Man City Guilty Verdict: Points Deduction, Relegation & Huge Claims
Manchester City have been found guilty of major financial rule breaches, but what happens next, and how severe could the punishment become? Ben Jacobs breaks down the Manchester City verdict, the club’s potential appeal, possible points deductions, transfer bans and relegation scenarios, plus the compensation claims that could follow from Premier League rivals including Manchester United, Liverpool, Arsenal and Tottenham. The independent panel’s findings include significant breaches of financial rules, questions around sponsorship revenue, payments to players and managers, and failures to cooperate. Manchester City continue to deny wrongdoing and have the opportunity to appeal before the case moves toward a separate sanctions hearing. Ben Jacobs also examines how any punishment could be structured, whether sanctions could stretch across multiple seasons, the potential involvement of the EFL and independent football regulator, and why the Premier League wants the case concluded as quickly as possible. Chapters: 00:00 Manchester City Verdict: What the Ruling Says 02:27 The £950M Sponsorship Findings Explained 04:27 Possible Punishments: Fines, Bans & Points Deductions 06:27 Could Manchester City Be Relegated? 09:05 Rival Clubs Prepare Potential Compensation Claims 11:09 Could Punishments Stretch Across Multiple Seasons? 16:52 What Happens Next: Appeal, Sanctions & Arbitration ManchesterCity PremierLeague Football Subscribe! https://www.youtube.com/user/GiveMeSport Follow GiveMeSport! Facebook: https://www.facebook.com/GiveMeSport/ X: https://twitter.com/GiveMeSport Instagram: https://www.instagram.com/givemesport/ TikTok: https://www.tiktok.com/@givemesport Our Website: https://www.givemesport.com/ For copyright matters please contact us at: legal@givemesport.com
Transcript
Hello and welcome along to the latest of my GMS newsletters dedicated to the Manchester City charges. That's the big talking point. We'll look at what they are and what is next. It's great to have your company. Sign up and get this information in your inbox or alternatively watch here on YouTube. And market madness is back regularly now as we build up to the winter market. Now, yesterday I was in Copenhagen at the EFC European Football Clubs General Assembly. I'm still here now, by the way. And so was Ferran Soriano, the Manchester City CEO. And he was asked by us reporters whether he had any comment to the Manchester City charges. He said, "No." Sky News in particular got an excellent video where they confronted Soriano after the independent panel's verdict was out. And it confirms what we've reported before. But now we can read the 40-page judgment. That City are almost entirely guilty of these charges. They are guilty of all the serious breaches of the financial rules. And they are majority guilty of non-cooperation, which in short can increase the severity of any potential punishment. Now, City deny any wrongdoing. We need to reflect that very clearly. And they have until the 2nd of October if they wish to lodge an appeal against the verdict. That's phase one. Then there'll be a separate sanctions hearing. And City or the Premier League can appeal that as well. The general protocol is 14 days after either a verdict in this case or a sanction to make an appeal. And then after you've lodged it, 12 weeks for the appeal to run its course. So we are still in territory where this could be resolved this season. And when we get to a potential punishment, it's usually, according to protocol, given immediately while the appeal is ongoing. And that's significant as well. And my understanding is that Premier League clubs are set to write to Richard Masters and stress this needs to be concluded this season, especially now all of the information, or most of it, is laid bare. I'd encourage you to go to the Premier League website, where you can read a redacted version of the 40-page judgment. Some of the highlights, 27 witnesses gave, quote, false evidence they knew to be untrue and dishonest. Manchester City are accused of, quote, sham commercial agreements. So, between 2009 and 2018, City claimed nearly 950 million in sponsorship revenue, and yet only 120 million is concluded to be true sponsorship income. The rest, about 830 million, was paid by Abu Dhabi United Group Investment and Development. That, essentially, is Manchester City's own owners. Now, Ferran Soriano sent a video to Manchester City staff, which is over 3 minutes long. And he states the whole case is based on this one single, quote, false accusation that City's owners paid themselves during the years in question. The independent panel disagree. In addition, you have player remunerations that were concealed. You have manager payments, most notably Roberto Mancini's case, where the former City boss was given a secondary consultancy fee on top of his Manchester City wage for work done for Al Jazeera off book. The player in question is largely viewed as Yaya Touré based on previous leaks, but we should point out that in the official ruling, names are all redacted at this stage, perhaps because Manchester City feel revealing those names will prejudice this key period between verdict which could be challenged and sanction hearing. City are deemed to be in quote significant breach of PSR and UEFA rules. There's issues around how they handled image rights of players and there are these non-cooperation charges. So, if we get to punishments, you've got this sliding scale of fines, warnings, suspended punishments, transfer bans, points deductions, and at the very extreme, expulsion from the Premier League. And the Premier League now can play prosecutor and recommend a punishment, but if we get to that point, cuz remember, first we have to see if City challenge the verdict, it's the independent panel that will decide, subject again to another appeal process. But things should start to move quicker now. There's an acknowledgement from the Premier League this case took a lot longer than they would have hoped. There's the same acknowledgement from the panel who say it was complicated because not every witness cooperated and there were over 7,000 transcripts of different statements from either side. But we're now in a position where it's all laid bare and it's a damning report and the Premier League will see this as big victory and they now seek to turn it into a punishment. And if they succeed and are satisfied, then this will also be a strong reflection of the Premier League's ability to self-govern in light of now an independent regulator also being active, which was not the case when this legal matter first began. So, you have City who say they will be relentless and still believe that they can be proven innocent. You have Pep Guardiola who's thrown his support behind the club. Of course, Enzo Maresca will now be asked on it in the coming days after the international break. And City go to Anfield where no doubt they will get a hostile reception. In addition, when you look at the punishments, we now have to understand where there's precedent and where there isn't. So, for example, with the PSR charges, Everton and Nottingham Forest informers with a kind of algorithm for a potential points deduction of City's PSR breach when things are recalculated is equivalent. You would imagine the Premier League will put forwards a similar points deduction. If it's more severe, they'll want a higher number. And we could get to a scenario where City have so many points deducted that they are either almost or definitely relegated mathematically subject to any appeal. And there'll be pressure in some ways because as soon as any potential punishment is active, it's a race against time between now and the end of the season or the summer to make sure that this is fully closed. City would have the ability for other arbitration. There are lawyers who say they will have a route to the High Court, but there's also a very specific bar for different kinds of appeal. Significant factual error or gross misconduct, a bias from those making the decision, fraud, but they can't simply represent the same evidence and expect a new case. Nor can Manchester City go to the Court of Arbitration for sport. So, that's all worth noting. Then, we have the potential repercussions in different other areas. The Independent Football Regulator have issued a statement today. And although they don't wish to comment in any great detail, the chair of that Independent Football Regulator, David Cogan, has said, "The Independent Commission's decision against Manchester City raises serious issues." I'm reading from the statement now. "The IFR has powers to assess the suitability of owners, directors, and executives, and we will use these powers where appropriate in the interests of protecting the sustainability, honesty, and integrity of English football where there is clear evidence of wrongdoing by individuals. This includes taking account of findings made by leagues. However, as proceedings remain ongoing between Manchester City and the Premier League, we will await further developments. We hope it can be resolved quickly for the sake of fans. For now, we have no further comments." And that sentiment is echoed by the clubs as well. They want this rapidly resolved, and that will also allow them to gauge where they stand regarding compensation. Manchester United and Liverpool, Tottenham and Arsenal have all pre-written to City to reserve their right to potential damages subject to the final outcome and any appeals. And this could be for missing out on Champions League football or silverware. And sources say it may be to the tune of 100 million or more each. There's again some precedent when Everton had to pay Burnley around 34 million in compensation. But, the Premier League may realize Pandora's box is opened if it gets to damages. Any club could say "City out the league, we'd have been bumped up a place, we want more prize money." Maybe clubs got relegated and if you remove City's results from the league, the points tallies would have been different. Teams that missed out on Champions League football, teams that were unable to win silverware in seasons where City did. And when you add all of that up together, a lot of sources feel that the number would be in the billions and quite hard to handle if everyone's taking a swing at City legally speaking. So, instead the Premier League could choose to centralize compensation on behalf of their members past and present and that would be very interesting. Then you have the EFL. They could get involved if expulsion became on the table. It is a doomsday scenario, of course, so we should be fair to City and keep pointing out that they believe they're innocent even after this independent panel's damning verdict has been published. But, expulsion is complicated because there's no guarantee the EFL reading all the evidence in that scenario would say "City can just fall into our pyramid." A points deduction is a bit cleaner because it's a sporting sanction impacting the season and then if City were relegated because of it, they would naturally fall down with less disruption both in football and legal terms. And yet, there are some sources I speak to that feel City should almost have a deceleration to the project. And as a consequence, if the total potential points deduction or whatever the punishment may be has impact, it would be more beneficial to watch over a period of years City have to navigate multiple transfer bans, points deductions that could total a large number but be split across multiple seasons to allow effectively the Premier League to gain more parity. Because a club like Newcastle United, for example, may argue, and this is certainly what I get when I speak to fans, which I think is fair to reflect in this piece. City circumvent the financial rules as of now based on the independent panel's report and subject to appeal. PIF have got just as much money if not more as City's owners, and yet they've been restricted by abiding by the rules, and it's actually had a negative impact on spending power because the money's there, but the financial rules don't really allow Newcastle as of now to break into this big six. Whereas City were able to build a model and become a member of the big six at the expense of other clubs. So, should the punishment actually see Manchester City hampered over multiple seasons rather than just one. And this is particularly pertinent when we get into points deductions. And again, we're saying if because City still deny that there's any wrongdoing and will fight relentlessly as their statement put it. And I'm trying to be as balanced as I can in explaining everything because I know a lot of City fans will be watching and saying it all spins very negative and worst-case scenarios. So, there is that sliding scale of punishments. But in essence, if the algorithm, which won't be thinking of league seasons and games and potential points, it will be a more dispassionate calculation, came to a number where City were relegated and there were points to spare, those points and any other potential punishments could all be swallowed up in one season. And that might be the fair conclusion. However, some other clubs that I speak to, sources say if there's points that don't have a material impact, then they should spill over to the next season or even an opposite opinion from a City source is that they should be given a fighting chance in any given season, not automatically relegated, and as a consequence it should be a smaller seasonal points deduction if it comes to that under PSR, but one that still allows them to stand a fighting chance of staying up or even better than that, and then season on season you eat up the points, which would be divided across multiple seasons and a smaller deduction in any given season. And there's no precedent here in football and in Premier League terms anyway. So, City could argue that there should be a maximum seasonal cap of points to allow them the opportunity of still standing a fair chance in sporting terms of having things to play for. And a lot of people be hearing that and saying it's too lenient, it's too mild. Of course, these are just opinions of what people in the industry think should be a fitting punishment. More important is what the Premier League put forwards and what the panel decide. But, when I was in Copenhagen, I was speaking to some club sources, not just from the Premier League, but from Europe's big five leagues. And they were saying if City are deducted too many points, then as much as a lot of the rivals might celebrate that and feel vindicated, the integrity of the Premier League comes under question as well. Because what happens when City play? Do they field a load of kids? Are the games meaningless? Are they motivated? Are they going to put all their focus on European competition? These will all be considerations. And the very integrity of not just City, its brand, its club, its future is at stake at one extreme and from one set of lawyers, but the Premier League's own brand and reputation, too. And you have one school of thought, which is the lawyers drive everything, and the punishment must fit the crime. But there'll be people more on the sporting side of the Premier League or the governance side or the commercial side that realize City add value as one of the biggest players in this league, and they bring in money, as well. And that will be part of this debate about can the Premier League self-govern and be its own operator commercially, and are there conflicts of interest in all of this? Not in the sense of coming to a punishment, but just different perspectives and different chains of accountability that all feed back to Richard Masters. And a lot of different input will be saying, "We think the best outcome is this." At one extreme on the legal side, and that will of course be punishment-focused and winning the case, versus some of these other considerations around integrity, around how you allocate a punishment to make it fit the crime, about whether that should be something in one go or spread across multiple seasons, and then all these interlinked things about the reaction of the clubs, and they'll be inputting to the Premier League, and then how the Premier League will also be accountable to bodies outside of it and maybe even work with them, such as the FA and the independent regulator, and UEFA, as well. So lots of considerations and lots of fallout. But again, brief summary, the verdict shows Manchester City to be guilty on all material charges. And the only parts they're not guilty on are some of the non-cooperation, but even there, they in majority have not cooperated. They've got until the 2nd of October to appeal the verdict. The next phase of this goes into a sanction hearing, but that could be altered by Manchester City's potential. And I think it's fair to say, likely appeal. Then after that sanction or punishment, another opportunity for City or the Premier League if they don't like the outcome to appeal. The Premier League handbook aims for these appeals to be done in 12 weeks, but this verdict shows us that timelines are to an extent thrown out the window. And that's not to say they won't work with that intense and that honesty to get it done according to the rule book, but it is just a really complicated case. And all sides need fair time to prepare and pitch their side. And then after that, Manchester City could enter into another form of arbitration. They just can't go to CAS. In theory, they could try and come all the way back full circle and say we want to uber cooperate and then find a settlement, which is what Chelsea did, but very different cases. And then finally, we have these other repercussions. The impact on the football team depending on what the punishment is, how other clubs will react, and damages, independent football regulator if they'll get involved, the same for the FA as well. So, this has got quite a bit to run still. City maintain their innocence. The Premier League view this as a big victory. The report itself shows clear guilt, cheating, and sporting advantage. So, City have got a lot of work to do to change that. And now, as we read each of the charges, we see the full scale including several big financial numbers all laid bare. Witnesses giving false testimony, sham commercial agreements, inflated revenue, hidden payments to players and managers, and significant, that was the Premier League word. Breaches of both PSR and the UEFA rules. City will fight on, but the Premier League are confident of victory even though this has got quite a few legal steps and maybe some twists and turns to come. Let me know what you think of this case and the verdict if you've read it. It's available on the Premier League website. Put your thoughts in the comments, but for now from myself Ben Jacobs, thanks for watching.