As "disruptors" Man City try to dismantle PL rules, NEW details of financial chicanery
The Premier League's 20 clubs meet in London to vote on sponsorship rules. And we publish documents and contracts that throw new light on some of City's APT deals.
A potentially pivotal day in the history of the Premier League begins in earnest at 9am this morning in a London hotel, where senior representatives of the 20 clubs will begin lengthy talks about an amended version of the Premier League's “associated party transaction” (APT) rules.
This is already shaping into a civil war between a small group of clubs, led by Manchester City, who want fewer restraints on where sponsorship comes from, and the Premier League hierarchy plus a majority of the clubs, who don’t want a complete free-for-all in related-party funding.
The stakes are enormous, as are the levels of acrimony. What’s happening in relation to APTs is effectively an extension of Manchester City’s six-year war with the Premier League over alleged financial misconduct. That led to the “115” case that dates back to late 2018 and exploded with charges in February of last year.
After describing what might unfold today, I’ll provide the back story of City’s run-ins with football’s authorities over financial matters, including multiple transgressions since 2014.
That story will come with a mass of documents, several never before made public. Subscribers to this site can read them and download them below.
In today’s APT vote, the Premier League need 14 of 20 votes to get the new rules passed. The disrupter group - City’s chairman Khaldoon Al Mubarak is fond of saying that City are disrupters - will need seven votes to win the day. Abstentions may change the picture.
City will definitely have Aston Villa on their side because Villa’s co-owner Nassef Sawiris has gone public this week to say he will vote with City against the APT amendments.
The Egyptian businessman, worth around $9bn, has shifted the centre of his business operations to the UAE, where City’s owner and most prominent sponsors are based. Sawiris is increasingly close to Khaldoon.
Villa wrote to fellow clubs in recent days explaining their logic in not supporting the amendments today, as all parties are still waiting for full clarification on the APT tribunal ruling made public in October. (PDF of that ruling below).
“It is now abundantly clear that any vote [if passed] will result in immediate further litigation by Manchester City FC and an associated defence by the Premier League, incurring material further costs and unnecessary distraction and devotion of time to this issue,” Villa wrote to their fellow PL clubs.
“It is highly likely that the tribunal will conclude within the coming three months, and that an APT rule that takes into consideration the tribunal’s verdict will be supported by all clubs and cannot be contested.”
City and Villa are likely to be supported in their “no” vote by Newcastle, whose majority owners, the Saudi Arabian sovereign wealth fund PIF, would welcome fewer restrictions on APT deals. That trio will almost certainly be joined by Everton and Nottingham Forest, both deducted points last season for financial rules breaches, and bitter at the Premier League because of it.
Wolves are reportedly on the fence and could go either way while Chelsea could potentially make it the seven “no” votes that the rebels need. Equally, the rebels might not get seven. It’s too close to call.
Whatever happens, expect a mess for months to come as City throw every legal punch they can to try to get their way.
It’s what they’ve been doing for a decade, more of which shortly.
City mounted an initial legal challenge to the existing APT rules earlier this year, and by 7 October we knew they had won some small victories in less than a handful of their 20 challenges while being defeated on the rest.
(You wouldn’t have known that from the initial coverage in some quarters, by parts of the media briefed, leaked to and supported by City. One amusing Laurel and Hardy combo from different papers were even filing the same City-slanted stories, in the same words, at exactly the same time. They’ve been filing the same stories in recent days, at the same time to the minute, although someone has obviously suggested to Statler and Waldorf that they both actually write their own copy).
Anyway, today the 20 clubs meet from 9am for a meeting expected to last long into the afternoon, and in which various sources insist there will be a vote on the amended APTs. Others suggest the vote may be delayed.
Three parts of the existing APTs have been tweaked: firstly around the status of shareholder loans and whether they should count as APT transactions that require interest; secondly around some semantic issues of what “would” or “could” be allowed; and thirdly around the process and timing by which a database of “benchmarked” commercial deals is made available to clubs submitting putative new deals to get green lighted.
City first got into significant trouble with regulators over breaches of financial rules when UEFA investigated them for huge overspending in contravention with UEFA’s then-new Financial Fair Play regulations in 2014.
But as we shall see, City and their main sponsor, Etihad, were already involved in “unconventional” arrangements before FFP first came into force in 2011-12 season.
Revealed: How Etihad weren’t even funding all their City deal before 2012
Football Leaks published a cache of emails in April 2022 that purported to show some of Manchester City’s sponsorship income was in fact disguised equity, or in other words not coming from sponsors but from UAE coffers. This article includes a description of City’s head of finance in 2012, Andrew Widdowson, asking City official (and UAE consultant) Simon Pearce to “help in facilitating the amounts due via the Abu Dhabi partners”.
Widdowson then went on to specify sums of money to be directed through sponsors Etihad and Etisalat, two Abu Dhabi businesses. “I want to ensure that they come through the correct channels and are not picked up as separate sources of funding,” Widdowson wrote.
Today I can reveal that Etihad were not even paying their full sponsorship sums to City before FFP even came into force. The first PDF below (“£4m not £12m from Etihad”) includes email exchanges between Widdowson and counterparts at Etihad from April 2011 detailing how a £12m deal supposedly between Etihad and City was actually being funded only £4m from Etihad, with £8m from the Executive Affairs Authority, a branch of the UAE government. This appears to be a prima facie case of disguised equity funding.
The second PDF (“£4m not £12m from Etihad mcfc paper”) is an actual invoice from late 2010 from City to Etihad asking for £12m, but it has been annotated by hand to show that Etihad are only due to pay £4m.
When UEFA’s FFP rules process began to monitor spending by clubs, in the 2011-12 and 2012-13 seasons, City failed at the first hurdle.
It was obvious as far back as the 2011-12 season, when FFP monitoring began, that City were wilfully overspending and would fail FFP. As I wrote at the time: “It is inevitable City will fail to meet the first FFP break-even target.” City could simply have spent less, on transfers and wages, and not failed. They opted not to do that.
City did indeed break the FFP rules, and in 2014 were fined €60m and had to implement squad and wage cuts. The fine was later reduced to ‘only’ €20m for implementing those changes.
Pro-City propagandists insist City never did anything wrong, never admitted wrongdoing and were not fined. Rather, they argue, City freely agreed to a €60m fine and multiple other punishments as part of normal business behaviour.
In 2016, I reported that City had come close to getting kicked out of the Champions League in 2014, but agreed a plea bargain (PDF below) to avoid that punishment and received instead only a fine for their huge FFP breaches. Paris St Germain did a similar deal, and both arrangements were brokered by then UEFA president Gianni Infantino, a sports leader whose integrity we know all about.
As my 2016 article above detailed, City’s income in the 2011-13 monitoring period was boosted in atypical fashion by the sale of £47m of “intellectual property” to related and third parties. This was deemed irregular by UEFA and City agreed not to repeat such transactions.
Other anomalies included a win-related bonus of more than £5m, paid by a Middle East sponsor, for the 2013 FA Cup final… despite City losing that final to Wigan.
Two other City commercial contracts from UAE-based partners, Aabar and Etisalat, were deemed way above market rates.
Four years after my 2016 report, The Guardian, in 2020, also revealed that UEFA’s auditors of City in 2014 were denied access to full financial records to do their job; and detailed how City, in fact, posted excess losses totaling about €180m in 2012 and 2013, far more than the €45m FFP maximum allowed. City were punished back in 2014 not unfairly, but for creative accountancy, or cooking their books.
Unbeknown to anyone at UEFA when the 2014 fine was meted out, but later revealed by the Football Leaks documents, Simon Pearce, a City board member — as well as one of the most senior advisors to Sheikh Mansour — had written in December 2013 to Peter Baumgartner of Etihad (City’s main sponsor), detailing how Etihad would provide just £8m of £99m of Etihad sponsorships. See below.
As an aside it is worth noting that some pro-City mouthpieces have argued that just because leaked emails said one thing, it doesn’t mean that actually happened.
Let’s take the screenshot above as an example. Did the Etihad-City £67.5m annual deal from 2013 (which apparently Etihad only funded to the tune of £8m), really apportion £35m per year to shirt rights, £17.5m per year to training kit and naming rights, and £15m a year to stadium naming right?
Have a look for yourself. Below is the actual contract for the inexplicably massively re-upped City-Etihad deal in 2013. See “fees and payment” on page 12 to find out. Spoiler: what appears to be suggested in the leaks emails is what happened.
UEFA later, in 2020, charged City with more FFP breaches following a tranche of 2018 Football Leaks documents.
When UEFA again found City guilty of financial irregularities and they appealed to the Court of Arbitration for Sport (CAS), in 2020, Simon Pearce was asked at CAS: “Have you ever arranged any payments to be made to Etihad in relation to its sponsorship obligations of Manchester City Football Club?” Pearce answered: “Absolutely, categorically not.”
You can read and or / download CAS’s City verdict here, although that PDF version is not searchable. I have created a searchable version here.
Look for the word “categorically” to read about Pearce’s testimony. The judges found him reliable even as later documents suggested he did not tell the truth in court.
The December 2013 email above was only put into the public domain after the CAS case, on the face of it seeming to show that Pearce had not been truthful at CAS, where a two-year Champions League ban for City was overturned. City refused to comment when asked about Pearce’s CAS statement and the December 2013 email.
I reported on this in greater detail in 2021, having obtained more material about anomalies in City’s claims of innocence, and also having established that City were desperately trying to keep secret the fact that the Premier League were then also almost three years into their own investigation into City. The club had gone to the High Court to try to keep that secret but the Mail on Sunday won a ruling to reveal what was happening.
City ended up with their 2020 Champions League ban (later overturned) and another €30m fine (later reduced to ‘only’ €10m) for not co-operating with UEFA, following a series of explosive allegations in the Football Leaks series.
Various leaked documents (PDF below) led to the investigation that ended with the Premier League’s 115 charges. In February 2023, almost four-and-a-half years after the Premier League launched a formal investigation into alleged financial and other malpractice, City were charged with 115 counts of Premier League rule breaches.
The charges relate to matters believed to include failing to provide accurate financial information; not disclosing full details of Roberto Mancini’s wages; not disclosing certain payments to players, including Yaya Toure, and, via relatives, to underage players; breaching UEFA’s FFP rules; breaking the PL’s own profitability and sustainability rules; and not co-operating with the Premier League investigation.
It is alleged City failed to provide accurate details for player and manager payments on 14 occasions between 2009 and 2018. These 14 alleged breaches include breaches in relation to Roberto Mancini’s contracts, document below.
It was also alleged illicit payments was made to Yaya Toure, documents below.
You may already have read the documents, for example in relation to Mancini. But if you haven’t, and using the Mancini case as just one example, he was hired to manage City in December 2009 on a three-and-a-half year deal on a basic salary of £1.45m per season that would rise by £200,000 per season from the first time City finished inside the top four.
Mancini would also get a bonus of between £1.5m and £4m depending on whether City finished 4th, 3rd, 2nd or 1st; and a bonus of between £1m and £3m for reaching stages in the Champions League between the quarter-finals and winning the tournament. There were all sorts of other bonuses, perks and expenses, and those are detailed on pages 2-4 of the PDF above.
Mancini’s contract to manage Manchester City is dated 19 December 2009. On the same date he signed a contract to provide coaching services for a minimum of four days a year with the Al Jazira club in Abu Dhabi (where the chairman is Sheikh Mansour, owner of City), also in a three-and-a-half year deal, for £1.75m a year.
It has always been stressed by Manchester City that Sheikh Mansour (below, right, at the 2023 Champions League final) owns City in a personal capacity and that City are definitely not owned or controlled by the state of UAE. Sheikh Mansour loves Manchester City so much that he has seen them play twice in his 16 years as the owner, once in 2010 and once in 2023.
Mancini’s contract with Al Jazira was at pains to stress it should be kept secret, saying: “Neither you, your company nor the club shall, without the prior written consent of the other, disclose the existence or terms of these Heads [of agreement], to any third party.”
Both the City contract and the Al Jazira contract were signed by the same person on behalf of City. You can see the signatures for yourself in the PDF. Email trails (also in the PDF) appear to provide clear evidence that City executives were instrumental in paying Mancini for his Al Jazira “work”, whatever that actually was.
The email below, for example, sent in July 2012 from City’s then chief financial officer, Graham Wallace, to City’s then head of finance, Andrew Widdowson, asked Widdowson to “do the usual” and “remit funds” to ADUG (City’s parent company) and arrange for that to be sent to Al Jazira so they could pay a company, IIS, which was effectively owned by Mancini, for Mancini’s work at Al Jazira.
The implication could not be clearer: that City were paying Mancini £1.45m per yer plus bonuses from the football club, and another £1.75m per year via an entity that wouldn’t be on City’s books.
In other words, City as a club could pretend they were paying Mancini “only” £1.45m a year plus bonuses, and not the other £1.75m a year. The allegation is that this was yet another way they were cooking the books.
Today’s meeting in a London hotel is ostensibly about whether 20 clubs will agree to small amendments to rules that want to prevent mega-wealthy owners using related parties to pump untold gazillions into clubs.
But it’s all actually part of a 10-year saga of Manchester City’s plutocratic ownership, and issues of integrity, at its heart.
And it’s a long, long way from a conclusion.
Thanks- you continue to provide the best coverage around on this issue.
Looks like City have been breaking the rules for years. Surely they should lose all trophies and titles they'd won over that period, in the same way a doping athlete would lose medals?