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CAS overturns Manchester City’s Champions League ban, ‘remains committed’ to FFP

Kevin de Bruyne of Manchester City takes on Casemiro of Real Madrid during the UEFA Champions League round of 16 first leg match on February 26 (by Matt McNulty - Manchester City/Manchester City FC via Getty Images)

Uefa has said it remains committed to its Financial Fair Play (FFP) system after the Court of Arbitration for Sport (CAS) today (Monday) overturned Manchester City’s ban from the Champions League and reduced the English Premier League football club’s fine by two thirds.

The ruling from CAS comes after a protracted legal battle between City and European football’s governing body over allegations the club broke FFP rules over several years by overvaluing sponsorship deals.

In its decision, CAS emphasised that most of the alleged breaches reported by the Adjudicatory Chamber of Uefa’s Club Financial Control Body (CFCB) were “either not established or time-barred”. The CAS ruling read: “As the charges with respect to any dishonest concealment of equity funding were clearly more significant violations than obstructing the CFCB’s investigations, it was not appropriate to impose a ban on participating in Uefa’s club competitions for MCFC’s failure to cooperate with the CFCB’s investigations alone.

“However, considering i) the financial resources of MCFC; ii) the importance of the cooperation of clubs in investigations conducted by the CFCB, because of its limited investigative means; and iii) MCFC’s disregard of such principle and its obstruction of the investigations, the CAS Panel found that a significant fine should be imposed on MCFC and considered it appropriate to reduce Uefa’s initial fine by 2/3, i.e. to the amount of €10m ($11.3m).”

In May 2019, City hit out at what it claimed was a “wholly unsatisfactory, curtailed, and hostile process” after Uefa confirmed that it would refer the club to the adjudicatory chamber of its CFCB. The CFCB investigatory chamber had opened an investigation into City on March 7, 2019 for potential breaches of FFP regulations that were made public in various media outlets.

The FFP accusations emerged in late 2018 when a report in German magazine Der Spiegel, based on documents obtained by the Football Leaks website, claimed that City had been disguising huge investment from its owner, Sheikh Mansour bin Zayed al-Nahyan, as sponsorship deals through various UAE-based companies.

One email exchange seen by Der Spiegel appeared to imply that while the total value of the Etihad airline’s sponsorship of City had reached £67.5m (€75.1m/$85m), only £8m of this had actually been contributed by the airline, with Abu Dhabi United Group – Sheikh Mansour’s holding company – topping the sponsorship up by almost £60m over the course of six years.

In February, City commenced an appeals process against what the club claimed was a “prejudicial process” pursued against it by Uefa. The Adjudicatory Chamber of the CFCB found that City committed “serious breaches” of the Uefa Club Licensing and Financial Fair Play Regulations by overstating its sponsorship revenue in its accounts and in the break-even information submitted to Uefa between 2012 and 2016.

The Adjudicatory Chamber also noted that in breach of the regulations the club failed to cooperate in the investigation of this case by the CFCB. City was therefore hit with a two-season ban from all Uefa club competitions, along with being ordered to pay a fine of €30m.

In response to today’s ruling, Uefa said: “Uefa notes that the CAS panel found that there was insufficient conclusive evidence to uphold all of the CFCB’s conclusions in this specific case and that many of the alleged breaches were time-barred due to the five year time period foreseen in the Uefa regulations.

“Over the last few years, Financial Fair Play has played a significant role in protecting clubs and helping them become financially sustainable and Uefa and ECA (European Club Association) remain committed to its principles.”

City has a long history with Uefa when it comes to FFP. In April 2017, Uefa cleared City and French Ligue 1 club Paris Saint-Germain of further punishment over the breach of FFP regulations in 2014. Uefa said both City and PSG had complied with sanctions placed upon them and were able to operate under standard regulations. City and PSG were amongst the first teams to be sanctioned under FFP, which was introduced by Uefa in an effort to stop teams from overspending.

City said today: “Whilst Manchester City and its legal advisors are yet to review the full ruling by the Court of Arbitration for Sport (CAS), the club welcomes the implications of today’s ruling as a validation of the club’s position and the body of evidence that it was able to present.”