Manchester City face severe sanctions after being found guilty of serious breaches of the Premier League’s financial rules over a nine-season period.
Abu Dhabi-backed City were found to have arranged “sham” contracts with a number of commercial partners to artificially inflate the club’s revenues and reduce costs by more than £900 million (A$1.7 billion) between 2009 and 2018.
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In doing so they concealed the true state of their finances and avoided breaches of Premier League and UEFA spending limits as a result.
An independent commission also found the club guilty on the majority of charges in relation to their failure to co-operate with the league’s investigation.
No sanction has yet been imposed and City said they will appeal against the decision.
But the ruling will send shockwaves through English football, with City’s place in the Premier League now at risk and questions over whether titles could be stripped.
“The core decision establishes the facts of what happened at Manchester City during this period. It details how the club systematically broke Premier League rules for nearly a decade,” Premier League chief executive Richard Masters said in a statement on Tuesday.
“This disciplinary case, and this decision, are the most significant in Premier League history.
“Now we have the commission’s decision, we are committed to moving swiftly through the remainder of the process, to provide certainty for the league, our clubs and fans.”
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The commission found City arranged commercial deals whereby companies were only required to pay a portion of the relevant sponsorship fees.
The remainder was funded by Sheikh Mansour bin Zayed al-Nahyan’s Abu Dhabi United Group Investment and Development (ADUG), which owned the club.
Further arrangements, funded by ADUG, enabled the club to record lower operating expenses than they actually incurred.
As a result, City failed to accurately report income and expenditure for the purposes of the Premier League and UEFA’s financial sustainability rules.
The scheme was found to have inflated revenue by more than £830 million, using a system they called ‘Project Longbow’, according to the independent commission, while income from image rights was overstated by almost £74 million, with liabilities for staff contracts understated by nearly £17 million.
The commission found they would have breached spending limits “by a very substantial amount” if City had reported accurately.
In a damning 40-page document, the Premier League said it regarded City’s conduct as having “extremely serious, significant, sustained and intentional or reckless breaches of rules critical to the proper and fair operation of the Premier League”.
The document has detailed the scale of what the commission repeatedly called “sham” commercial deals the club made with a number of its sponsors.
They were part of a disguised funding scheme, whereby those companies were only required to pay a portion of the relevant sponsorship fees.
According to the commission, one company, “Fordham”, was “in reality little more than a front” for the Abu Dhabi United Group Investment and Development Ltd (ADUG), which owned the club, to plough in more funds.
The commission said: “In 2012 the club launched what it termed Project Longbow. “We accept the club’s explanation that Project Longbow was a multi-strand project whose purpose was to explore how the club might boost its revenues and reduce its operating losses.
“Many of the strands of Project Longbow were genuine, legitimate attempts to achieve those aims. One was not. That was the Fordham Arrangement.”
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– City set to appeal –
In addition, City were found to have “made concerted efforts to stop and frustrate the Premier League” during a four-year investigation.
The commission found that evidence given by several important factual witnesses on behalf of City was “false in a number of key respects”.
It added that “certain of those factual witnesses had given evidence at the hearing that they knew to be untrue and so had been dishonest”.
“It’s incredibly serious, the Premier League report is incredibly stark,” said the British government’s culture, media and sport secretary Lisa Nandy.
“Manchester City have the right to appeal. This is causing a lot of concern for City fans and all fans of Premier League football.”
Since a 2008 takeover from Sheikh Mansour, vice-president and deputy prime minister of the United Arab Emirates, City have become the Premier League’s dominant force.
They have won eight Premier League titles, four FA Cups and seven League Cups over the past 15 years and also won the Champions League for the first time in 2023.
But that same year they were hit by the Premier League with over 100 charges following an investigation into alleged breaches of rules.
The hearing by an independent commission started in September 2024 and concluded three months later.
City expressed “surprise” at the decision and vowed to continue fighting to clear their name.
“Manchester City FC will now pursue the appeal avenues open to it, on the basis that the opinion contains clear material errors, of law, principle and fact, and is unsafe,” the club said in a statement.
According to Premier League rules, the sanction can vary from a points deduction, a fine or even expulsion from the division.
Everton and Nottingham Forest were handed points deductions in the 2023/24 season for single breaches of financial sustainability rules.
On that basis, City would face likely relegation if the same penalty is applied for each of the over 100 charges.
“It is damning beyond belief. My immediate thoughts are, should the board continue? Should the people involved be suspended immediately?” the club’s former chairman David Bernstein told the BBC.
“Very, very serious. I think it’s really terrible. There’s a school of thought with lawyers that is deny, deny, deny, but this is a football club that is part of a league and the whole credibility of the league is at stake here.
“The sanctions cannot just be financial, so it’s got to be way beyond that. If the appeal fails, Manchester City cannot stay in the league, they have to suffer. And I say that as a supporter and a fan.”
Manchester City chief executive officer Ferran Soriano said on Tuesday his club will be vindicated after blasting the guilty verdict for breaching financial rules as a “Premier League conspiracy theory”.
In a video message to City staff, Soriano came out fighting against the Premier League decision.
“A document has been made public with an opinion of the Premier League commission which is negative to our interests,” he said.
“I want to explain exactly what this is, the next steps, and how we are going to continue to defend the club and finally be vindicated in this process.”
Insisting the Premier League have been given “irrefutable” evidence the charges should be dismissed, Soriano launched a vociferous defence of City’s case.
“This has gone on for so long that it’s important to remind ourselves that the whole Premier League case against us is based on a single false accusation; that the owner’s personal money was somehow and secretly put into the club via some sponsors from Abu Dhabi,” he said.
“This is just not true. Irrefutable evidence has been provided to the Premier League commission that shows that it could not happen and that it did not happen.
“This includes bank statements, money transfers, witnesses, and everything necessary to categorically demonstrate the money did not come from the owner.
“Every other false charge that has been thrown at us and aggressively marketed and promoted comes from that simple, central, and completely false accusation.”
– ‘We have been here before’ –
Soriano said City’s legal team would move into action to prove the Premier League verdict was “unsafe”.
“Surprisingly for us and for our lawyers, after nearly two years, the Premier League commission has issued an opinion that supports the Premier League’s conspiracy theory,” he said.
“To do so, the opinion had to actually ignore the extensive evidence provided by the club in order to reach a conclusion that is clearly wrong.
“Our lawyers will now file an appeal that sets out that the opinion contains clear material errors of law, principle, and fact, and it is unsafe.”
City successfully overturned a two-year ban from European club competitions, imposed by UEFA for breaching Financial Fair Play regulations, after taking the case to the Court of Arbitration for Sport (CAS) in 2020.
“Remember, we have been here before,” he said.
“In 2020, we were also wrongly ruled against for many of the same issues. We appealed to an independent body, CAS, and we won.
“We will now be relentless in our work. We will focus on the independent appeal process and also all other legal avenues available to us in order to win the case.
“And we will take all necessary action to protect the club and seek compensation from any party that tries to damage it, now and in the future.
“Very soon, we will look back at this and recognise it as another time in our history when we dealt with adversity, and overcame it together.”