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Etihad Stadium, home to Manchester City FC
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Manchester City charged for financial reporting lapses

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Reigning Premier League football champions Manchester City FC face serious charges of failing to provide true and fair financial information to league officials that could have serious consequences for the club’s status.

14th Feb 2023
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Last week, the Premier League issued a statement alleging the club had committed more than 100 breaches of specific financial disclosure rules covering revenues, manager and player remuneration, related parties and operating costs for seasons spanning 2009-10 to 2017-18.

After the European football association UEFA found in 2020 that City had committed serious breaches of licensing and financial fair play (FFP) regulations between 2012 and 2016 (for which the sanctions were subsequently commuted by the Court of Arbitration for Sport), the Premier League took an interest. A further section of the charges published by the league allege that the club failed to comply with the rules requiring it to cooperate with and assist the league’s investigation between 2018-19 to 2022-23 with documents and information provided “in the utmost good faith”.

The club has denied any wrongdoing in an enquiry that will be heard in private before an independent panel. No further statement will be made until the commission’s findings are published on its website, the Premier League said.

Political manoeuvring

Liverpool university football finance lecturer and qualified accountant Kieran Maguire distilled the Premier League charges against Manchester City into three categories: inflating income to stay within FFP limits; underestimating costs to stay below those limits by having parallel contracts in place; and not acting in good faith in complying with the PL investigation. 

“It’s no surprise the Premier League is taking action,” Maguire said. “They’re under pressure from other clubs to do something. Football has become intensely political and everybody is acting out in self interest. If Manchester City gets a tariff, others might take their place in the Champions League.”

It was also curious that the Premier League published its allegations 48 hours before the government was due to publish a football whitepaper proposing to replace PL self regulation with an independent regulator, Maguire added.

“The charges against City come as the Premier League tries to demonstrate it is capable of marking its own homework,” he said. “Though the fact that some of the charges go back to 2009 suggest that they might have been asleep on the job for several years.”

Manchester City files annual accounts for both the club itself and its parent group. Following Premier League guidelines, these figures are converted to allow the FFP calculations for profits and losses on a rolling, three-year basis. 

As an example, City’s accounts for 2011 show £43m in commercial, which nearly trebled to £121m in 2012. The club accounts also reported zero directors’ remuneration, when most other clubs pay directors £2m-£3m a year. “These might have provoked a degree of query from the Premier League, but at the time, no action was taken,” Maguire said.

Tougher regulation to come

The FFP rules were loosely drafted, he continued, so there are several types of transaction clubs can take to circumvent the rules. “There are 18-19 clubs hoping for a tariff, but there’s also a bit of ‘There but for the grace of God…’ 

“If Manchester City broke the rules, there needs to be a tariff such as a fine, points deduction or relegation from the Premier League. If it’s a one-off, that could be seen as scapegoating the club. But if it’s a sign of a much tougher regime, there will be interesting times ahead,” said Maguire.

“That opens up a bigger can of worms about the purpose of financial fair play rules and who is qualified to run these clubs. The amounts involved might be small financially, but these clubs carry a huge cultural significance.”

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By Hugo Fair
14th Feb 2023 14:16

Whilst it's interesting to see the spotlight shone on an area that is possibly more rife with a 'bendy' relationship to the truth than politicians ... there's only a loose relationship with accounting (in that the 'rules', whether being broken or adhered to, are rules of membership - not any kind of accounting standards or national statutes).

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Replying to Hugo Fair:
Richard Sergeant
By Richard Sergeant
16th Feb 2023 11:51

Some of my best football WhatsApp’s are from auditors pawing over the accounts of rival teams, paring them against financial fair play rules, and considerations of their true cash positions.

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Replying to rsergeant:
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By Hugo Fair
16th Feb 2023 13:36

To nick one of Justin's recent comments in a different thread, I never realised that football was such a doggy dog world (see https://www.youtube.com/watch?v=5ExXOIvY9V0)!

Unless of course your mates are poring over rival teams' accounts, and not attacking them with their paws. :=)

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By jon watkin
16th Feb 2023 11:49

And yet, a mere 10 miles up the road, in another theatre of dreams, the Oldham Coliseum theatre, one of the oldest in the country, is threatened with closure for want of a £1.8m Arts Council grant over 3 years. According to recently published figures, the MC teams total wage bill is: £188,525,480 per year ; £3,625,490 per week .

The contrast between these two worlds of fantasy could not be starker.

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