Manchester City have been banned from European competition for the next two seasons, and rightfully so, even if it is quite a few years later than deserved.
Before I actually go into that, I want it to be known that I actually like Manchester City as a club, despite what I am going to type, but, like many clubs in Europe (the list is endless) they’ve needed to be punished for their overspending.
Let’s take you back over a decade to September 2008, when the Abu Dhabi Group (now they’re the City Football Group (CFG)) bought Manchester City Football Club, resulting in the ownership being handed over from Thaksin Shinawatra to Sheikh Mansour.
What followed was both clever and sneaky.
The new chairman had bought the club for £210 million ($378 million at the time), and immediately started spending money on new players. The next three seasons saw the club officials spend a total of $537 million ($173m, $162m, and $202m) on new players, while making a mere $104 million ($29m, $34m and $41m) in return for selling some of the playing staff. That’s a deficit of over $430 million. Over $430 million!
In spite of the loss, everything was going according to plan. That’s when UEFA – the governing body of football within Europe – decided to create the Financial Fair Play rule (FFP), in order to stop clubs spending beyond their means. The rule caused a huge problem for Manchester City, as they were the perfect example of a club spending beyond their means, heading them towards a subsequent ban that was about to be placed on them, and rightfully so.
However, Manchester City were saved thanks to a sponsorship deal that made the club £400 million ($712 million at the time)!! The ten-year deal was for an amount of money that had never been heard of. To put it into context, the deal Arsenal struck with Emirates in 2004 was valued at £90m over 15 years. Around £48m of that came via shirt sponsorship, with the naming rights for the stadium worth only £2.8m a year.
How did Manchester City manage to secure such a lucrative deal?
Well, the stadium actually belongs to the Manchester City Council, and Manchester City FC pays rent. This means that the council actually has the right to name it. Unfortunately, the council was financially struggling at the time, which the club owners took advantage of. Sheikh Mansour offered the council a better rental agreement in return for the naming rights to the stadium.
Obviously, the council agreed – think of it as a “legal” bribe.
That’s when Etihad Airways came in with a gargantuan bid, which was accepted. Saving Manchester City from a ban, and helping the club break even. It seems like a good bit of business, except that Etihad are owned by the Abu Dhabi government, who have a strong connection to the Abu Dhabi royal family. Yep, Sheikh Mansour is a member of that family.
If it sounds like someone taking out money from one pocket and putting it into another, it’s because it is.
UEFA investigated the deal, and despite clear infringement of the FFP rules, City must have convinced them that the amounts involved do not contravene the financial fair play regulations, specifically, the condition that stipulates sponsors with close links to club owners pay a fair price.
Fast forward 9 years, and the ban is here. Manchester City club officials have released a statement saying that they will fight the ban, but I am not sure how. It seems like a losing battle when you dig a little into the spending of Manchester City, which doesn’t read well in terms of breaking even. For example, during the 2015/16 season, the club spent $230 million, then followed that up with $235 million (2016/17) and $350 million (2017/18). In return, they’ve made $213 million from selling players. As a note, remember that these figures don’t include the astronomical figures being paid to players. Hmmmm, good luck getting out of this one.
Hopefully, next to be punished will be Paris St. Germain, of France.
Either way, this news will send shivers down the neck, and back (plus other parts of your body you can feel shivers) of the owners of clubs throughout Europe, knowing that no club is untouchable.