Manchester City are facing a cut in their Champions League squad
size and a heavy fine for breaching UEFA's Financial Fair Play
regulations.
As revealed by The London Telegraph, the investigatory
chamber of the European game's Club Financial Control Body has decided
that City's unprecedented £1 billion ($1.8 billion) spending spree
under the ownership of Sheikh Mansour did not comply with FFP rules.
The Telegraph learnt that City have been offered a
punishment which includes a combination of financial and sporting
sanctions - if they agree not to fight their guilty verdict. The latter
penalty would leave the club unable to register a full 25-man squad
for the Champions League next season, potentially denying them use of
millions of pounds worth of their own talent and hurting their ability
to recruit players this summer.
City were given until Thursday night to agree what is known as a
"settlement" offer with the CFCB, a sanction which is open to
negotiation but only to moderate effect. Were they to fail to reach a
consensus or refuse to accept their guilt, their case would transfer to
the CFCB's adjudicatory chamber, which would assess afresh whether they
breached FFP and, if so, what punishment to impose.
City and UEFA declined to comment last night on precise
details of any settlement offer or whether one had already been agreed
but European football's governing body has previously made it clear
that fighting on would put a club at risk of a more severe penalty,
including expulsion from the Champions League.
Even if City agree to settle their case, FFP rules allow
Premier League rivals such as Arsenal and Everton to challenge any
sanction they deem too lenient. The latter clubs could argue City's
breach materially affected their chances of finishing third or fourth
in the table, and thus hindered their European qualification hopes.
Having posted losses of £149 million ($270.5 million) over that
period, the activities of City's Abu Dhabi-based owners were always
going to be heavily scrutinised under regulations that permitted clubs
to lose £37.2 million ($67.5 million) after certain exceptions were
discounted. It is City's attempts to balance their books which were
most closely examined, particularly their 10-year, £350 million ($635
million) sponsorship deal with Etihad, the official airline of Abu
Dhabi.
FFP rules prohibit transactions with companies which have
ties to a club or their owners being used in this way unless they can
be shown to represent fair market value. Designed to prevent wealthy
owners artificially inflating the value of such deals, their validity
is judged on three criteria.
If it is shown to be a related-party transaction, UEFA's
auditors calculate how much equivalent media exposure would have cost
through the company advertising in other ways, how the tie-up compares
with those struck by similar clubs, and what independent marketing
experts think of the agreement.
Paris St-Germain are the other big name to have been found
guilty of breaching FFP by the CFCB's investigatory chamber and they
were also made a settlement offer including financial and sporting
sanctions.
PSG had previously argued that their €200 million-a-year
($298 million) commercial arrangement with the Qatar Tourism Authority
is above board but it emerged last month that Uefa had serious doubts
over its validity and the French champions' attitude to scrutiny of it.
The CFCB investigatory chamber will meet Thursday, and
possibly Friday, to approve settlement offers agreed with the less than
20 clubs found to have breached FFP regulations and refer any
outstanding cases to the adjudicatory chamber.
Settlement offers will not be rubber-stamped by the head of
the investigatory chamber, the former Belgian Prime Minister Jean-Luc
Dehaene, until next week.
The Telegraph, London
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