Manchester City 900m Finding and Legal Bill
The Tide Runs Out On a Decade of Books
The panel concluded that City had arranged “sham” contracts to boost revenues to comply with spending rules. The number that matters now is not a transfer fee but a legal bill, and no final figure has been put on it yet. If the finding holds, a revenue figure becomes something a commission can rewrite, and the price of getting it wrong becomes a stated sum. If the appeal City has promised succeeds, the finding falls. Both futures are open, because a compensation ruling and an appeal are both still ahead. The Premier League announced on Tuesday that an independent commission had determined Manchester City artificially inflated their income by £900m over a nine-year period.
The panel concluded that City had arranged “sham” contracts to boost revenues to comply with spending rules. The breaches examined sit between 2009 and 2018. The rules in question are the Premier League’s own financial rules, and the breaches examined sit between 2009 and 2018. This is not a finding about a single payment or a single season. It is a finding about a pattern of contracts, and about what that pattern did to a balance sheet that had to satisfy a spending limit.
In a 40-page document, the independent panel explained why it found City guilty of all charges related to serious breaches of the Premier League’s financial rules. It also found the club guilty of “the majority of charges in relation to its failure to cooperate with the league’s investigation”. Those are two different kinds of failure. One concerns what the accounts said. The other concerns what the club told, or did not tell, the people checking the accounts. The commission that heard the case is also the body that will rule on the compensation figure. So the same panel that weighed the evidence will weigh the bill.
City maintain their innocence. In a statement the club claimed that “a comprehensive body of irrefutable evidence exists” and said it intends to appeal. It described the ruling as an “opinion” containing “clear material errors, of law, principle and fact, and is unsafe”. The club’s chief executive, Ferran Soriano, sent a three-minute video to club employees describing the outcome as a “Premier League conspiracy theory”, according to the Guardian. Two public positions, then, and no agreed set of facts between them: a guilty finding on one side, a promised appeal and a claim of irrefutable evidence on the other.
The Flood Tide Carries A Legal Bill
The Premier League’s costs are expected to be upwards of £70m, and both sides together are predicted by legal experts to have spent more than £100m. Manchester City are expected to owe the league tens of millions of pounds in compensation for legal costs. A winning party can expect to recoup around 70% of its legal costs from the losers. That would put the league’s recovery close to £50m. The commission will rule on the compensation figure once the process has been completed.
City employed Lord Pannick KC, one of the country’s leading lawyers, who has advised the former prime minister Boris Johnson. The Premier League’s team was spearheaded by Adam Smith KC, considered one of the finest sports lawyers of his generation, who has represented the league, the Football Association and Uefa in a series of cases. Two of the most senior advocates in the country, briefed on opposite sides of one dispute. The bill reflects that labour market. The case has lasted eight years already and is still not concluded. Eight years of disclosure, witness statements and argument, billed at the rates the top of the profession charges. The verdict is therefore not the end of the matter; it is the point at which the meter is read.
The commission will determine if the Premier League’s legal spending was proportionate to the case. Proportionality is the hinge here. It can accept the argument that a case was fought more expensively than it needed to be. That question has been asked and answered before, in a smaller case, and the answer was not generous. So the near-£50m figure depends on a judgment the panel has not yet made.
After Everton were found guilty in 2023 of profitability and sustainability rule breaches, the league pushed for £4.9m in costs but was awarded £1.7m. The cut followed a successful argument by the club’s lawyers that the legal costs were too high. Everton’s lawyers had claimed the cost per document disclosed was 19 times higher for the Premier League than for the club. The cost per witness statement, they said, was five times more. The gap between the £4.9m sought and the £1.7m granted shows how far a claim can fall. On the record so far, the near-£50m is a request, not an outcome.
Slack Water And The Shape Of Punishment
Manchester City were found guilty of 114 of the 115 charges levelled at them by the Premier League in February 2023. The commission has not yet published the punishment. Now the conversation has quickly shifted to the potential punishment. Could City be relegated, and their owners forced to leave? A rolling points deduction, a transfer ban, or a fine? Those questions are open, and the commission has not answered them in the material published so far. What the record does show is how English and Scottish football have punished clubs that broke financial rules before. The list is short, and no two entries look alike.
Ten days after Swindon Town beat Sunderland 1-0 at Wembley in the 1990 Championship play-off final to secure promotion to the old First Division, the club were found guilty of making illegal payments to players. Swindon were stripped of promotion and replaced in the top flight by Sunderland. They were sent down to the third tier. Tranmere Rovers were due to replace them in what is now the Championship. On appeal, the punishment was reduced to a one-division relegation. Tottenham Hotspur were fined £600,000, thrown out of the FA Cup and docked 12 points in 1994, after being found guilty of making illegal payments to players under their previous ownership. Alan Sugar was running the club by then, and Spurs had informed the FA themselves. On appeal, both the cup ban and the points deduction were overturned, although the fine was raised to £1.5m.
Luton Town’s 30-point deduction remains the largest in English football history. The club had initially been docked 10 points ahead of the 2008-09 season and fined £50,000. It was then found that Luton had broken the EFL’s rules by leaving administration without having made a Company Voluntary Arrangement with its creditors. The Football League offered the club the chance to keep playing in League Two on the condition of a further 20-point deduction. The appeal was thrown out, and Luton were relegated to non-league for the first time in their history, finishing bottom of the table. Rangers were denied entry into the Scottish Premier League in July 2012 because of the club’s liquidation. A vote of the chairmen of Scottish Football League clubs determined where they would land: 25 of the 30 chose the fourth tier. Rangers also received a 12-month transfer ban, and won back-to-back promotions before returning to the top flight in 2016.
Queens Park Rangers were ordered to pay a world-record £40m fine in 2017, after losing a three-year battle over breaching Financial Fair Play rules during the 2013-14 season, when they were promoted back to the Premier League. The club reached a settlement with the EFL the following year, agreeing to pay £42m. That settlement was made up of a £17m fine, the EFL’s legal costs worth £3m, and an agreement from club shareholders. Inside that settlement sat the same mechanism now running under the Manchester City ruling: a financial-rules case can end with the losing club paying the other side’s lawyers. The commission will rule on the compensation figure once the process has been completed. A commission publishes the £70m bill it was asked to approve, measures it against the Everton benchmark of £1.7m granted from a £4.9m claim, and issues a compensation figure. The commission will determine whether the Premier League’s legal spending was proportionate to the case. The Premier League’s costs are expected to be upwards of £70m. The commission will rule on the compensation figure once the process has been completed.
Mentioned organisations (context, not sources)
- Manchester City — Organisation (homepage)
- Premier League — Organisation (homepage)
- Everton — Organisation (homepage)
- Swindon Town — Organisation (homepage)
- Sunderland — Organisation (homepage)
- Tranmere Rovers — Organisation (homepage)
- Tottenham Hotspur — Organisation (homepage)
- Football Association — Organisation (homepage)
- Luton Town — Organisation (homepage)
- EFL — Organisation (homepage)