Investigation report details how Manchester City hid sponsorship funding for years
An independent commission's 40-page ruling details how Manchester City's owners used a disguised funding scheme for nearly a decade to get around financial fair play rules. The club was found guilty of all financial breach charges and nearly all charges of failing to cooperate with the investigation.
A newly published ruling from an independent commission gives a detailed account of the scheme Manchester City used to circumvent the Premier League's financial regulations. The word "sham" appears eight times in the 40-page document, which explains that the club's Abu Dhabi owners recognised as early as the 2009-10 season that reaching their ambitions would require spending beyond what the rules allowed.
How the disguised funding scheme worked
According to the ruling, sponsorship deals were split into two parts: a base fee actually paid by the sponsor, and an additional "tagged" sum effectively covered by the club's owners. This created a misleading impression in financial statements that commercial income was far higher than it actually was.
From the 2009-10 season through 2017-18, total sponsorship income reported by the club came to nearly £950m, but only around £119m represented genuine base fees. The remaining more than £830m came from payments disguised as originating from sponsors.
An emergency fix and another scheme
The ruling describes an incident in May 2013, when the club discovered days before the end of the financial year that it was roughly £9.9m short of complying with Uefa's financial rules. Modified sponsorship agreements were quickly generated to close the gap, without the sponsors themselves being consulted.
The report also details the so-called Fordham Arrangement, part of a 2012 initiative, which allowed the club to disguise money from its owners as operating income through an artificial deal involving players' image rights.
Failure to cooperate
The commission found that the club deliberately worked to obstruct the investigation, and that several witnesses gave evidence they knew to be untrue. City maintains the Premier League misunderstood the sponsorship agreements, but the panel rejected that explanation as having been invented after the fact.
