v

This post is also available in: Español

Following a hearing held on January 22, 2020, the Adjudicatory Chamber of the UEFA Club Financial Control Body (CFCB) notified Manchester City last Friday of its decision to sanction the English club for serious breaches of the UEFA Club Licensing and Financial Fair Play Rules.

The CFCB fined the club for €30 million and, what is more remarkable, it excluded Manchester City from European competitions for the 2020/21 and 2021/22 seasons. 

The decision can be appealed before the Court of Arbitration for Sport (CAS) and, if necessary, before the ordinary courts of justice.  Unsurprisingly, the British club has already issued a statement announcing that it will appeal the decision before the Swiss court, and that it is “disappointed but not surprised” to have been fined in a case that was initiated, prosecuted and judged by UEFA.

Financial Fair Play Rules have been toughened since their approval by the UEFA Executive Committee in 2010, meaning that clubs that qualify for European competitions (currently, the UEFA Champions League and the UEFA Europa League) cannot spend more than €100 million above their total revenue, with UEFA immediately imposing monitoring measures on transfer deals that may surpass that threshold and the possibility of demanding guarantees from the clubs to ensure compliance with the rules. Also, at June 30 and September 30 each year, those clubs cannot have outstanding debts with their players, other clubs or the tax authorities.  

In addition, UEFA’s approval of the new Financial Fair Play Regulations in 2018 brought in even stricter measures such as: (i) control over clubs’ debts (since the previous regulations only controlled their deficits) and (ii) the obligation for clubs to publish their budgets or balance sheets on their websites.

Manchester City’s specific breach consisted of exaggerating its revenue from sponsorship on its break-even information and accounts submitted to UEFA between 2012 and 2016; in fact, the revenue did not come from real sponsors, making it appear that it met the UEFA parameters when it was fictitious.  

Although the fine imposed on Manchester City has attracted great media interest, it is not the first time that UEFA has punished clubs for breaching Financial Fair Play rules.  As we have discussed in previous blog posts, traditionally, disciplinary measures have come in the form of financial penalties, e.g., the €60 million fine to PSG and Manchester City in 2014, along with a restriction on registering new players for UEFA competitions (although that was eventually lifted after a settlement agreement was reached). 

There have also been cases where clubs have been excluded from UEFA competitions, e.g., Malaga, Panathinaikos or, as recently as last summer, AC Milan, which was not able to compete in the UEFA Europa League this season. 

Although the penalty imposed on Manchester City is nothing new, it is yet more evidence of UEFA’s intolerance to conduct that breaches Financial Fair Play.

Finally, as harsh as UEFA’s actions may seem in recent seasons, it is yet to impose the most serious punishment set out in the Financial Fair Play regulations: stripping a club of a championship title or prize money.  We must wait and see, should these kinds of breaches continue, whether UEFA goes as far as to dish out its maximum penalty.  

This post is also available in: Español

Autores:

Asociado

2 artículos



miguelangel.orozco@cuatrecasas.com