Financial Fair Play rules (FFP) have been an imperative cog in the footballing governance machine for almost two decades, not only serving as a regulatory tool to the immense spending power of gargantuan clubs, but to first and foremost protect grass roots football against a backdrop of ever increasing insolvency.
Following a disappointing loss to Tottenham Hotspur on Sunday afternoon, which has kept Mikel Arteta's Arsenal 5 points clear at the top of the Premier League, Manchester City have today awoken to a fresh nightmare, in the form of raft charges brought against it by the Premier League. These are said to include more than one hundred breaches of financial rules, following a four-year investigation.
The charges include alleged breaches for failing to provide "accurate financial information that gives a true and fair value of the club's financial position", which included various monetary injections, including revenue from sponsorship, match day income, club licensing, player & staff salaries and operating costs.
This is not the first time that the club has been a recipient to charges and possible sanctions, having been subjected to a two-year ban by UEFA (the European football governing body) in 2020. However, Manchester City successfully appealed the ruling, which was overturned by the Court of Arbitration for Sport (CAS). It is worth noting that the initial sanctions imposed a fine of £25 million, which was later reduced to £9 million by CAS. Importantly, a number of the most significant allegations made were said by CAS to have fallen outside the relevant limitation period, rendering them unactionable. However, according to the Premier League rules, there is no time bar for retrospective action in this instance.
The latest crackdown from the Premier League seems to revisit some of this ground by reference to its own rules, including alleged breaches over a similar period to those relied upon by UEFA, being between 2013 and 2014, as well as 2017 to 2018. But they also appear to include fresh charges for breaches of Premier League rules on profitability and sustainability. The latter bulk of these charges span the 2015-2016 & 2017-2018 seasons.
The club has always denied any wrongdoing and its response to the charges has been one of co-operation, albeit expressing surprise at this latest development and referencing "the comprehensive body of irrefutable evidence that exists in support of its position".
Various media outlets have suggested that the club could be docked points from the current Premier League season. In reality, any sanction will only be applied in the season during which a final determination is made and this is unlikely to happen any time soon. However and worryingly for Manchester City, commentators have referenced the possibility of expulsion from the league itself, as well as the possibility of an automatic relegation to the lower tiers of English football. Whilst this appears alarmist, it is worth noting that a former financial advisor to the club, Stefan Borson, has gone as far as to indicate that the punishment for the breaches must lead to relegation, if indeed the charges are upheld.
The details of the breaches were published in a statement by the Premier League, highlighting that the charges were being brought in accordance with Premier League Rule W.82.1. It went on to confirm that it has today referred a number of alleged breaches of the Premier League Rules by Manchester City Football club to a Commission under Premier League Rule W.3.4.
The investigation by the Independent Commissions is expected to be reasonably lengthy, given the number of charges across the last 13 years. The Premier League have elaborated on the proposed methodology and process for dealing with the next steps of this matter, stating the following:
"Commissions are independent of the Premier League and member clubs. The members of the Commission will be appointed by the independent Chair of the Premier League Judicial Panel, in accordance with Premier League Rules W.19, W.20 and W.26".
"The proceedings before the Commission will, in accordance with Premier League Rule W.82, be confidential and heard in private. Under Premier League Rule W.82.2, the Commission’s final award will be published on the Premier League’s website".
"This confirmation is made in accordance with Premier League Rule W.82.1. The Premier League will be making no further comment in respect of this matter until further notice."
It is reasonable to assume that news of these charges will create an increasingly hostile and volatile space for the club, both online and in its travels to opposing Premier League grounds. It will be fascinating to see how it responds both on and off the pitch. Meanwhile arguments around the application (or failure to apply) Financial Fair Play Regulations by the relevant governing bodies are bound to persist.
Watch this space for an upcoming in-depth look at the FFP rules and the increasingly contentious accounting methods utilised by a variety of Premier League clubs.
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