Manchester City found guilty of financial breaches across nine Premier League seasons

Manchester City have been found guilty of breaching the Premier League’s financial rules across nine seasons, from 2009-10 to 2017-18, by an independent commission.

The club was also found to have committed three of four alleged breaches relating to its failure to co-operate with the Premier League’s investigation. The findings confirm reports published by British newspapers two days ago.

The Premier League said on Tuesday that the commission concluded Manchester City had entered into “sham” commercial agreements with several partners during the period under review. The arrangements allegedly did not reflect the true agreements between the parties and were designed to inflate the club’s reported revenue and reduce its costs.

The commission said the club submitted inaccurate financial accounts, concealed its true financial position from auditors and football regulators, and significantly breached spending limits imposed by the Premier League and UEFA.

£900m difference in reported finances

According to the commission, Manchester City used a number of sham sponsorship arrangements as part of an undisclosed funding structure.

The companies involved paid only part of the value of the sponsorship agreements, with the remainder funded by Abu Dhabi United Group for Investment and Development (ADUG), the club’s owner.

Other arrangements funded by ADUG allegedly enabled Manchester City to record lower operating expenses than it had actually incurred. The commission also described an agreement with Fordham as sham. Fordham bought the image rights of the club’s players, with that arrangement also funded by ADUG.

The commission concluded that the purpose of these arrangements was to increase Manchester City’s reported revenue and reduce its costs by more than £900m during the relevant period, allowing the club to appear compliant with financial regulations.

It said the accounts did not present a true picture of the club’s income and expenditure and that Manchester City had concealed its actual financial position from auditors and regulators. The commission said the club’s conduct clearly demonstrated an “intention to circumvent the Premier League’s rules”.

The commission also found that Manchester City had failed to report its revenue and expenses accurately under the Premier League’s profitability and sustainability rules, as well as UEFA’s club licensing and financial fair play regulations.

Had the relevant agreements been recorded accurately in the club’s accounts, Manchester City would have exceeded the Premier League and UEFA spending limits by a significant margin, according to the decision.

Investigation co-operation breaches

The alleged breaches were not limited to the financial period under examination. The commission found that Manchester City had also breached its obligations to co-operate and act in good faith during the Premier League investigation, which lasted four years.

It concluded that the club had made “concerted efforts to stop and frustrate the Premier League’s investigation”, with three of the four charges in that area proven.

Premier League chief executive Richard Masters called the case and the decision “the most important in the history of the Premier League”.

“The main decision establishes the facts about what happened at Manchester City during this period and shows how the club systematically breached the league’s rules for almost a decade,” he said.

Masters added that the decision justified the Premier League’s decision to pursue the case and said the process of enforcing rules agreed by the clubs was essential to protecting the integrity of the competition.

The commission has not yet decided Manchester City’s punishment. That issue will be considered at a separate confidential hearing, with the outcome published when permitted by the Premier League’s rules.

Manchester City have the right to appeal, with Friday 2 October set as the deadline. The Premier League has published a redacted version of the commission’s main decision and said further appendices would be released as soon as the process allows.