Will City be convicted? It’s the X-Million Dollar question
Mailbag Part II! Also includes Abramovich Chelsea 'loans'
Welcome to the second part of the Mailbag. If you missed the first part, then I took on questions including whether Wrexham could ever reach the Championship, the Venkys’ ownership of Blackburn Rovers and how to reconcile working for a newspaper whose politics you disagree with – you can catch up here.
Final City verdicts may come next season
Our first question comes from Fergal O’Shea, who writes: Do you think Man City will actually be convicted, this side of 2040?
Nick Harris: This relates to the 115 charges of alleged financial irregularities laid by the Premier League in February 2023 against City. For more general background in detail on City’s wrong-doing so far, and alleged further wrong-doing, see the first answer to last week’s Q&A.
What we know is that a date has been set for the independent panel to hear the case. That will reportedly happen this autumn but has not been confirmed. It could go on for some time given the number of charges. If City are found guilty, they will doubtless appeal and that could take months more. But I’d expect final verdicts one way or another, between late 2024 and Spring 2025.
Will City be convicted? That’s the hundreds-of-millions-of-dollars question.
Four reasons City might be convicted
1. The Premier League will have paid extremely close attention to City’s tactics and legal arguments when getting a two-year Champions League ban overturned at CAS in 2020. It will prove to be an act of enormous folly if they charged City for 115 alleged offences without believing they have at least reasonable grounds, and proof, that they can make charges stick, if not all of them.
I suspect City would bite your hand off for just another non-cooperation fine
2. The Premier League spent four-and-a-half years investigating before charging. I have no idea whether they have hitherto unknown documents that blow a hole in City’s defence, or they have a whistleblower; or whether they can demonstrate fully that what City told them about various financial deals in the past wasn’t true. But again, one has to assume they believe in their case. They could easily have laid a few simple charges of non-cooperation on City, fined them, and made the case to other PL clubs that they tried, but ‘sorry’. I suspect City would bite your hand off for just another non-cooperation fine.
3. At CAS, inexplicably, UEFA turned down the chance to spend longer trying to gather more incriminating materials from City. They also, inexplicably, let City select two of the three-man panel of judges who decided the verdict. The verdict to exonerate City on the most serious issues at CAS was by a 2-1 majority. When I say ‘inexplicable’, I mean ‘politics’. The best guess is UEFA just wanted it done — for the certainty of future seasons — had already tired of City dragging things out, and ultimately didn’t have the will to keep prosecuting one of the continent’s best and most exciting clubs. UEFA have form in this area: under Gianni Infantino in 2014, they didn’t kick City out of Europe for egregious FFP breaches but instead gave City (and PSG) plea deals, and fines.
4. At CAS, some of City’s key witnesses were assessed by the judging panel as honest and transparent. Only later did more documents emerge suggesting that perjury had been committed. See last week’s Q&A for more on that. The Premier League will be armed with that knowledge.
Four reasons City might not be convicted
1. That, in fact, they are completely innocent, and that prior breaches and acceptance of punishments were honest mistakes, and that reams of documents suggesting concealed sponsorship and other illicit payments are just not true.
2. This kind of complex litigation is just that – complex. A key plank of City’s defence at CAS in 2020 was “whatever any documents or emails said doesn’t mean that the events that they describe actually happened”. Thus, the onus will be on the Premier League to prove every charge and not rely solely on emails to assume apparent wrongdoing unfolded as described.
3. Disclosure. The Premier League will not have been able to go on a ‘fishing expedition’ and ask City to hand over all their emails for the past 10 or 12 years. They will be able to ask for correspondence about X specific matter in Y specific week or month. But again, the onus will be on the league to already have the evidence they need. Disclosure is more complicated still when the Premier League has zero jurisdiction over other bodies implicated in the case. They only have jurisdiction over the club. So, if, for example, a damning email and set of MCFC sponsorship agreements was being negotiated between a government advisor to Abu Dhabi and an Abu Dhabi sponsor, the League has no right to access that.
4. Geopolitics. City’s owner Sheikh Mansour is the deputy PM of a key regional ally of the United Kingdom. If you don’t think various avenues will be explored to make this go away, or at least mitigate what happens, then I don’t think you have a future as a diplomat.
In summary: I don’t know, Fergal. I do think it will be settled before summer 2025, but which way, I can’t say with any conviction. No pun intended.
Abramovich ‘loans’ are a relic of the past
Paul Newman writes: I have a couple of queries about Chelsea's finances in the Abramovich era. When he was forced to sell up, it was revealed that he had loaned the club £1.5bn (for which he never sought repayment). This clearly explains why Chelsea were able to spend so much on transfer fees and wages over many years. Is the fact that these were loans the reason that this didn't amount to breaches of FFP or the Premier League's own financial rules? And if that is the case, why don't Man City's owners just ‘loan’ the club loads of money?
NH: Thanks Paul. There are various reasons the Abramovich loans didn’t amount to breaches. First neither UEFA FFP nor any Premier League rules on profitability or sustainability existed for most of the period between 2003 and 2012 when most of the loans were racked up. UEFA’s first FFP monitoring period began in the 2011-12 season and the Premier League didn’t implement their own equivalent (but less strict) set of rules in this area until 2013.
Second, and crucial, is Abramovich did not loan money directly to Chelsea. He loaned it to a company called Chelsea Limited, which isn’t a football club. Chelsea Limited later changed its name to Fordstam (Stam-ford back to front, clever, eh?). Then Chelsea Limited (later Fordstam) leant money to Chelsea FC.
Chelsea Limited’s (Fordstam’s) various loans to Chelsea FC have been converted to equity over time, which was legal. But Chelsea FC’s loans from Abramovich were not. So, it’s not the fact that the money was loans that meant the club didn’t fall foul of iterations of FFP, but the fact that the money was never leant from Abramovich to Chelsea FC directly,
For the first eight years of Abramovich’s ownership, Chelsea lost tons of money, year after year, making increasingly laughable promises it wouldn’t happen again, documented here. And they did so because there were no rules to stop it.
When the rules came in, it was Chelsea FC’s annual accounts that were being scrutinised, and what was being assessed each year was a club’s profit and losses, not loans, whoever they were from.
Man City’s owners couldn’t just loan the club a lot of money because unless it was for deductible ‘infrastructure’ reasons such as facilities, and youth and women’s football development, the rules as constructed since 2011-12 meant City have had to earn their revenues through legitimate arms-length deals, not disguised equity.
Return of Football Uncovered?
Andrew Maybin writes: Any plans to do more of the Football Uncovered podcast? That was absolutely superb. The Portsmouth one was my own highlight, of many. Reminds me of walking alone during COVID, with you and the two lads for company. But other than that, it’d be brill to see that back on my podcast app.
NH: Hi Andrew and thank you SO much for the kind words; it means an awful lot to me that you even listened in the first place, but also that it helped to distract during those dreadful times. For readers unaware of what Andrew is asking about, a few years ago I made two series of a podcast called Football Uncovered and you can find all the episodes at this link.
This was basically me telling stories about bad owners and crisis episodes at numerous clubs where I’d had a front-row seat and reported on the chaos over many years. It was produced by media company Sporf. It was good fun but a lot of work.
Some of the stories really were jaw-dropping. Series One Episode One is about my time ‘inside’ Blackburn and was really popular. The Pompey meltdown story was just NUTS. A lot of them were nuts: Hearts and Gretna, QPR, the special on FIFA’s villains. Season Two was more a look at clubs with the help of a fan each time.
At the moment, I’ve got to focus on getting this off the ground and doing other work and consultancy to earn a living. But I’m not ruling out more pods, of one kind or another, at some point in the future.
Thanks to all of you who sent in questions. Something on your mind? Please add your questions to the comments below this piece and I’ll answer in nextweek’s mailbag.