Manchester City found guilty of financial rule breaches after ‘sham’ contracts, Premier League says

Manchester City used “sham” commercial contracts to inflate revenue and reduce costs by more than £900m over almost a decade, according to the Premier League after an independent commission found the club guilty of serious financial breaches.

The commission ruled that City had broken all the league’s financial rules charges covering nine seasons, from 2009-10 to 2017-18, and three of four charges relating to their failure to co-operate with the investigation.

City deny wrongdoing and said they would appeal, arguing the ruling contained “clear material errors, of law, principle and fact, and is unsafe”. The club has until Friday to lodge its appeal.

No punishment has yet been announced. Any major sanction could affect previous and future title races, European qualification and the distribution of tens of millions of pounds in prize money. The case has also intensified debate about financial governance, sporting integrity and the Premier League’s ability to regulate its most powerful clubs.

The commission found that City misrepresented agreements with several commercial partners. Some sponsors paid only part of the fees recorded in contracts, while the balance was provided by the club’s owner, Abu Dhabi United Group Investment & Development Ltd (ADUG).

It also identified ADUG-funded arrangements that allowed City to record lower operating expenses. The Premier League said the arrangements artificially increased revenue and reduced costs, creating the appearance that the club was complying with financial regulations.

The commission further found that several City witnesses gave false evidence during a 42-day hearing, with some knowingly misleading the panel. It concluded that, had the agreements been accurately reported, City would have breached both Premier League and Uefa spending limits “by a very substantial amount”.

Richard Masters, chief executive of the Premier League, called the decision “the most significant in Premier League history”.

“The core decision… details how the club systematically broke Premier League Rules for nearly a decade,” he said.

Masters said the sanction remained the most important unresolved issue. “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,” he added.

City said it was “disappointed and surprised” by the opinion, insisting that “a comprehensive body of irrefutable evidence exists in support of all of its positions”.

Chief executive Ferran Soriano told staff in a video that the case was based on the league’s “conspiracy theory” that ADUG money had secretly entered the club through Abu Dhabi sponsors.

“This is just not true,” he said. “Irrefutable evidence has been provided to the Premier League commission that shows it could not happen and that it did not happen.”

The ruling was announced near the close of the European Football Clubs general assembly in Copenhagen. Representatives of Arsenal, Nottingham Forest and Manchester United declined to comment.

EFC chair Nasser Al-Khelaifi reserved judgment but praised Soriano’s contribution to the organisation. Sports minister Lisa Nandy called the report “incredibly stark” and urged a swift and fair conclusion.

Sports lawyer Yasin Patel expects City to fight “with all their legal might”. “Round one was to the Premier League, let round two begin,” he said.