Manchester City have been found guilty of all 114 financial charges brought against them by the Premier League, following the conclusion of an independent commission's hearing. The verdict, confirmed in a Premier League statement, found that the club arranged 'sham' contracts with sponsors to artificially inflate revenues and reduce costs by more than £900 million over a nine-season period.
The commission's findings, which emerged after Friday's leak of the hearing outcome, paint a bleak picture for the club. In addition to the 'sham' contracts, the commission found that City filed misstated accounts, concealed the true state of its finances from auditors and football regulators, and was significantly in breach of both Premier League and UEFA spending limits. The club also committed multiple breaches of its duties of co-operation and utmost good faith during the Premier League's investigation.
Potential punishments for Manchester City
A fine, transfer embargo, points deduction and Premier League expulsion are all possible sanctions for Manchester City. While expulsion is a punishment many will demand, it does not appear possible as the EFL is separate from the Premier League and therefore does not have to accept City. A points deduction large enough to relegate City at the end of a season appears more likely.
The Premier League and EFL have previously worked together to impose a sanction on Leicester City while they were in the Championship for breaking Premier League profit and sustainability rules. This precedent suggests a points deduction could carry across a number of seasons, or straight relegation to League Two could be imposed. Given the number of charges and the money involved in this unprecedented case, the Premier League, which has the power to make recommendations to the independent panel regarding sanctions, will likely push for the strongest possible punishment.
Official statements and verdicts
Statements have been issued by a Manchester City spokesperson, club chairman Khaldoon Al Mubarak, CEO Ferran Soriano, the Premier League and Premier League CEO Richard Masters. Damning verdicts have also come from Culture Secretary Lisa Nandy and football finance expert Kieran Maguire.
In the first official response, a City spokesperson said: "The Premier League process remains ongoing, with significant elements to be completed, and subject to strict confidentiality. As such Manchester City FC’s position remains consistent with the Club’s statement of February 2023. The Club has diligently respected due process for eight years on the basis that the Premier League Board and Executive would behave as an independent, impartial and fair-minded regulator, free from partisan influence."
Club chairman Khaldoon Al Mubarak insisted "the process still has a long way to run" and that "nothing has changed" despite the "noise swirling around us". He wrote: "Following Friday’s media reporting, many of you will have spent your evening answering questions and responding to messages from friends, family and colleagues. So have I. Here’s what I said to my family: The Premier League process still has a long way to run, and our confidence and intent in proving the Club’s innocence is just as strong as when this began."
The Premier League confirmed the guilty verdict on Tuesday evening, with the one breach out of 115 not proven relating to City's co-operation with the investigation. The statement detailed that the commission found the club arranged 'sham' contracts with commercial partners, filed misstated accounts, and concealed the true state of its finances. The purpose of these schemes was to artificially inflate revenues and reduce costs by more than £900 million during the affected period.
Premier League CEO Richard Masters said: "The core decision establishes the facts of what happened at Manchester City during this period. It details how the club systematically broke Premier League Rules for nearly a decade. It also vindicates the Premier League’s decision to pursue this case against Manchester City. While the process to date has been both long and difficult, the League has remained determined that the facts be established independently."
City remained defiant in their response, stating: "Manchester City FC is both disappointed and surprised by the opinion of the Premier League Commission, that has been published today. The Club is innocent of the accusations made by the Premier League and a comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case. The Club will therefore be relentless, and where necessary proactive, in any and all appropriate regulatory and legal forums."
CEO Ferran Soriano issued a video message to supporters, claiming there is a "Premier League conspiracy theory" against the club. He said: "Irrefutable evidence has been provided to the Premier League commission that shows that it could not happen and that it did not happen. This includes bank statements, money transfers, witnesses and everything necessary to categorically demonstrate that the money did not come from the owner. Every other false charge that has been thrown at us - and aggressively marketed and promoted - comes from the simple, central, and completely false accusation."
Culture Secretary Lisa Nandy told Channel 5 news: "I don’t want to pre-empt any kind of appeal process, and they are entitled to a fair hearing. But what I would say is that the ultimate sanction is very serious indeed. I mean, a club can be expelled from the Premier League if these sorts of allegations are upheld, with obviously huge repercussions for everybody."
Football finance expert Kieran Maguire, speaking on BBC Radio 5 Live, said: "If you Google what the word ‘sham’ means, I’m getting the words ‘fake, false, fraud’. It’s very, very significant. I think the quantum of money involved – £900million over a nine-year period – is a staggering misstatement, and it looks like it’s been a corroborative fraud. The fact that the auditors were unaware of it, there must be collusion at the club. I think it’s gone far beyond the worst-case scenario that anybody initially envisaged."
What happens next
Appealing against the 114 charges is the obvious next step from a City perspective. Soriano confirmed they would be doing so in his statement, and the Premier League made it clear they have until October 2 to file that appeal. The appeal hearing is expected to take place over the coming weeks, with the process permitted under section W of the Premier League rules, and will involve a new three-person commission separate from the panel that heard the initial case.
At the same time, the hearing over what sanctions may be imposed on City is also set to occur. That can take place before the appeal process is complete, which suggests it will also be taking place in the coming weeks. For City as a football club, their focus will be on the Premier League clash away to Liverpool in just over 10 days, with it business as usual as far as they are concerned, judging by statements from the hierarchy and their continued light-hearted social media posts.
