The Premier League has confirmed that an independent Commission has found Manchester City FC guilty of all charges related to serious breaches of the League's financial rules over a nine-season period, as well as the majority of charges concerning its failure to co-operate with the investigation.
Sham Contracts and Inflated Revenues
Between Seasons 2009/10 and 2017/18, the Commission found that Manchester City arranged 'sham' contracts with a number of its commercial partners, artificially inflating the club's revenues and reducing its costs. The club also filed misstated accounts and concealed the true state of its finances from auditors and football regulators.
Manchester City was found to have been significantly in breach of both the Premier League's and UEFA's spending limits. During the League's investigation, the club committed multiple breaches of its duties of co-operation and utmost good faith, with three of the four alleged breaches upheld.
Disguised Funding Scheme
The Commission found that 'sham' commercial deals with sponsors were part of a disguised funding scheme, where companies paid only a portion of sponsorship fees, with the remainder funded by Abu Dhabi United Group Investment & Development Ltd (ADUG), which owned the club. Further 'sham' arrangements, funded by ADUG, allowed the club to record lower operating expenses, and a 'sham' circular arrangement with Fordham, an entity that purchased the club's players' image rights, was also funded by ADUG.
The purpose of these schemes was to artificially inflate revenues and reduce costs by more than £900 million during the affected period. The Commission concluded that 'by its conduct the club clearly intended to circumvent the PL Rules'. Had all agreements been reported accurately, the club would have been in breach of both the League's and UEFA's spending limits by a very substantial amount. The Commission also concluded that the club had 'made concerted efforts to stop and frustrate the PL investigation'.
Premier League Response
Richard Masters, Chief Executive of the Premier League, 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.
“It is a key responsibility of the Premier League to ensure that the Rules, approved by the clubs themselves, are upheld to protect the integrity of the competition. It is paramount that the League remains competitive and fair for all clubs and for the fans. We take that role extremely seriously.
“This disciplinary case, and this decision, are the most significant in Premier League history. There are elements of the case that remain to be decided, including, importantly, what sanction must follow for these breaches. Now we have the Commission's decision, we are committed to moving swiftly through the remainder of the process, to provide certainty for the League, our clubs and fans.”
Next Steps and Appeal
The Commission's findings are set out in a Core Decision, of which a redacted version has been published. The issue of sanction will be addressed separately in a further hearing with the independent Commission, which will remain private and confidential until publication of the outcome is permitted.
Manchester City has the right to appeal the findings and has until Friday 2 October to exercise that right. The Premier League Board's intention is that the full process, including any appeals and publication of relevant decisions, is concluded as soon as possible.
