The Premier League champions find themselves embroiled in one of the most controversial and high-profile financial fair play (FFP) cases that European football’s governing body, Uefa, has dealt with, and could be kicked out of the Champions League. So where will it all end?
What punishment could City face?
Since March, Uefa investigators have been examining leaked documents – published by German newspaper Der Spiegel last year – which it alleged showed that Manchester City misled Uefa by not revealing it had directed money to the club from its Abu Dhabi owner Sheikh Mansour via sponsors linked to him, and artificially inflated the value of its commercial income to help it meet FFP rules requiring clubs to break even.
City denied any financial wrongdoing, but it emerged in the New York Times this week that members of the investigatory chamber of Uefa’s financial watchdog – the Club Financial Control Body (CFCB), which is effectively the ‘prosecution’ in this process – were pushing for expulsion from the lucrative Champions League for at least one season.
Uefa has not confirmed this or revealed whether former Belgian Prime Minister Yves Leterme – the chief investigator – has agreed with his colleagues and recommended such a sanction, but the BBC understands that he has.
The adjudicatory chamber will now consider whether to apply such a punishment.
Very few cases relating to Uefa’s break-even rules end up being referred to this body, with most being concluded with a settlement, so it is perhaps significant that it has reached this stage.
Portuguese judge Jose Narciso da Cunha Rodrigues is the chairman of the adjudicatory chamber and will look at the case with at least three of its four members – vice-chairmen Christiaan Timmermans, of the Netherlands, Switzerland’s Louis Peila, English QC Charles Flint and Adam Giersz, Poland’s former sports minister.
They will vote whether to uphold Leterme’s recommendation and which sanction to apply. The potential sanctions range from a warning, reprimand and fine, to deduction of points, withholding of revenues, squad restrictions, exclusion from future competitions or even the withdrawal of a title.
Uefa has been known to bare its teeth with a ban. FC Dynamo Moscow were kicked out of the Europa League in 2015 for failing to comply with the FFP rules. Galatasaray received the same punishment. But it is rare.
Will the adjudicatory chamber agree with Leterme’s recommendation?
Not necessarily. In fact, it has been known to apply a stronger sanction than the chief investigator has suggested, and to deviate from his stance. For instance, last year a case against PSG was dropped by Leterme. Rodrigues disagreed and sent it for review to the adjudicatory chamber.
There has sometimes been an assumption that ultimately, Uefa – mindful of the wishes of sponsors and broadcast partners – would be loathe to ban a club as strong as City from its flagship club competition. But there is also now a sense that they need to show that their FFP rules – which some critics dislike and see as a clumsy way of protecting the status quo, rather than encouraging financial stability – cannot just be flouted.
This also comes at a pivotal moment for Uefa, with the governing body – along with the European Club Association – under mounting scrutiny over controversial plans to revamp the Champions League.
What impact this may have on City’s fate is unclear, but Uefa is certainly under pressure to handle this case properly, and to show it cannot be intimidated by a rich and powerful club.
How long could this process take?
Months rather than weeks.
This is a complex case and it is thought that the adjudicatory chamber could take its time to consider Leterme’s recommendation. An oral hearing may also be called.
As an example, more than a month ago the investigatory chamber referred AC Milan to the adjudicatory chamber for failing to comply with the break-even rules for the period 2015-2018. We are yet to hear the outcome.
City could also then appeal to the Court of Arbitration for Sport (CAS).
It is therefore highly unlikely any ban would apply to next season’s Champions League.
How successful have previous appeals been?
CAS did uphold a Europa League ban for Turkish club Bursaspor in 2015 when it appealed.
But last year, AC Milan’s ban from this season’s Europa League for breaching FFP and licensing regulations was overturned by CAS, which told Uefa that the punishment was not proportionate and that the adjudicatory chamber had not properly assessed some “important elements”.
In February, Galatasaray also won a challenge at CAS against the adjudicatory panel when it reopened an investigation into the Turkish club.
The following month, CAS also upheld Paris Saint-Germain’s appeal against Uefa reopening a probe into their finances up to June 2017.
This will perhaps give Man City some encouragement, but those cases are very different to theirs – based on technicalities and time limits. And it is thought that Uefa’s investigators feel more confident that they have a solid argument this time.
That may be because this case is unusual in that City stand accused of misleading Uefa’s investigators, rather than simply a conventional FFP breach of inflating the value of a sponsorship deal and failing to break even.
It has been noted by some at Uefa that City are insisting they have provided evidence that proves that the “accusation of financial irregularities remains entirely false”, but in their statements they do not refer to the more pertinent allegation that they may have misled investigators.
Will City appeal?
Judging by their statements, almost certainly.
They say they are “entirely confident of a positive outcome when the matter is considered by an independent judicial body”, ie CAS.
How do City feel about all this?
The club is making very clear just how angry and upset it is, and have three prestigious law firms working for them on this case.
For months after the leaked documents were published, City limited their statements to highlighting their belief that emails between senior figures at the club had been hacked and that this was the result of a coordinated campaign to smear them.
But more recently the club has taken a more aggressive approach, refuting the allegations of financial irregularity, directly criticising Leterme by name, and the CFCB for leaked information and referring to “mistakes, misinterpretations and confusions fundamentally borne out of a basic lack of due process” and a “wholly unsatisfactory, curtailed, and hostile process”.
City are also puzzled that Leterme seems to have told the adjudicatory chamber that the club has further questions to answer but City have not been told what.
Some may see all this as a genuine mood of injustice, others as a bid to force Uefa into a deal or indicative of how rattled City’s hierarchy now is.
But it is interesting that City referred to a “sudden” referral by Leterme. The club have noted that it is five years to the day since Uefa announced City had breached FFP rules and fined them £49million, (although City received £33m back three years later after they met regulations), and this suggests they may argue that the decision to refer was influenced by this, and rushed as a result.
According to the CFCB’s own regulations, they cannot bring prosecutions more than five years after the event.
It is understood that investigators are confident they can show this decision was not rushed because of this ‘statute of limitations’ deadline.
They could also make the point that they were actually considerate of City’s footballing interests by waiting until after the club had retained the Premier League title before referring their case.
City almost certainly took a dim view of an interview Leterme gave to a Belgian magazine earlier this year in which he warned: “If what has been written about Manchester City is true, there might be a serious problem. This can lead to the heaviest punishment – exclusion from Uefa competitions.
“If the (Der Spiegel) information is correct, this goes against the truthful reporting of financial affairs,” he added.
I understand that some Uefa investigators were initially unsure whether it was their responsibility to assess whether City had misled them. But they eventually concluded that because FFP requires clubs to truthfully report their financial affairs and transactions when they apply for a licence to compete in European club competitions, it fell within their remit.
How damaging is this for City?
Being barred from the competition that many believe Manchester City’s owner covets more than any other would be a serious blow.
Uefa gives clubs competing in the tournament 2 billion euros each year, so it would have a major financial impact.
And being labelled cheats who have flouted the rules of the sport would not go down well with the Abu Dhabi royal family, who many believe have invested vast amounts in the club to improve the UAE’s image abroad and to help deflect attention away from the country’s human rights record.
While none of this is the responsibility of City’s squad or playing staff, it may be slightly unsettling for a club that is trying to prepare for the FA Cup final on Saturday and secure an unprecedented domestic treble.
With a bus parade through the streets of Manchester being planned for Monday, this should have been a week of uninterrupted celebrations for City, one of the greatest teams ever to grace the Premier League.
Instead they find themselves a step closer to a humiliating Champions League ban – and had to explain a video appearing to show players and staff singing a song that celebrates Liverpool fans being “battered in the streets” and Mohamed Salah being injured in last year’s final, for which they have also been widely criticised.
And they still remain under separate investigations of their finances and transfer dealings by Fifa, the FA and the Premier League.
There is much at stake for the dominant force in the English game over the coming months.