The Premier League has announced that it has referred a number of alleged breaches of Premier League rules by Manchester City Football Club (“City or Club”) spanning over a period of 14 years, since 2009, to an independent commission (“Commission”). Specifically, the Premier League (“PL”) has charged the Club with alleged breaches (“Charges”) of 115 of its financial rules (the “Rules”) following a four-year investigation.
Background
The PL announced on its website on 6 February 2023, (without warning), that it, “has referred a number of alleged breaches of [our] rules [by City] to a commission”. The charges relate to nine seasons from 2009/10 to 2017/18. The alleged breaches are a result of a 4-year investigation by the PL into the financial affairs of City.
This article looks at the Charges facing City and the possible sanctions facing the Club should the Commission find that the Rules have been breached.
The Charges
As mentioned, the PL has charged City with alleged breaches of the Rules on no less than 115 occasions over 14 seasons from 2009-10 to the present campaign in 2022-23. This can be further broken down into 5 distinct groups:
Group 1 (50 breaches) – Acting in Good Faith
The alleged breaches in this group relate to the requirement to provide “in the utmost good faith”, accurate financial information that gives a true and fair view of City’s financial position. There is particular emphasis on the reporting of revenue (including sponsorship revenue) which the Club received, as well as its operating costs and related parties.
Group 2 (24 breaches) – Player and Manager Remuneration
This group relates to providing details of manager and player remuneration. The PL allege that breaches of the Rules took place requiring a member club to include full details of manager and player remuneration in its relevant contracts.
Specifically, the Rules require clubs to have any employment contract with a manager or player to be evidenced in writing and ensure that the said contract is registered with the league secretary. It must also include the standard clauses set out in the Premier League Handbook. It is alleged that City has breached both Rules in some form or another.
Group 3 (5 breaches) – UEFA Financial Fair Regulations
The PL must ensure that its members (the clubs) comply with all regulations set out by UEFA, specifically, the regulations concerning Financial Fair Play (“FFP”). In 2020, UEFA imposed a ban on City (a 2-year competition ban) after having found them (the Club) guilty of breaching club Licensing and Financial Fair Play Regulations, instead, they were only on the receiving end of a £10 million fine.
However, it was later overturned by CAS on appeal, which ruled that some of the alleged offences were timed barred.
Unfortunately, the PL has no such rules that would allow breaches to be time barred and, as such, this would not be a defence that City can rely on during this investigation. The alleged breaches are said to have taken place during the seasons 2013/14 – 2017/18.
Group 4 (6 breaches) – Profitability and Sustainability
The PL has alleged that City has breached rules related to its Profitability and Sustainability regulations throughout 2015 to 2018. The PL requires clubs to submit annual accounts to the league secretary before 1st March each season along with copies of its director’s report and auditor’s report.
Group 5 (30 breaches) – Cooperation with the Premier League
The breaches in this group are alleged to have taken place from 2018/19 season to the present season (2022/23). Further, it is alleged that City breached the Rules requiring member clubs to cooperate with and assist the PL with its investigations”, including, “by providing documents and information to the PL in the utmost good faith”. In short, it is alleged that City have been engaging in conduct with the intention of circumnavigating the Rules.
Potential Sanctions
Unlimited Fine
Rule W.51 of the PL handbook states that the Commission may impose a fine, unlimited in amount. This is a similar sanction to those that have been utilised by UEFA in its policing of FFP throughout Europe.
Suspension
Moreover, where the respondent is a club, as is the case here, the PL can suspend it from playing any league matches. However, this is unlikely to happen given the logistics of such suspension, nevertheless, it is an option open to the Commission.
Points Deduction
The Commission could deduct points from the Club. However, it is not difficult to foresee the issues and problems arising from such a move, particularly, when looking at which campaign this could and would be applied to.
There is guidance to an extent in this area in that Juventus, previous league champions in Italy, were recently handed a 15-point deduction as a result of breaching Italian regulations.
Expulsion
The PL could also expel the Club from the league. It can only be assumed that this style of punishment is only reserved for exceptional circumstances however, it is not unimaginable in the event that it is found proven that City breached all or most of the rules it stands accused of.
Any order it thinks fit
The Rules permit the Commission to impose any such sanction that it sees fit in the circumstances. This could come in various combinations and forms, for example, automatic relegation could be a possibility, a transfer ban, or a combination of both.
It is also open to the Commission to take retrospective action whereby it decides to strip the Club of its success throughout seasons where the breaches occurred.
Conclusion
Although the hearing is to be conducted in private, there will be much speculation over the coming months and throughout the hearing as to the potential outcomes. Nevertheless, should the Commission find that City have breached the Rules there will, no doubt, be moves from other PL clubs to have the record books updated and trophies reallocated.
Moreover, some clubs may seek financial recompense for missing out on European competition. In addition, UEFA may look to come calling on City’s door again and furthermore, there may be a clamour for the PL to make an example of City, thereby discouraging other clubs to adopt the same tactics.
It’s no coincidence that the PL’s announcement has come just before the Government’s long awaited white paper for a football regulator is due to be made public. The PL must be seen to be keeping its house in order.