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The Premier League announced Tuesday that a three-year review by an independent commission found Manchester City “guilty of all charges related to serious breaches of the Premier League’s financial rules,” saying the club created “sham” agreements with sponsors, artificially inflated revenues by more than 900 million pounds over a nine-season period, and failed to cooperate with the league investigation.
The league announcement said City created “sham” agreements with sponsors as part of a “disguised funding scheme” where those companies would pay only a portion of the money, while the rest came from the club’s ownership, Abu Dhabi United Group.
The independent commission found the actions artificially increased revenues and reduced costs “by more than £900 million” from 2009 through 2018, leading the club to file accounts that misled auditors and soccer bodies.
The inflated deals allowed them to report higher revenues and therefore spend more money on players, and the players they signed turned City into the dominant club of the decade in question.
“The Commission concluded that ‘by its conduct the club clearly intended to circumvent the PL Rules,’” the league announcement said.
The club said in a statement Tuesday that it is “disappointed and surprised” by the announcement, saying it is “innocent of the accusations made” and has a “comprehensive body of irrefutable evidence” that proves its innocence.
What led to this decision?
Under the ownership of the United Arab Emirates–backed Abu Dhabi United Group, which bought the club in 2008, Manchester City has risen from a struggling side in the shadow of neighbor Manchester United to a dominant force in English and European soccer. Since 2008, the team has won eight Premier League titles, four FA Cups, and one Champions League trophy.
In 2018, German newspaper Der Spiegel published internal financial documents obtained by a hacker that appeared to show the club evading financial fair play rules, including by the ownership fronting a large portion of a sponsorship deal from Etihad. The Premier League spent four years investigating the case, resulting in 115 charges against the club, and sent the issue to the independent commission.
The Athletic first reported on Friday that City had been found guilty of all but one of the 115 charges against it. City put out a statement saying “significant elements” of the process were unfinished. Earlier Tuesday, ESPN reported that City knew about the guilty verdict this summer.
What did the commission find?
The independent commission found Manchester City “significantly” broke both Premier League and UEFA spending rules, hiding the “true state of its finances.” The commission said if its finances had been reported honestly, the club would’ve been out of line with Premier League and UEFA rules “by a very substantial amount.”
The commission also found City “made concerted efforts to stop and frustrate the PL investigation.” The commission’s report published alongside the Premier League announcement said “a number of important factual witnesses” provided false evidence, including some “that they knew to be untrue.”
The commission let Manchester City off on one of the 115 charges, one of four pertaining to failing to cooperate in the investigation.
On Tuesday, the hacker who published the leaks that ended up in Der Spiegel, Rui Pinto, wrote on social media that the independent commission’s decision “ultimately confirms, unequivocally,” what he first leaked. “Years and years of cheating, lying and manipulation will finally have consequences,” he said.
Now what?
The ruling has potentially gargantuan consequences for Manchester City, English soccer, and European competition.
All within the past three years, Everton and Nottingham Forest were docked eight and four points, respectively, because of financial breaches. But their verdicts both pale in comparison to Manchester City’s, suggesting the club could face a punishment that leads to at least a year outside of the Premier League. The fallout from that would be enormous, with City’s current stars likely headed to other teams, and the club locked out of the Champions League for at least two years.
“Manchester City FC will now pursue the appeal avenues open to it, on the basis that the opinion contains clear material errors, of law, principle and fact, and is unsafe,” the club said in a statement Tuesday. The club said it will be “relentless, and where necessary proactive, in any and all appropriate regulatory and legal forums.”
The club has until Friday to submit its appeal, which would then go to a three-person appeal board.
In a statement, league CEO Richard Masters called the case and decision “the most significant in Premier League history.” While he said City’s punishments are yet to be decided, the Premier League is “committed to moving swiftly through the remainder of the process, to provide certainty for the League, our clubs and fans.”
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