The Union of European Football Associations announced on Friday that it is throwing the book at Manchester City. European soccer’s governing body concluded that the club “committed serious breaches” of financial regulations and has banned it from participating in the Champions League for two years. Manchester City must also pay a 30 million euro fine.
To find out what, specifically, Manchester City did, and whether or not the Houston Astros were involved, please refer to this handy guide.
What did Manchester City do to earn this punishment?
Cooking its books, basically. According to a statement released by UEFA, the 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.”
What are the Financial Fair Play Regulations?
In 2011, UEFA instituted a set of rules to improve the financial health of European soccer teams after a review had found that a majority of clubs were operating at a loss. In essence, the regulations force teams to better offset the money they spend on wages and player transfers with income generated from things like ticket revenue, sponsorships, media deals, outgoing transfers, and pie sales (in England, at least).
How did Manchester City break those rules?
In 2008, Abu Dhabi royal family member Mansour bin Zayed Al Nahyan bought Manchester City and immediately started splashing cash on superstar players and their exorbitant wages. He was totally cool with losing money to win, but his hobby went against UEFA’s Financial Fair Play Regulations. Soon after those were passed, Etihad Airways (of Abu Dhabi) significantly upped its sponsorship deal to about 67.5 million pounds annually, which helped balance Manchester City’s books.
What’s wrong with that?
Mansour bin Zayed Al Nahyan’s private equity company owns both Etihad and Manchester City. The sponsorship deal wasn’t really worth all that money, and UEFA investigated the club for self-dealing and deceptive financial reporting.
So it’s just like the Houston Astros sign-stealing scandal.
Yes. An Emirati royal using his international airline to deceive UEFA is the soccer equivalent of banging on trash cans in the dugout.
Were the Astros involved in any way?
UEFA didn’t mention them by name, but there’s no way of knowing for sure.
How did Manchester City get caught?
Emails, naturally. A Portuguese man named Rui Pinto released a trove of files, dubbed the “Football Leaks,” over a four-year period starting in 2015. (He was arrested last year and is facing 147 charges in Portuguese court.)
In one of the emails, an executive with the Abu Dhabi United Group wrote that Etihad only made a limited “direct contribution” worth around 8 million pounds for the sponsorship deal while the private equity fund paid the rest.
Can I guess the subject line of the email?
Go for it.
Was it “Info re: sponsorship shenanigans”?
Close. It was “Cashflow.”
A two-year ban from the Champions League and a 30 million euro fine is a pretty hefty punishment.
It is. Manchester City has never won the Champions League, and the competition is the ultimate prize for the club’s ownership. That they’ll have to sit out for two full years must really bake their beans. The 30 million euros, meanwhile, is less than what they’d spend on a second-string left back.
So, that’s the end of that, huh?
Nope! The club has already announced that it plans to appeal UEFA’s ruling at the Court of Arbitration for Sport “at the earliest opportunity.” In the meantime, Manchester City is still competing in the Champions League this season. They play Real Madrid in the Round of 16 on Feb. 26.
Do you think the players will be extra motivated? Or will they be distracted by all this drama?
Are you actually curious? Or are you just planning to bet on the match?
Those aren’t mutually exclusive.
Good point. Count on them being motivated and distracted, which should be good for a 2–2 draw.