An independent commission has found that Manchester City used a series of “sham” commercial arrangements with sponsors as part of a disguised funding scheme that artificially inflated the club’s revenues and reduced its costs by more than £900 million. The Premier League made the findings public in its statement on……
An independent commission has found that Manchester City used a series of “sham” commercial arrangements with sponsors as part of a disguised funding scheme that artificially inflated the club’s revenues and reduced its costs by more than £900 million.
The Premier League made the findings public in its statement on the case involving Manchester City, detailing the commission’s conclusions on the club’s financial dealings during the period under review.
According to the Premier League, some of City’s sponsors were required to pay only a portion of the agreed sponsorship fees, while the remainder was funded by Abu Dhabi United Group Investment & Development Ltd (ADUG), which owned the club.
“The independent Commission found that Manchester City arranged ‘sham’ commercial deals with a number of its sponsors during the period, which were part of a disguised funding scheme,” the Premier League said.
It added that further “sham” arrangements funded by ADUG were entered into to allow the club to record lower operating expenses than it actually incurred.
The commission also found that City entered into what it described as a “sham” circular arrangement with Fordham, an entity that purchased the image rights of the club’s players, with the arrangement also funded by ADUG.
The Premier League said the purpose of the schemes was to make City appear compliant with financial regulations by artificially increasing its revenues and reducing its costs by more than £900 million during the affected period.
“The consequence of this, as the Commission found, was that the club filed misstated accounts and concealed the true state of its finances from its auditors and football regulators,” the statement said.
The commission concluded that “by its conduct the club clearly intended to circumvent the PL Rules”.
The Premier League said the findings meant Manchester City failed to accurately report its income and expenditure under the league’s Profitability and Sustainability Rules (PSR) and UEFA’s Club Licensing and Financial Fair Play Rules.
According to the commission, had the relevant agreements been accurately reported in Manchester City’s accounts, the club would have breached both the Premier League’s and UEFA’s spending limits “by a very substantial amount.”
The findings add to the extensive financial allegations that have been levelled against Manchester City in the Premier League’s long-running case against the club.
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