to appear to be in compliance with FFP. As The Guardian’s Paul MacInnes wrote, the club’s owners allegedly used their own money to fund the aforementioned sponsorship deal and purchase the image rights of Manchester City's players. [1] So, the club’s significant spending in recent years was, allegedly, not actually counterbalanced by legitimate revenue but by ADUG’s funds. As mentioned above, the body of law that would apply to this case is UEFA's Club Financial Control Body and the club’s sanctions will be determined by them following an investigation.

Analysis

The football world's eyebrows were first raised when Manchester City was taken over in 2008. Since the takeover, the club has spent over £1.4 billion to acquire 74 players. [3] So, would it be surprising to come to learn that the club has not complied with FFP regulations? No. Though, if UEFA were to find corroborating evidence, this should raise questions regarding other big-time European clubs as well, if those questions aren't being asked already. 

Sources:

1) https://www.theguardian.com/football/2018/dec/04/manchester-city-may-face-champions-league-ban-uefa-ffp-investigation

2) https://www.uefa.com/community/news/newsid=2064391.html

3) https://www.verdict.co.uk/manchester-city-trophies-sheikh-mansour/

You may also Interest in...

Where do players in England's Premier League come from?   The Premier League is considered one of the top, if not THE top, league in the world. So it is only fitting that teams would draw players from all over the world. Overall t ... Read More
LONDON (AP) Manchester City won the Premier League title by a record 19 points, while Stoke, Swansea and West Bromwich were relegated. Here is a look at how all 20 teams fared in the 2017-18 season: Champions League qualification: 1. MANCHES ... Read More
One of the greatest parts of European soccer is the changing face of each league from one season to the next. Through other tournaments such as the Champions League and Europa League and relegation, teams are almost always playing for something regar ... Read More
The United Kingdom’s Daily Star is citing Spanish media reports that Real Madrid is exploring a transfer deal that would ship Welsh superstar Gareth Bale back to the Premier League with Manchester United as the likely destination. Bale playe ... Read More

Click Here for More Fanager Articles