Well, as most soccer fans will know, Manchester City has been banned from the Champions League, and the Europa league for that matter, for the next 2 years, after ‘Serious breaches’ of the Financial Fair Play (FFP) rules during the period between 2012 and 2016.
What they have been charged for is for overstating their sponsorship revenue during this period, through their owners stating sponsorship from their primary sponsor, Etihad Airways, who the owners of Man City also own. UEFA had emails, obtained by a German newspaper, noting that whilst sponsor was listed as 67.5mil pounds, however a large part of this (59mil) was filtered back to the Airways/family rather than remain in the football club. They also were found to have overstated income by around 30mil pounds was filtered through a shell company which was supposed to buy the rights of the players images in marketing campaigns.
Now, what is FFP you may ask? Put it simply, a club can’t spend more than what it earns, and must balance its books over a 3-year period. In terms of revenue, only a club’s outgoings in transfers, employee benefits (including wages), finance costs and dividends will be considered over income from matchday sales, TV revenue, advertising, finance, player sales and prize money. Funds spent on infrastructure, training facilities or youth training will not be included.
Manchester City have already appealed, as expected, taking the appeal to the Arbitration of Sport to have this overturned. They will be seriously hoping they are successful as it’s a huge financial penalty for City, which were also fined around 30mil pounds on top of the ban, as the Champions league can net the winner around 60mil pounds in revenue if you win the competition. Just being in the competition is hugely lucrative for clubs, and big name players expect to play in it year on year, so City being booted out will have major implications in their ability to both attract new players and retain their existing top stars, not to mention their coach Pep Guardiola who is unlikely to hang around if he’s unable to play champions league.
Manchester City, who were largely uncompetitive prior to the Sheikh Mansour Bin Zayed Al Nahyan, who’s a deputy prime minister of the UAE, and a member of Abu Dhabi’s royal family, have won the premier league 4 times since 2012. However, they have yet to win the Champions league, an award they crave to win, hence the recruitment of Pep Guardiola as their manager to get them that trophy.
It will be interesting to see how this plays out over the next 3-4 months before the transfer window opens as key players will be monitoring this situation, as will their managers and the major clubs around Europe. Of course, the players could simply be happy to sit back and wait out the 2yrs, earning their decent salaries and look at this as a chance to reduce their workload and travel over a 2yr period, potentially extending their careers, whilst probably increasing their chances of premier league glory, not having any European competition to worry about. But players are funny creatures, and want to be tested at all times, so as a club with limited history, Man City could have a hard sell to retain their current squad.
I for one though am glad that these penalties have finally been thrown down. Big clubs in Europe have long spent copious amounts of money in signing players, City over the last decade, Chelsea before that, whilst Manchester United have also had the ability to throw down large sums in transfers as well. FFP was originally brought in to stop clubs going broke, however the big clubs have flaunted the rules over the years with UEFA throwing around the occasional fines, however these rarely hurt the big clubs so it’s good that UEFA have finally got tough.
Will be curious what the sport of arbitration will do with the appeal, however I personally hope they uphold it. It’s time that the big clubs in Europe are held to account with over-spending. Hopefully then we might start to get some parity back to European soccer.