Manchester City consider challenge to €60m financial fair play fine

Eight of nine clubs involved in penalty process close to deal with watchdog

Manchester city owner Sheikh Mansour bin Zayed Al Nahyan: Club may yet be excluded from next season’s Champions League. Photograph: Getty Images

Manchester city owner Sheikh Mansour bin Zayed Al Nahyan: Club may yet be excluded from next season’s Champions League. Photograph: Getty Images

Wed, May 7, 2014, 01:00


Manchester City, furious at being bracketed with spendthrift Paris Saint-Germain, are considering taking on Uefa’s new financial fair play regime after it emerged both clubs face huge fines of almost £50m and restrictions on their big money squads.

In a game of high stakes poker that must be settled one way or the other before Friday’s deadline, Manchester City must decide whether to reluctantly accept the punishment on the table or face the matter being referred to the club financial control body’s adjudicatory chamber.

That panel, chaired by the Portuguese judge Jose Narciso da Cunha Rodrigues, could conceivably decide to impose an even harsher punishment - up to and including excluding Sheikh Mansour’s title chasing club from next season’s Champions League altogether.

Eight of the nine clubs still involved in the process are understood to be close to a settlement with the investigatory arm of Uefa’s CFCB, which has been poring over the accounts of the 236 clubs that qualifed for European competition during the two seasons under scrutiny, over the past 18 months. Besides City and PSG, the other seven transgressors are understood to be from outside the big four leagues in Europe and facing much smaller penalties.

Under the punishment proposed by Uefa, which PSG is believed to be close to accepting, both clubs would receive fines of EUR20m per season for the next three years, plus a reduction on their European squad size from 25 to 21 and a cap on their wage bill to peg it at the current level.

PSG’s coach, Laurent Blanc, said the proposed sanctions would limit his ability to compete in the Champions League and would force him to be prudent in the transfer market. “We’ll have to target things well and be smart,” he said. “We’ll have to be very precise in order to improve this team but I think we can and we will.”

Manuel Pellegrini refused to speculate on what the FFP process might mean for City. “I don’t know about that,” he said. “Not official [YET, SO]nothing more to say. When there is official news from Uefa we can analyse what will happen.”

Because of Uefa’s homegrown players rule, which requires at least eight players in a European squad to have been trained domestically for three years between the ages of 15 and 21, that is likely to lead to City having to leave out some highly paid stars in favour of young talent.

There is a feeling in Abu Dhabi and the Etihad that Manchester City have been unfairly targeted but sources close to the Uefa process insist the size of the punishment fits the crime. Under the rules, ostensibly designed to cool wage inflation and prevent clubs buying their way to success, clubs are allowed losses of EUR45m over the 2011-12 and 2012-13 seasons.

Although Manchester City lost GBP153m over the two seasons in question, insiders have repeatedly insisted that the ability to write off the value of contracts signed before 2010 when the rules were unveiled, as well as write down investments in youth development and infrastructure, allowed them to narrowly comply.

But sources close to the process said that the size of Manchester City’s proposed sanction related to the size of their transgression.

Uefa’s accountants are believed to have concluded that Manchester City’s GBP350m 10-year deal with Abu Dhabi’s national airline Etihad and a series of licensing deals have been significantly overvalued.

Revealing that losses had been reduced to around GBP52m for 2012-13 from GBP99m the previous year, Manchester City said it had sold players’ image rights for GBP24.5m to a separate company and raised GBP22.45m from licensing intellectual property to “third parties” - believed to be new City franchises in New York and Melbourne.

And according to Uefa’s rules, the write down on contracts signed by 1 June 2010 only applies to the first of the two seasons under consideration.

Initially 76 clubs across Europe were deemed to be worthy of further investigation with nine then ruled to have failed the FFP test. Eight of those clubs are believed to be close to a settlement with only City holding out, leaving them in a potentially vulnerable position. Although both sides stress that there is potential for further negotiation, the CFCB is unlikely to yield significantly from its current position.

The potential exists for Manchester City, who will win the Premier League if they take four points from their last two home games, to fight the Uefa verdict all the way to the court of arbitration for sport. It has said it will attempt to hear any potential challenge to the first round of FFP decisions before the beginning of next season. But if City gamble on appealing, they could end up with an even stronger punishment and risk a summer of uncertainty damaging their chances in the transfer market.

Despite having invested close to GBP1bn over five years in making City a force in European football, the club’s executives have consistently insisted that they remained committed to passing Uefa’s FFP test.

If Uefa manage to make the swingeing punishment stick, some awkward questions could be asked of the club’s hierachy - including the chief executive Ferran Soriano - if it emerges that they misled Manchester City’s owners over the likelihood of passing the FFP test.

The Qatar-owned PSG, on the other hand, have effectively admitted that their EUR200m per season deal with the Qatar Tourism Authority, written down by at least half by Uefa’s accountants under rules on related party transactions, was inflated.
Guardian Service

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