Premier League vs Manchester City – What could happen and what will it mean?

Sports analytics & advisory Sports finance and governance

The verdict in the Premier League’s high-profile case against Manchester City over alleged financial breaches is rumoured to be released within the next month.

Aaryaman Banerji, Head of Football Governance, examines various possible implications of the verdict, and predicts that, whatever the outcome, the effect on English football will be seismic.

The Premier League's giant elephant

Football can procrastinate no longer. The initial verdict into the Premier League’s landmark case against their own (seven-time) champions is expected soon. The post-1992 era of English football has so far largely managed to avoid the scale of scandal that has manifested amongst several of its competitors. The decline in Serie A’s global popularity, for example, can at least be partially attributed to Calciopoli in 2006, whilst Olympique Marseille’s 1993 bribery case still casts shadows across French football 32 years later. More recently, FC Barcelona’s Negreira Case has threatened to put a sizable asterisk next to the past two decades of the club’s fortunes.

It is perhaps telling of the direction of modern football that the charges against Manchester City, which threaten to consume the integrity of the English club game, take a different form from any of the above. If proven, gone are the days of brown envelopes and phone tapping - that form of competitive doping will be Jurassic. This would be football’s answer to white-collar infringement, a set of allegations that acknowledge that the frontline of football is now being fought via campaigns of monetary warfare, rather than through premeditated penalty decisions.

Whilst the exact nature of the verdict remains uncertain, the effect on English football will be seismic, whatever the outcome.

What are the 129 charges, and what could happen?

After an investigation that started in 2019, the charges, filed in February 2023, alleged that Manchester City breached 115 Premier League rules. Since that point, they have been re-categorised into 129 breaches. In summary, the Premier League has put forward five main categories of charge:

: Under the Premier League’s Profit and Sustainability Rules, clubs are prohibited from losing more than £105million across three seasons. Income from sponsorships is considered part of a club’s regular income. This means that it forms part of the club’s overall revenue and can offset lossmaking. However, equity injected by an owner does not classify as regular income and so cannot be used to compensate losses in revenue. The allegations against Manchester City are that the club have exploited their ownership structure to disguise equity being put in by Sheikh Mansour as sponsor deals with Abu Dhabi based companies.

: These are focused on payments made to managers and players – notably Roberto Mancini and Yaya Toure. City is accused of using their Abu Dhabi ownership to pay staff without including these payments as club costs. Mancini allegedly signed a separate deal with Abu Dhabi's Al Jazira to receive £1.75 million annually for four days work. Toure reportedly received image rights payments from Sheikh Mansour’s Abu Dhabi United Group, not Manchester City. These off-book payments were not recorded on the club’s balance sheet, allowing them to bypass revenue regulations.

: These have not been specifically disclosed. However, there are seven charges pertaining to each season 2015-2016, 2016-2017 and 2017-2018. Initially, these were grouped as seven charges in total (suggesting that it is the same seven regulations that have been breached across each of the three seasons). However, these have now been divided into seven charges for each season, explaining the change from 115 charges overall to 129.

: These are in relation to the UEFA investigation in 2014, which found City had inflated their sponsorship. The Premier League require in their own rules that member clubs comply with the rules of European governing bodies.

: These relate to the club failing to act “in good faith” around the league’s investigation into their conduct. As explained in The Athletic, examples of this include failure to release documents to the Premier League, claiming they are confidential.

Possible outcomes

Whilst it is difficult to predict the direction of the verdict, there is a strong probability that this will simply be an initial stage. An appeals process seems extremely likely, whatever the outcome. Additionally, any form of verdict is likely to see litigation proceedings initiated by other clubs in the Premier League, either claiming damages from the period in which Manchester City are alleged to have broken regulations, or that their own efforts to adhere to the Profit and Sustainability rules were unnecessary and adversely affected their performance on the pitch.

Outcome 1: Manchester City claims victory

If Manchester City are acquitted of all or the majority of charges:

1. The Premier League’s authority is weakened, increasing the risk of further legal challenges to its regulations

The Premier League’s authority has been challenged in recent seasons, both domestically and internationally. In the 2023-2024 season alone, the league spent £45 million in legal fees against its own clubs.

If Manchester City can claim victory, it would further undermine the Premier League. Beginning next year, a new system of financial regulation—the Squad Cost Rule—may encourage clubs at risk of violating it to pursue more legal action or arbitration against the league.

A club making a legal challenge to the league’s regulations would have seemed extremely remote during Richard Scudamore’s time as Chief Executive. However, there is now an increasingly diverse set of owners with equally diverse interests, and this has meant that several areas of the league’s regulations have been subject to criticism and challenge in recent years.

Recent separate litigation between Manchester City and the league regarding Associated Party Transaction rules is a strong example of this and shows that the temperate environment fostered under Scudamore is already showing signs of collapse.

2. Strong unrest among other Premier League clubs

If the club is acquitted, the criticism of the Premier League’s leadership could increase, and the league’s unity may weaken. This could lead to strong internal difficulties within the Premier League.

The globalisation of football and different ownership models have already caused division within the Premier League. Whilst Manchester City are often in regulatory agreement with Saudi state-owned Newcastle United, and with some clubs operating a multiple club ownership system, they have also been accused by some Premier League counterparts of “threatening and disruptive actions.”

3. A new wave of hyperinflation

Previous waves of hyperinflation in football have resulted from the perception of regulation being weak. Most recently, the relatively light sanction on Manchester City and Paris Saint-Germain, following the 2014 UEFA investigation, led to a new wave of raised stakes spending on players, increasing both player salaries and transfer fees substantially. As early as 2003, Roman Abramovich’s takeover of Chelsea revealed inadequacies in the Fit and Proper Persons Test for owners, bringing in a new, financially inflated ecosystem.

4. A gradual selling up of clubs by non-sovereign owners

An environment in which it becomes clear that non-sovereign owners may struggle to compete, combined with the perception that clubs with the most extensive resources can be absolved of potential rule breaches, may lead to the gradual sale of clubs by non-sovereign investors. This might particularly be the case amongst the current 10-strong cohort of American owners in the Premier League, who may see more commercial potential in other facets of what they consider the “entertainment industry”. The most obvious buyer in this scenario might be other sovereign wealth funds, increasing further the geopolitical significance of the Premier League.

Outcome 2: the Premier League claims victory

If Manchester City are found guilty of all or the majority of the charges:

1. An unprecedented sanction for Manchester City

There is a possibility that the club would face expulsion from the competition and relegation to a lower league. Whilst this has not occurred in the Premier League era, there is precedent for this form of sanction. In 1990, Swindon Town was demoted two divisions for 36 counts of illegal payment to players (this was reduced to one on appeal). In Italy, following the 2006 Calciopoli scandal, Juventus, ACF Fiorentina and SS Lazio were relegated to Serie B (although this was later reversed for the latter two clubs). However, relegation would require a special shareholders' meeting and a vote of 15 clubs, making it unlikely this season due to the potential for an appeal. A heavy points deduction, making relegation difficult to avoid, is a more likely outcome.

Manchester City could also be stripped of some or all of their 7 Premier League titles, for the 2013-2014, 2017-2018, 2018-2019, 2020-2021, 2021-2022, 2022-2023, and 2023-2024 seasons – if Italy’s Calciopoli precedent is followed. Even if justified by the verdict, this could, however, have serious consequences for the global reputation and popularity of the Premier League – when fans can no longer trust that what they are watching on the pitch genuinely matters, this can seriously damage their commitment to following the competition.

The least severe sanction would likely be a significant fine alongside a sporting penalty.

2. Added momentum for an Independent Football Regulator

Whilst the charges against Manchester City stem from alleged rule breaches dating back to 2011, the Premier League investigation only began in 2019, with charges finalised in 2023. This eight-year delay could drive more support for an Independent Football Regulator to enforce stronger financial rules, as outlined in the Football Governance Bill currently making its way through Parliament.

However, there has been strong resistance to the introduction of a regulator from Premier League clubs. A scenario might therefore arise in which many Premier League clubs feel that stronger financial investigatory powers are needed but are reluctant to support an independent body that would be able to impose this.

3. The possibility of strained UK-UAE relations

As reported by The Athletic, the British embassy in Abu Dhabi and the Foreign Commonwealth & Development Office have already discussed the Manchester City charges. However, the contents of these discussions were not disclosed, as they were deemed to pose a risk to UK-UAE relations.

Manchester City’s Abu Dhabi state ownership raises significant political difficulties, should the Premier League be able to claim victory. Attempts at encouraging State intervention in the football industry on behalf of a foreign nation have already been seen. In 2021, Prime Minister Boris Johnson was urged by Saudi Crown Prince Mohammed bin Salman to intervene to allow the proposed sale of Newcastle United to the Public Investment Fund of Saudi Arabia - though the Government denied taking any such action.

Outcome 3: Either or both claim victory

If Manchester City is acquitted of major charges but found guilty of minor infractions, both the Premier League and the club would try to claim victory, leading to the following:

1. A combination of any number of the above factors

This outcome would create enormous uncertainty within the football industry. As a result, any combination of the above factors is likely. There is a possibility, for example, that a new wave of hyperinflation in the football industry will lead to increasing support for an independent football regulator. Whilst the exact direction is difficult to predict, it would be sensible to carefully monitor each of these factors, in the event of a ‘mixed’ verdict.

2. A high-profile PR battle

As was the case following the initial verdict around Associated Party Transactions, both sides might engage in high-profile ‘victory parades’, declaring success in the case. It is the strength of these campaigns which may determine the direction of any appeal, and the ultimate consequences of the case.