Agreements were \u2018shams\u2019<\/p>\n
The independent commission\u2019s \u201ccore decision\u201d is a 40-page document which appears to confirm the worst interpretation of Manchester City\u2019s behaviour. Central to the finding that the club were guilty of all charges of breaching the Premier League\u2019s financial rules is the conclusion that City\u2019s lucrative sponsorship arrangements were \u201cshams\u201d<\/a>.<\/p>\n When a member of the Abu Dhabi royal family, Sheikh Mansour bin Zayed al-Nahyan, bought the club in 2008 he set out \u201cambitious plans\u201d for City. But those ambitions could not be met by the finances then being generated. \u201cThe club appreciated from the early days of [Mansour\u2019s] ownership that very significant funds would be required if the steps needed to realise \u2026 ambitions were to be fulfilled,\u201d the commission said.<\/p>\n In the first instance the club relied on extra injections from Mansour, or \u201cowner equity\u201d. But according to the commission: \u201cThe club recognised that [this] was not a sustainable model\u201d, and that with owner equity to be excluded from financial fair play rules it \u201cneeded to grow its commercial operations\u201d. One way of doing this, the club decided, was to \u201cseek high-value sponsorship arrangements in the UAE generally and in Abu Dhabi in particular\u201d.<\/p>\n Graphic showing Manchester City\u2019s \u2018sham\u2019 commercial\u00a0deals<\/a><\/p>\n What resulted was what the commission call the \u201cDisguised Funding Scheme\u201d (DFS). Traditional sponsorship valuations would not be enough for City to meet their ambitions and forestall financial losses. So City applied a different approach. In the words of the commission: \u201cThe club would enter into sponsorship agreements with Abu Dhabi sponsors which contained substantial [fees] at well above fair market value. However, the sponsor would not be liable to pay the recorded sponsorship fee, and would not do so.\u201d Instead the sponsor would pay only a small percentage of the fee, described by the commission as the \u201cbase sum\u201d. The rest, or the \u201ctagged sum\u201d, would be paid for by Mansour, or at least the company that he had formed to control City, the Abu Dhabi United Group (ADUG).<\/p>\n The DFS, the commission said, allowed the club to state that \u201cits commercial revenues from Abu Dhabi sponsorship agreements (and so its income generally) were far, far greater than was in fact the case\u201d, and also \u201cconceal from third parties the true extent of the equity contributions in fact being made into the club by ADUG\u201d. As a result, it said: \u201cEach of the Abu Dhabi sponsorship agreements was a sham.\u201d<\/p>\n City had argued in their defence that sponsors had paid all the money but that the sponsors had required, \u201cfrom time to time\u201d, financial assistance from the Abu Dhabi government and its crown prince court to meet their sponsors\u2019 obligations. City\u2019s argument therefore was that although money was given by the Abu Dhabi government to sponsors, the club was not involved.<\/p>\n The scale of the funding<\/p>\n The commission calculated that, over the course of the nine seasons<\/a> under investigation, from 2009-10 to 2017-18, City had booked \u00a3949.94m in sponsorship revenues from Abu Dhabi-based companies. Of that total, only \u00a3119.25m had been paid in \u201cbase fee\u201d. The rest, \u00a3830.69m, were \u201ctagged sums\u201d paid by ADUG to the club.<\/p>\n By some estimates, the \u00a3830m accounted for as much as 30% of City\u2019s revenue over the period of the investigation. It was a sum far greater than the total revenue of most of their Premier League<\/a> rivals. The scale of the funding also grew heavily over time. In 2009-10, the commission identified \u00a322.5m in \u201ctagged sums\u201d paid by ADUG. By the 2017-18 that figure had risen to \u00a3134.73m, the highest total across the seasons under investigation.<\/p>\n Manchester City fans show their appreciation for their wealthy owner in 2014. Photograph: Matt West\/BPI\/ShutterstockThe knock-on effect<\/p>\n The commission broke the charges into four blocks and once the first had been proven \u2013 relating to the provision of accurate financial information \u2013 a domino effect ensued. Blocks two and three related to City\u2019s requirement to meet the financial rules of first Uefa then the Premier League. Removing the \u201ctagged sums\u201d from any balance sheet meant that City had failed to comply with either set of regulations \u201cin any of the seasons\u201d under which they were charged.<\/p>\n The submission of inaccurate financial information meant that City were also in breach of group four of the charges, relating to the \u201cduties of cooperation\u201d it owed to the Premier League. But City\u2019s behaviour went further in this regard. The commission found that the club had \u201cmade concerted efforts to stop and frustrate the Premier League investigation\u201d and had \u201cconcocted\u201d explanations for the DFS \u201cwell after the event in an attempt to obscure and conceal the reality\u201d.<\/p>\n Dishonest witnesses<\/p>\n The commission also made damning comments on the behaviour of witnesses called by City during the hearings. \u201cEvidence given by a number of important factual witnesses called to give evidence on behalf of the club was false in a number of key respects,\u201d the commission wrote, arguing that some of falsehoods had been deliberate. \u201cCertain of those factual witnesses had given evidence at the hearing that they knew to be untrue and so had been dishonest,\u201d it said. Also contained in the verdict is the detail that, in the event of City being found guilty, the Premier League had reserved the right to challenge \u201cadditional and perhaps more egregious acts of non-cooperation\u201d relating to City\u2019s behaviour during the League\u2019s own investigation.<\/p>\n Further wrongdoing<\/p>\n Further, smaller charges were proven against City. Payments \u201cnot recorded in an employment contract \u2026 but instead recorded in a consultancy agreement\u201d, totalling more than \u00a315m, were found to have been made to three former employees, understood to include Roberto Mancini and Yaya Tour\u00e9. Equally, a scheme known as the \u201cFordham arrangement\u201d, was shown to be another sham whereby City sold their players\u2019 image rights to a third party which was \u201cin reality little more than a front for ADUG\u201d.<\/p>\n The only charge City were cleared on related to one subset of the club\u2019s obligations to act \u201cin the utmost good faith\u201d towards the Premier League.<\/p>\n Roberto Mancini (right) and Yaya Tour\u00e9 (centre) were found to have had payments not recorded in their employment contracts. Photograph: Marc Atkins\/ShutterstockNo love lost<\/p>\n The commission describes the case as having been \u201cfiercely contested\u201d and there is no sense of either side pulling their punches. City were revealed to have sought to dismiss the Premier League\u2019s investigation, its decision to charge the club and its decision to prosecute the charges. The verdict was published after one party failed in an attempt to keep it private. \u201cThe proceedings were at all times extremely hard fought on both sides,\u201d the commission said. \u201cWe in no way mean that as a criticism of either party; it is simply fact. No stone was left unturned.\u201d<\/p>\n The competitive nature of the proceedings will have been a key factor in turning the case into such a substantial endeavour that the verdict could be published only more than two years after proceedings began. The commission said evidence submissions ran to \u201cmany, many thousands of pages\u201d, the core bundle of documents to \u201ctens of thousands\u201d of pages, and even the index to the documents used in the hearing was 1,000 pages long.<\/p>\n \u201cIt has taken us much longer than we would have wished, and much longer than we had anticipated would be the case when the hearing concluded, to produce our decision,\u201d the commission wrote. \u201cThat is regrettable.\u201d<\/p>\n The submissions are likely to continue given City intend to appeal against the decision before Friday. The commission must also meet to decide upon its sanction.<\/p>\n What do City say?<\/p>\n The club continue to deny wrongdoing. City have said they will appeal \u201con the basis that the opinion contains clear material errors, of law, principle and fact, and is unsafe\u201d. Their chief executive, Ferran Soriano, said in a video to employees that the decision was based on a \u201cPremier League conspiracy theory\u201d<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Agreements were \u2018shams\u2019 The independent commission\u2019s \u201ccore decision\u201d is a 40-page document which appears to confirm the worst…\n","protected":false},"author":2,"featured_media":787131,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[59,101,56,54,55],"class_list":["post-787130","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sports","tag-gb","tag-sports","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/787130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=787130"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/787130\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/787131"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=787130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=787130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=787130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}