Manchester City breaches: what is FFP and what might be the consequences?

Rohan Banerjea

On the 6th of February 2023, the Premier League announced that it had “referred a number of alleged breaches of the Premier League rules by Manchester City football club.” This was shocking news at the time, especially after the club had only spent £8m in the Winter transfer window, compared to Chelsea’s spending of nearly £300m. It turns out that the breaches in question included one hundred instances between 2009 and 2018, with Manchester City winning the Premier League 3 times in this period.

But what is financial fair play (FFP) and why does it exist?

There are two main reasons why there are financial fair play rules in the Premier League. The first reason is to decrease the disparity between Premier League clubs and EFL clubs, a wage, revenue, and investment gap that has been increasing since before the Premier League began in 1992. The estimated weekly average EFL championship wage in 2022/23 is £10,000, whereas Premier League players receive an estimated weekly average wage of £60,000. The contrast is largely due to broadcasting contracts overseas, which the Premier League mainly benefits from. UEFA’s financial fair play rules was an attempt to reduce the disparity between a country’s first and second division, therefore in theory making the league pyramid more competitive.

The second reason financial fair play rules are in place is to prevent clubs from going bankrupt. In February of 2010, Premier League club Portsmouth faced a deduction of nine points which would guarantee their impending relegation due to the club going into administration. The club was estimated to be £70m in debt, and four potential buyers of the club didn’t submit the final paperwork. Usually, clubs have been bailed out, even when in lots of debt, and the leagues and FA have lost out as a result. Portsmouth were able to finally avoid liquidation by being bought by the Pompey Supporters Trust, which meant that all the club’s previous debts were written off. Another example is Bristol City in 1982. Following two relegations in the previous two seasons, the Robins looked like getting relegated again. At the beginning of the year they were in £850,000 of debt, while losing £4,000 every week. Liquidation seemed unavoidable as the club was looking closer and closer to collapsing. But Geoff Merrick, Jimmy Mann, Trevor Tainton, David Rodgers, Gerry Sweeney, Peter Aitken, Chris Garland, and Julian Marshall, together known as the Ashton Gate Eight, all agreed to terminate their contracts, which kept the club alive. Again, all the club’s debts were written off, meaning both Portsmouth and Bristol City survived without paying any of their debts.

These examples only incentivise clubs to spend even more money, because if the club has a large enough contingent of supporters, it is very unlikely that the club will go into liquidation. Since the example, rules around administration have changed, but the main change to reduce over-spending and increasing debts is the introduction of financial fair play rules.

UEFA’s financial fair play rules allow clubs to have losses of €60 million over 3 years. Clubs are also not allowed to spend more than 70% of their total revenue on wages, transfers, and agents’ fees. Due to the club revenue gap between divisions, UEFA’s rules seem to be more focused on reducing club debt and preventing administration.

So how did Manchester City break these rules and what might the consequences entail?

Manchester City have been accused of failing to provide accurate financial information in the period between 2009 and 2018. More specifically, they have been accused of hiding the financial remunerations made to one of their managers for four years. The four year period might suggest that the manager in question was Roberto Mancini.

The club has also been accused of breaking UEFA’s financial fair play rules for five years, and the club allegedly did not cooperate during the Premier League’s investigation.

In 2020, Manchester City were accused by UEFA of failing to follow the rules, being threatened by a £26.8 million fine, and a two year ban from UEFA competitions. However, having taken the case to the Court of Arbitration for Sport, the alleged breaches had happened too long before and therefore actions couldn’t be taken other than a meagre £8.9 million fine. However, a time bar will not save the club this time, as Premier League rules do not include a time limit of 5 years.

Following the breaches, the Premier League could choose to:

• Deduct points

• Expel the club from the league

• Force the club to replay league matches

• Suspend the club

• Refuse to register players

• Fine the club

• Or anything else it wants

Manchester City, following the 2008 takeover by Sheikh Mansour, look to be in a lot of trouble, and the matter is expected to take a long time to be settled. Financial fair play rules are there to save clubs from administration, but if City are found to be guilty and punished severely, they may need an Ashton Gate Eight of their own.