Wow wow wow.
UEFA finally showed a spine, dropping the hammer on FFP violating Manchester City on Friday. The FOURMIDABLES have been banned for two years from competing in the Champions League and fined €30 million. The ban and fine come from City’s flagrant breaches of financial fair play regulations and alleged misleading of investigators.
Maybe that explains their lack of January transfer activity? The ban would take place for the 2020-21 and 2021-22 campaigns. It could cost City up to €200m in lost revenue.
UEFA statement on Manchester City ban
In a statement about the punishment, UEFA said:
“The Adjudicatory Chamber, having considered all the evidence, has found that Manchester City Football Club committed serious breaches of the UEFA Club Licensing and Financial Fair Play Regulations by overstating its sponsorship revenue in its accounts and in the break-even information submitted to UEFA between 2012 and 2016.
“The Adjudicatory Chamber has also found that in breach of the regulations the Club failed to cooperate in the investigation of this case by the [chamber’s Club Financial Control Body].
“The Adjudicatory Chamber has imposed disciplinary measures on Manchester City Football Club directing that it shall be excluded from participation in UEFA club competitions in the next two seasons [ie. the 2020/21 and 2021/22 seasons] and pay a fine of €30 million.”
Manchester City response to two-year Champions League ban
The ruling surprises no one. Except, apparently, for City bosses. In a response statement, City said:
“Manchester City is disappointed but not surprised by today’s announcement by the UEFA Adjudicatory Chamber.”
“The club has always anticipated the ultimate need to seek out an independent body and process to impartially consider the comprehensive body of irrefutable evidence in support of its position.
“In December 2018, the UEFA Chief Investigator publicly previewed the outcome and sanction he intended to be delivered to Manchester City, before any investigation had even begun. The subsequent flawed and consistently leaked UEFA process he oversaw has meant that there was little doubt in the result that he would deliver.
“The club has formally complained to the UEFA Disciplinary body, a complaint which was validated by a CAS ruling.
“Simply put, this is a case initiated by UEFA, prosecuted by UEFA and judged by UEFA. With this prejudicial process now over, the club will pursue an impartial judgment as quickly as possible and will therefore, in the first instance, commence proceedings with the Court of Arbitration for Sport at the earliest opportunity.”
What is Financial Fair Play?
UEFA set up financial fair play (FFP) rules as soccer’s popularity (and wages) exploded in the early 2000’s. Enacted in 2011, FFP is a means to protect clubs from themselves and establish some general economic rules and boundaries. More specifically, FFP prevents soccer clubs from spending more than they earn on players as they chase titles. The goal is to limit a clubs’ financial stress and better ensure their long-term survival (particularly when a wealthy owner gets bored with the team or doesn’t want to invest in a losing project any more).
How Manchester City violated FFP
Now to that bolded “spending more than they earn” from the above section…
According to documents drawn from Spiegel regarding City’s violations, “The files are said to include emails and internal club documents showing efforts by City to circumvent UEFA’s financial fair-play regulations by masking cash infusions from a United Arab Emirates state-backed investment company through inflated sponsorship agreements with entities including the U.A.E.’s national airline, Etihad. Etihad is City’s principal sponsor, its name adorning the team’s stadium, its signage during matches and even the front of the players’ jerseys.”
The financial impact of the Champions League ban on Manchester City
Even though City perennially bottle in the quarterfinals of the Champions League, they still earn massive revenue from participation.
Assuming City would make it to the quarters before bottling the next two season, that’s about €45m per year or €90m total in lost revenue.
If City didn’t actually bottle against top competition for once and won the Champions League for the first time–it’s around €1oom in lost revenue per year.
City will appeal the ruling
Of course City will appeal the ruling. Expect the ban to ultimately be reduced to one year.