Manchester City, a prominent English football club, has been found guilty of inflating their commercial revenue by £830.39 million between 2009 and 2018. An independent commission of the Premier League discovered that the club's ownership vehicle, Abu Dhabi United Group, provided hundreds of millions of pounds to the club, which were then presented as commercial sponsorship revenue. This scheme artificially increased the club's revenues and reduced its reported costs.
The commission's findings detail how Manchester City arranged "sham contracts" with several commercial partners as part of a "disguised funding scheme". Premier League chief executive Richard Masters stated that Manchester City had "systematically broken Premier League rules for nearly a decade". The club's owners directly funded the club while presenting the money as commercial revenue. Between 2009/10 and 2017/18, City declared £949.94 million in commercial revenue from Abu Dhabi-linked sponsors.
However, only £119.25 million was paid by the sponsors, while the remaining £830.39 million was classified as "Tagged Sums" and paid to the club by Abu Dhabi United Group. During the 2017/18 season, City reported £145.73 million in commercial revenue, but only £11 million was paid by sponsors, while £134.73 million came from the owners. The commission found that the arrangement allowed City's owners to directly fund the club.
Manchester City also recorded £360 million in sponsorship fees during the three seasons in which they won the Premier League between 2011/12 and 2017/18. However, only £43 million of that amount represented legitimate sponsorship payments. The commission stated that the relevant sponsorship agreements were found to be shams, or at minimum did not reflect their economic substance.
The commission cited deliberate conduct in the commercial arrangements, which involved "deliberate or reckless conduct intended to circumvent the Premier League rules". The scheme enabled City to avoid recording what would otherwise have been the Premier League's largest single-season loss in 2009-10. In one instance, a £9.9 million gap in the club's accounts for 2012/13 was "plugged" to prevent a breach of the regulations.
The commission also found that some important club witnesses gave false evidence during the proceedings, with some knowingly providing "untrue and dishonest evidence". Manchester City have denied wrongdoing throughout the case and have the right to appeal the commission's findings. The Premier League said the independent commission found City guilty of the financial-rule breaches brought against the club between 2009/10 and 2017/18.
The club faces potential sanctions, including possible points deductions or even expulsion from the Premier League. The Premier League's independent commission found City guilty of almost all charges, with one charge relating to non-cooperation with the league's investigation not upheld. Manchester City's case has significant implications for the club and the Premier League, with potential repercussions for the club's future.
Key points
- Manchester City inflated commercial revenue by £830.39 million through "sham contracts" and disguised funding scheme.
- The club's owners directly funded the club while presenting the money as commercial revenue.
- Manchester City faces potential sanctions, including possible points deductions or even expulsion from the Premier League.
