For Valentine’s 2020, Manchester City received a very red card, not the typical love card though. A red card which sent them out of the running for the UEFA Champions League spot in the Premier League. The European football governing body have banned the English club from any continental competition for the next two seasons, in addition to giving them a £25m fine, the biggest they’ve ever given. The reason? A significant breach in Financial Fair Play rules, the financial body of the UEFA that keeps clubs in check throughout the old continent. Why is it so significant? It is the first ban of a kind, and it not only could truly establish FFP as a proper regulator of European football, one decade after being instituted. It could also have terrible repercussions on clubs who have recently been purchased by multi-millionaire investors, particularly Paris Saint-Germain, who has spent tremendous amount of money in the last 2 years particularly.
So, let’s break it down. What does FFP do? Financial Fair Play is an idea of ex-UEFA president, Michel Platini; in June 2010, it was agreed to be set up for the following season. Its intention is to regulate club expenses and try to avoid all the debts that European clubs had been amounting up to that point. Ultimately, Platini wanted to limit the inequalities between the clubs, with the richer clubs spending far more than they had and getting away with it, while smaller clubs could certainly not afford to pay the wages of players like Ozil and Pogba. FFP promoted discipline, sustainability and pushed clubs to be more responsible and accountable. Frankly, not everyone was impressed, they did not really believe it would be efficient or fair, but results started showing. UEFA declared “in the first five years following its introduction in 2009, both club losses and overdue debts of top division European clubs have been slashed, decreasing to less than 20% of the level before the introduction of the regulations.” It still had not convinced everyone but with the evolution of certain rules, the continent was starting to see the objective and accept it. FFP rules stipulate you can only spend a marginal amount more than what you earn in TV revenue, advertising (includes shirt sales), finance, player sales and prize money. The expenses include transfer fees, employee charges (including benefits, so basically player and staff wages), financial costs and dividends. Investment on infrastructure, training facilities and youth development is not included. The deviation that is permitted is 5 million euros, but it is accepted to have up to 30m if the owner injects the other 25 into the club himself. As the control is over the last three seasons, but the deficits count on one year. Transfer fees are spread out on the duration of the contract of a player, so a player costing £50m when he arrives for a five-year contract, will only cost £10m per season.
So, what was the first intervention of FFP? In 2014, they sanctioned the two new big clubs in town, both owned by Qatari investors, Manchester City and PSG. Both clubs received a 60m€ fine, 40m€ suspended, their UEFA squad reduced to 21 players, transfer spending restrictions and two years of squad salary restrictions. First big hit for FFP, first big blow for the two clubs who had been spending millions and millions for the past few seasons (since 2008 for Manchester, 2011 for Paris). In comparison, Chelsea’s transfer ban this summer was not related to FFP, although they could suffer consequences in the near future, but rather to their transfers of players that were minors when arriving at the club.
How did the ban come and what are they suspected for? There have been numerous leaked emails by German magazine Der Spiegel provided by Rui Pinto, who is currently being investigated at home in Portugal for a total 147 criminal offenses of computer hacking which he has so far denied. Taking one for the team clearly. An investigation was launched in March last year by the Investigation Chamber of the CFCB, with city saying these accusations were false and wanted to put lawyers on the case before the final decision was taken. The emails reveal that the main sponsor of City, Etihad, only contributes to 8m pounds of the 67.5m actually announced, with Sheikh Mansour’s vehicle company paying 59.5m, therefore breaching the rules as the owner injects too much money. And this is just for the season 2015-2016. After spending over a billion pounds since arriving in 2008, Sheikh Mansour is being caught up by the reality of UEFA financial rules. This would mean the citizens were breaching rules over 2012-2016 period.
Manchester City has appealed to the Court of Arbitration of Sport (CAS) in order to have a second opinion in this situation and hopefully have the ban cancelled before the new season starts. A photo of a very large group of lawyers arrived at their offices means there is a general feeling that City have enough money to push court for a settlement, such as a fine rather than a ban. If CAS take too much time to process the court case, the ban can be suspended for next season. It looks like decision will not be made before midway through next season, therefore pushing the ban to the following season. Nobody really knows what would happen if the ban goes through - would another country get a spot in the Champions league or would 5th place in the Premier League get that spot. With the ban only been announced recently it is still very unclear, and with COVID-19 creating a mess as well, nobody knows whether the season will even finish.
What doesn’t help the club’s case if the fact that they have been very confrontational from the start of the process, the chairman publicly saying he was not a fan of the investigation when it started last season. This confrontational attitude can even be felt in the club's statement after the announcement of the ban. The chairman's general opinion ties in with one of the many issues that come in with FFP. This system is supported by clubs like Bayern Munich, who are old legendary clubs who would never have financial problems like City, PSG and Chelsea to a lesser extent have. These old clubs have been around for a while and have a big reach world-wide, making lots of money on shirt sales, derived product and advertising. The newly enriched clubs who have been bought out by Qatari or other wealthy owners feel like FFP restrains new big clubs to come into an elite circle.
There are numerous consequences for the club, some of which are only speculations at this stage but could have a genuine chance of becoming real in the year to come. First of all, the two-year ban of any UEFA competition has already been announced. However, while Germany and France both have their own financial instances to control the activities of the clubs in their countries, Spain, Italy and England all rely on FFP to take decisions. Therefore, this could mean the FA and Premier League look further into the case, imposing more sanctions. This can go from more fines, point deductions, relegation all the way down to League 2 and/or transfer bans. Recently, the issue of their league title of 2014 has been put in contention, meaning it could be taken away from them and therefore making Liverpool champions if they accept it (PSG refused the French league title after Marseille were stripped of it in 1993 due to financial wrongdoings).
Not only from a sporting point of view is this disastrous for the club. The reputation of the club is at stake, whether the ban goes through or not. Rapid buying into the champions league and elite of football is rarely perceived well other than by plastic fans or the fans of said clubs. You have to earn your way to success. If the ban does go through or worse still, relegation comes upon city, not only will they be an easy target for rival fans, but the players and especially Guardiola could leave his position as manager. As much as the people running the club saying all accusations are false and that everyone will be around next year, the general public doubts Pep Guardiola and the likes of Sterling, Aguero and Bernardo Silva will want to play against Colchester United or any lower league teams. A big wave of departures could occur this summer. With City still on course in the champions league, in the FA Cup and have just won the Carabao Cup, they could end the season with a treble and yet not play the best of world club football in the years to come. Watching UEFA hand the biggest club trophy in world football to Manchester City in May would be a disaster to the institutions’ image.
Finally, this ban could have a huge impact on the general world of football. Clubs like PSG who have tried to buy their way into success will be scared of sanctions. As much as they have collaborated more than Manchester City with Financial Fair Play, they managed to spend 220m€ on Neymar and 180 on Mbappé, so they will definitely be a little worried about sanctions in the near future. If the ban goes through it would be a huge step forward for the program which has had its fair share of criticism since being put into place nearly a decade ago.
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