Man City's Successful Appeal Strikes a Victory for Superclubs, Raises Questions Over FFP

Manchester City will be free to play in the Champions League the next two seasons after all following a CAS ruling that delivers a blow to UEFA and the strength of its Financial Fair Play regulations.
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Manchester City has its greatest victory of the season. The club will be free to play in European competition the next two seasons after all, the Court of Arbitration for Sport ruled on Monday, overturning a UEFA disciplinary decision to surely delight the club but also raise serious questions about UEFA's Financial Fair Play regulations.

UEFA's Club Financial Control Body (CFCB) had imposed a two-year ban and a €30 million fine on Man City in February for breaches of FFP and for a failure to cooperate with the investigation. Although no full explanation of that decision was ever made public, pending this appeal, that was taken to mean disguising support for the club from the state investment fund of Abu Dhabi as sponsorship deals from various state-run entities.

CAS’s full reasons will be released in the coming days, but the brief statement it has released noted “that most of the alleged breaches reported by the Adjudicatory Chamber of the CFCB were either not established or time-barred. 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.”

A fine has still been imposed, but it has been reduced from €30 million to €10 million.

The decision means that Man City can effectively continue to prepare for next season without the threat of losing numerous senior players who wanted to play Champions League football, and without the trimming of its budget that the loss of Champions League revenues may have entailed. The club, which had always maintained its innocence, will see this as vindication. (The clubs chasing fifth place in the Premier League, thinking City's ban would remain upheld, however, are out of luck. The top four will proceed to the Champions League per usual.)

CAS’s verdict, though, still leaves several questions unanswered, although more will become clear when the full written reasons for the decision are released.

Leaked emails published by the German magazine Der Spiegel in November 2018, which prompted the CFCB investigation, suggested City’s generous sponsorship deal for 2015-16 with Etihad had not in fact been funded by the airline. City’s defense, in fact, had seemed likely to rest on the fact that those emails had been sourced by illegal hacking. It now appears it was far more wide-ranging than that and attacked the substance of the CFCB ruling.

In another leaked email, City’s in-house lawyer, Simon Cliff, speaking of a possible financial sanction for exceeding the permitted €45 million losses in 2012 and 2013, told FIFA president Gianni Infantino that City chairman Khaldoon Al-Mubarak “would rather spend £30 million on the 50 best lawyers in the world to sue [UEFA] for the next 10 years.” That hints at the concern that must now be felt at UEFA, whatever the rights and wrongs of this particular case: if a failure to cooperate with an inquiry yielded only a €10 million fine, next to nothing for a club such as City, legal obstruction from superclubs, particularly those back by states, is only likely to become more common. And that in turn will make it incredibly difficult to impose FFP regulations in future.

UEFA's initial response was brief. “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 5-year time period foreseen in the UEFA regulations,” the key paragraph of its statement read.

Man City wins the appeal of its Champions League ban

That in itself raises further questions, most obviously how UEFA's investigatory body could apparently misunderstand its own rules on time-barring. UEFA's legal team had advised the CFCB before the hearing. Equally, if the major issue is time-barring–and again more will probably become clear when the full written reasons for the judgment are released–that implies that City was in breach, but it managed to hide the fact for long enough that it could not be punished.

Again, that hardly suggests FFP regulations as robust tool; rather there is every encouragement for clubs to obfuscate and delay processes as long as possible, particularly if the sanction for a failure to cooperate is a relatively small fine. The phrase “insufficient conclusive evidence to uphold all of the CFCB’s conclusions” equally feels significant, suggesting as it does that some conclusions were valid and that UEFA believes there was some evidence for other conclusions.

City will paint this as full vindication, but it is far from that. Rather the verdict seems likely to confirm what many already suspected: that for the superclubs, FFP regulations are as good as unenforceable. For the past three decades, there has been a political struggle between the clubs, UEFA, and FIFA. On Monday, the balance of power tipped yet further away from UEFA and toward the clubs.