Manchester City charged with Breaches of Premier League’s Financial Rules

On 6 February 2023, the English Premier League (EPL) took the unprecedented step of charging Manchester City Football Club (Club) with over 100 breaches of its rules (Rules).

The Rules govern everything from player contracts to promotions and relegations. The Rules have, in more recent years, become increasingly focused on the ways in which member clubs are managed on a financial and operational level.

According to a statement on the EPL’s official website, the alleged breaches of the Rules cover the period between (and including) the 2009/10 and 2017/18 league seasons (nine consecutive seasons, a third of which were won by the Club).

What is the Club accused of?

In the context of the Rules, the charges are broken into five separate categories:

1. Provision of “accurate financial information” reflecting a club’s position, such as regarding “revenue (including sponsorship revenue), its related parties and its operating costs.”
2. Provision of details of player and manager remuneration “in its relevant contracts.”
3. Compliance with UEFA’s regulations, including UEFA’s Club Licensing and Financial Fair Play (FFP) Regulations.
4. Compliance with the Rules in relation to “Profitability and Sustainability” during those seasons.
5. Cooperation and assistance with the EPL’s investigations.

What happens next?

As a result of these charges, the Club has been referred to a “Commission,” a three-person, independent disciplinary board, which includes a qualified accountant or auditor (where breaches relate to finances – see Rule W.18.4) and a “legally qualified” chairman (W.19). A hearing before the Commission will take place, which will be “confidential and heard in private.”

If it finds the Club guilty, the Commission has wide-reaching powers. It can, among other things (see Rules W.51.1 to W51.10 inclusive):

1. "reprimand” the Club;
2. impose an unlimited fine;
3. suspend the Club from playing matches (including first team, development or youth team games) for an indefinite period;
4. issue points deductions in respect of the matches at point (c);
5. recommend that a match or matches be replayed;
6. recommend that the Club be expelled from the league;
7. order the payment of costs and expenses of the Commission; and
8. “make such other order as it thinks fit”, which could include the stripping of titles won during any affected period.

If any charges are proven, can the Club appeal?

In February 2020, the Club was sanctioned by football’s European governing body, UEFA, for “serious breaches” of FFP between 2012 and 2016. UEFA issued the Club a fine of €30 million and a two-year ban from European club competition. However, the ban was later overturned and the fine reduced to €10 million by a panel of three lawyers at the Court of Arbitration for Sport (Cas).

Cas found that the Club failed to cooperate with the investigations by UEFA’s club financial control body (CFCB), which oversees FFP compliance, and imposed the reduced fine for that. The panel said that the Club had shown a “disregard” for the principle that clubs must cooperate with a governing body’s investigations and conducted an “obstruction of the investigations”. However, on the central finding by the CFCB’s adjudicatory chamber that the Club’s Abu Dhabi ownership had disguised its own funding as independent sponsorship by the state’s commercial companies, Cas found: “Most of the alleged breaches were either not established or time-barred.”

However, as these new charges have been brought by the EPL and not UEFA, the Club’s (or indeed the EPL’s) right of appeal against a decision of the Commission would be to an independent “Appeal Board” (see Rule W.62.1) of three new independent members of the EPL’s Judicial Panel, and not Cas. The reason for this is that Cas is based in Switzerland, which does not have jurisdiction over the EPL’s process.

Beyond that, the parties would need to use the arbitration route in respect of “Disciplinary Disputes” (Rule X.3.1). However, the only grounds for reviewing a decision of the Commission or Appeal Board with arbitration (X.4) are limited to where the decision was:

1. reached “outside of the jurisdiction” of that body;
2. reached as a “result of fraud, malice or bad faith”;
3. reached due to procedural errors so great that it substantially prejudiced the rights of the applicant;
4. reached due to a perverse interpretation of the law; or
5. one which “could not reasonably be reached” by a body which “applied its mind properly to the facts”.

In addition, appeals to the court regarding an arbitration award can only be made on a point of law. It is therefore fairly unlikely that the Club or EPL would have recourse beyond the Appeal Board in these circumstances.

Our Sports, Media and Entertainment team will continue to look for developments on this matter and share additional insight as things progress.