Is the Blue Moon Setting?

Manchester City (“City”) has been banned for two seasons from all UEFA club competitions and fined €30 million after being found to have committed serious breaches of the financial fair play (“FFP”) regulations. UEFA has banned City on the basis that (i) they overstated the value of sponsorship deals between 2012 and 2016 with “leaked” internal emails suggesting that Sheikh Mansour bin Zayed al-Nahyan, City’s Abu Dhabi based owner, mostly self-funded the huge £67.5 million annual sponsorship of the City shirt, stadium and academy by Etihad airlines; (ii) City overstated its break even profits for the years 2012 to 2016; and (iii) City failed to cooperate with UEFA’s Adjudicatory Chamber of the Club Financial Control Body (“CFCB”).

The ban would mean that City would miss out on approximately £100 million in broadcasting revenue, ticketing and gate receipts and prize money, not to mention the prestige that comes with playing in Europe’s elite footballing competition.

What next for City?

City has already announced that they will be appealing to the Court of Arbitration (“Cas”) against the ban and has hired a dream team of lawyers to assist with the appeal. Though the ban against City could be seen as a brave decision undertaken by UEFA to control the spending of mega-rich clubs of Europe, accusations of prejudice have been made by City. Therefore, the appeal to Cas is welcomed as it will provide a new impartial view on the matter. Additionally, and interestingly, the authenticity of the emails upon which the UEFA decision is thought to have been based has not been contested by City. Nevertheless, the legality and admissibility of evidence collected from hacking will be a question raised before the Cas. Lastly, the decision taken by UEFA against City sits in stark contrast to its dealings with French football club, Paris Saint-Germain (“PSG”) whom the CFCB did not sanction despite PSG spending €400 million on the signing of Neymar and Kylian Mbappe, an amount well beyond their revenue stream for that year.

Whatever the outcome, City’s appeal to the Cas will have politico-reform significance in relation to controlling money and corruption in football. If UEFA’s ban is reversed, it will set a major precedent for elite clubs who are suffocated by the FFP regulations. Equally, if City’s ban is upheld, we may see the billionaire owners of elite football clubs start to make contingency plans elsewhere, which will in all likelihood impact the broadcasting revenues that major leagues are able to command.

The content above was originally posted on CMS DigitalBytes - CMS lawyers sharing comment and commentary on all things tech.