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Can a Football Club Be Relegated for Breaking FFP Rules?

6 February, 2023

Red and Black Down Arrow ButtonPicture the scene: Manchester City, the most dominance force in English football for nearly a decade, are relegated from the Premier League.

It’s impossible to imagine it from a purely footballing perspective based upon their performances on the pitch, but as a result of breaking Financial Fair Play (FFP) rules? Watch this space.

The Cityzens are set to be dragged up in front of an independent panel to explain some of their more ‘creative’ financial practices, many of which have been going on under the Premier League’s nose for years.

But EPL officials have been investigating City’s accounting for more than four years, with their findings concluding that the club has more than 100 counts of alleged financial mismanagement to answer.

If found guilty, the sanctions available range in severity. But is a potential relegation on the cards for Manchester City?

What Have Man City Been Accused Of?

Blue Pound Sign Under Magnifying Glass

The list of alleged FFP breaches date to the period of 2009-2018, with City also accused of failing to cooperate with the Premier League’s line of questioning.

Although a number of different charges have been levied against the club, the general theme is an alleged fudging of their accounts – or to use the Premier League’s legalese a failure to provide ‘accurate financial information that gives a true and fair view of the club’s financial position.’

Specifically, City allegedly didn’t accurately report player and manager renumerations – the source of ‘secret’ compensation payments made to former manager Roberto Mancini is thought to be one of the supposed breaches, broke UEFA’s FFP rules for five years in that investigated span of time and also broke the Premier League’s own rules on financial sustainability and profitability.

It has long been suspected that City have used sponsorship deals, signed with a number of subsidiaries and sister companies of their key shareholders Sheikh Mansour bin Zayed Al Nahyan and Khaldoon Al Mubarak.

The Abu Dhabi United Group is owned by Sheikh Mansour, who is the son-in-law of Dubai’s ruler. They have an 81% shareholding in City and are state funded – despite their claims to the contrary.

There’s nothing wrong with that from an FFP perspective, but the allegations are that the club’s owners have signed dodgy sponsorship agreements with partner firms, such as Etihad, Emirates, First Abu Dhabi Bank and Masdar, which City’s owners have a financial interest in.

So, when they sell shirt sponsorship to Etihad they can do so at inflated prices – allegedly – because the money ultimately remains within the family.

By being creative in how much revenue they make each year, City are therefore allowed to pay more on transfer fees and salaries to ensure they meet FFP and profitability requirements.

It should be said at this point these are all allegations only, with nothing proven, and in their right to reply a statement from City reads:

“Manchester City FC is surprised by the issuing of these alleged breaches of the Premier League Rules, particularly given the extensive engagement and vast amount of detailed materials that the EPL has been provided with.

“The Club welcomes the review of this matter by an independent Commission, to impartially consider the comprehensive body of irrefutable evidence that exists in support of its position.”

Even if an independent commission rules against City, they will likely take an appeal to the Court of Arbitration for Sport (CAS), who overturned a Champions League ban and reduced the fine levied by UEFA to City by 66% for similar breaches back in 2020.

However, some of the accusations levelled at City back then failed to stick because they had been ‘barred’ via the passage of time. However, there are no date-based restrictions on alleged Premier League breaches, which suggests the club could be heading for choppier waters this time around.

What Could the Punishment Be?

Banknote Question Mark and Gavel Against Blue Background

The Premier League could make a real stand against FFP corruption – and the dangers to the integrity of football presented by state-funded ownership – by metering out the harshest sanctions against City if they are found guilty.

Those could, technically, include expulsion from the Premier League – they would then need to be accepted by the EFL into the Championship.

Of course, the reality of that happening seems unlikely. The Premier League simply wouldn’t want to lose one of their most storied clubs.

A points deduction is more likely, however given how long these legal matters take it’s unlikely such an outcome would have an impact on the 2022/23 title race – as confirmed by Sky Sports’ Kaveh Solhekol:

“If it was a points deduction, it would be a deduction that would be in the current season, so if they were found guilty in a future season, that’s when the points deduction would be applied.”

If the Premier League take the mildest stance, a fine could be imposed on City instead. That would really hurt a club run by a state-controlled equity group worth an estimated £116 billion….

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