How Man City Hid £900 Million

Transcript

Ferran Soriano, City’s chief executive, recorded a video for shocked staff. He called the case a Premier League conspiracy theory. The league had just published an independent commission’s finding: City made its income look bigger, and its costs smaller, by more than 900 million pounds over nine seasons. Most of that, the commission found, was owner money dressed up as sponsorship. How did that work, and how did one fake link expose it? And with City appealing, what could it still lose?

The summary the league published on the 29th of September runs to forty pages, heavily redacted, and it turns on two numbers. Three people had written it, an independent commission of judges and financial experts. Across the seasons from 2009 to 2018, it found, Manchester City booked 949.94 million pounds from its Abu Dhabi sponsors into its accounts. The sponsors themselves, who are not named in the published summary, had paid only 119.25 million pounds of it. That is about one pound in every eight. The rest, the commission found, was funded by Abu Dhabi United Group, the company that owned the club. And the word the commission kept reaching for, again and again, was sham. Manchester City, ten-time champions of England, were found guilty of every charge relating to serious breaches of the league’s financial rules.

The commission also upheld all but one of the charges that City had failed to co-operate with the league’s inquiry. That one was the only charge in the whole case that did not stick. The commission wrote that the club had made concerted efforts to stop and frustrate the investigation. It went further, in a line that could have serious consequences for those involved: a number of important club witnesses gave false evidence in key respects, and some of them knew it was untrue.

Richard Masters, the chief executive of the Premier League, put his name to a statement the same day. He said the decision established the facts of what happened at the club in that period. Then the line the league had chased since 2018: it details how the club systematically broke Premier League Rules for nearly a decade. Masters called it the most significant disciplinary case in Premier League history. What the document did not say was the punishment. That would be decided later, behind closed doors, in a separate hearing.

The reply came within hours, and it did not blink. Manchester City said it was disappointed and surprised, that the club was innocent, and that a comprehensive body of irrefutable evidence supported every one of its positions. It promised to be relentless in any and all appropriate regulatory and legal forums. That week, City were top of the table, five wins from five under their new manager Enzo Maresca. And according to reporting on the case, the club had known the verdict since that July, through an entire summer of transfer spending.

Ferran Soriano, the club’s chief executive, said nothing when BBC Sport approached him. Instead, in the video to staff, he walked them through exactly why he believed the commission had got it wrong, and reduced the whole case to a single sentence. The whole Premier League case against us is based on a single false accusation.

The accusation, in Soriano’s own words, was that the owner’s personal money was somehow and secretly put into the club via some sponsors from Abu Dhabi. This is just not true, he told them. The commission found the opposite, and its decision shows how the money moved.

The owner was Abu Dhabi United Group, the company of Sheikh Mansour bin Zayed Al Nahyan, a member of Abu Dhabi’s ruling family, and it bought a mid-table City in 2008. Four years later, that same mid-table club were champions of England. The Guardian reported that he had pushed at least 500 million pounds directly into the club in his first two years of ownership, to offset what it was spending on transfers. The early spending brought in Yaya Touré, David Silva, Samir Nasri and Sergio Agüero. None of it was hidden. Then the rules moved.

In 2009, UEFA announced Financial Fair Play, a set of regulations designed to stop clubs spending more than they earn. The Premier League later finalised its own profit and sustainability rules with the same aim. Under those rules, an owner’s own money does not count as money the club earns. Sponsorship does. And the commission found City could already see what was coming: the club was worried its losses for the 2009 to 2010 season would break the Premier League record of 140 million pounds, and that large losses would keep coming for another five years.

So at the start of 2010, the commission found, the club built what the decision calls a disguised funding scheme. Sponsorships and commercial relationships went into the books at values far above what the sponsors themselves would ever pay. The owner’s company, the commission found, covered the difference. Over the whole period, that gap came to 830.69 million pounds. And it worked immediately: the commission found the scheme allowed City to avoid recording what would otherwise have been the largest single-season loss in Premier League history.

Look at what that did in the seasons that actually mattered. By the BBC’s count, in the three seasons City won the title inside that period, the club recorded 360 million pounds in sponsor fees. Only 43 million pounds of it was legitimate. The rest came from the owners, disguised.

Inflating income, the commission found, was only half the trick. The other half was pushing costs out of sight. The owners set up and funded a company called Fordham, which the decision describes as a front for them, and Fordham paid City inflated amounts for its players’ image rights, the right to use their names and faces in advertising. The commission called that a sham circular arrangement funded by the owners, and other sham deals topped up what players and the manager earned, so City recorded lower costs than it really had. According to the decision, Roberto Mancini, City’s manager at the time, was handed an extra contract as a consultant to one of the owners’ clubs in Abu Dhabi, which lowered the salary City had to pay him without touching his total package. In all, the commission found a further 70 million pounds of costs hidden this way. Add that to the 830 million pounds of disguised sponsorship, and you reach the commission’s headline figure: more than 900 million pounds. Year after year the accounts would be filed that way, the commission found, hiding the gap from auditors and regulators, until the club’s private emails got out.

Without the documents one young Portuguese man leaked, ESPN wrote after the verdict, most likely none of this would ever have come to light. By January 2017, a senior Manchester City official had opened a link that looked like a financial report from UEFA, the governing body of European football. It was a trap: by published accounts of the leak, a phishing attack that let that young man, Rui Pinto, into the club’s servers. Pinto has always denied being a hacker, and says the documents were simply handed to him.

Nearly two years passed before the public saw them. In November 2018, a group called European Investigative Collaborations announced it would release confidential files on financial wrongdoing in football. Der Spiegel, the German magazine, published the Manchester City material across four days. The magazine said the emails showed backdated contracts, illusory sponsoring payments and cavalier business practices, in a phrase it quoted: we can do what we want.

Manchester City’s written reply ran to two sentences. The club would not comment on out of context materials purportedly hacked or stolen. Then this: the attempt to damage the club’s reputation is organised and clear. The statement never called the emails false. It called them out of context, and argued about where they came from.

And this was not the club’s first entry in UEFA’s files. Back in May 2014, UEFA had found City guilty of breaking its financial rules, fined the club and capped what it could spend on transfers.

In March 2019, UEFA opened a formal investigation into the leaked documents. The club’s own statement welcomed it, calling it an opportunity to end the speculation resulting from the illegal hacking and out of context publication of City emails. Read that again. The club said it welcomed the investigation.

It got one. The verdict landed the following February: the club had committed serious breaches by overstating its sponsorship revenue in its accounts and in the break-even figures it sent UEFA between 2012 and 2016. The punishment was two years out of the Champions League and a fine of 30 million euros.

It held for five months. That July, the Court of Arbitration for Sport, the appeal court for sport, lifted the ban and cut the fine to 10 million euros. The court found that most of the alleged breaches were either not established or time barred. Time barred means the conduct was too old to punish under the rules, whatever it was.

But one file had been opened quietly, and it was still open. The Premier League had started its own investigation in December 2018, within weeks of that first Der Spiegel story. The public only learned it existed when City lost a jurisdiction ruling that allowed the media to report it. Same emails, same money, same owner: so why has the second case stuck so far, when the first one fell apart on appeal?

This time, City’s own explanation was tested in a hearing that sat for forty two days, and the commission rejected it. The case had begun in February 2023, when the Premier League charged City with 115 breaches of its rules and referred them to an independent commission. The largest block was 54 counts of failing to provide accurate financial information.

In September 2024 the hearing opened, in private, as the league’s rules require. City’s defence was led by the British barrister David Pannick. The experts called ranged across the politics of Abu Dhabi, fair market value, accountancy standards and even Swiss law. When they finally wrote, the panel had every hearing document in front of them, plus verbatim transcripts of each witness running to about 7,000 pages.

The club denied there had ever been any disguised funding scheme of the kind the league alleged. Its case was that the Abu Dhabi sponsors had always been liable for every recorded fee, and had paid it from their own funds. The sponsors had, from time to time, applied to the Abu Dhabi government for financial assistance towards those fees, and the applications were granted. Each time, as ESPN noted, the amount wired was exactly what the sponsor needed to pay City.

Premier League rules allow state-owned bodies to sponsor clubs. So on City’s case, state money helping a sponsor pay would be allowed, while owner money dressed up as sponsorship would not. The commission rejected the club’s submission as untrue. It was, the panel wrote, an explanation concocted well after the event in an attempt to obscure and conceal the realities of the disguised funding scheme. And on the conduct itself: by its conduct the club clearly intended to circumvent the rules.

Then the panel turned to the people who had sat in front of it. City had supplied 24 witnesses. Most of the witnesses of fact, the commission said, were doing their best to give honest evidence. Its finding about some of the club’s important witnesses went further: they had been dishonest. A sports lawyer told The Sporting News that the club’s side had played Russian Roulette with the club. Once the panel thinks your witnesses are liars and your excuses are concocted, the lawyer said, the whole thing caves in on itself.

So what was left to take to an appeal? Sources told BBC Sport that City would argue the same thing again: the key sponsorship deals were funded by the Abu Dhabi government, not the owners. The Sporting News reports the club believes its bank statements and wire transfers deserved more weight. The BBC has pointed out that this argument may be undermined by something City’s principal sponsor said years earlier. In 2015, Etihad Airways, Abu Dhabi’s national carrier and City’s principal sponsor, which the published findings do not name, answered questions from a United States government investigation into state-owned airlines. The airline called it false that the Abu Dhabi government had paid for its sponsorship of Manchester City. Etihad told the United States government it funded the sponsorship from its own liquidity.

If the appeal fails, the verdict stands. And it still comes without a bill. That goes to a separate hearing with the same commission, held in private, with no date announced. The menu sits in section W.64 of the Premier League handbook, and it opens gently, with a reprimand. Then it climbs: an unlimited fine, points deductions, expulsion from the league, and a clause letting the panel impose any combination of those, or any other penalty it thinks fit.

So what could it cost? Sources told ESPN the fine alone could reach 500 million pounds, precisely because the rule-breaking ran for so long. And it would still be less than the money the commission found the owners pushed through those sponsorship deals.

A fine has an obvious problem, and a former Manchester City chairman said it out loud. David Bernstein told the BBC that the sanctions cannot just be financial, because money does not mean much to the Abu Dhabi owners. He said that if the appeal fails, City cannot stay in the Premier League, and he said it as a supporter of seventy years. ESPN’s reporting points the same way: the clean option is a points deduction so large, at least sixty, that relegation, dropping down to the Championship below, stops being a contest and becomes arithmetic. Club sources inside both the Premier League and the English Football League told ESPN they expect City to end up outside the top division if the guilt stands.

Expulsion is the other door, and it needs votes. Fifteen of the twenty Premier League clubs would have to ratify it, and City would then have to apply to get back in somewhere. The nightmare version runs all the way down to tier nine of the English pyramid, against clubs like Uppermill, Squires Gate and Maine Road, a side formed by City supporters. But sources told ESPN that the EFL’s clubs would almost certainly vote City in, by a large majority. One Championship official put it plainly: the commercial directors in the EFL will be delighted by the prospect of a home game against City and the financial windfall that would bring.

That is the league’s invoice. The queue behind it is longer. The i Paper reported that four clubs, Tottenham, Manchester United, Arsenal and Liverpool, are prepared to take legal action, and that bill could run to hundreds of millions of pounds. ESPN says such claims are not only about lost titles: they are about lost revenue, and about City’s spending driving up costs for everybody else. The Guardian’s Barney Ronay pushed the logic to its edge, writing that arguably everyone who bought a Sky Sports subscription in that period now has a claim against City.

And then there is the taxman. Tax Policy Associates calculated that the sham contract with Roberto Mancini left as much as 12 million pounds of tax unpaid. With a penalty charge on top, the report says City’s liability could reach 24 million pounds. Dame Meg Hillier, chair of the Treasury Committee, then wrote to HMRC and asked whether it had requested the redacted documents in the commission’s report. She said she would welcome reassurance that the department was seized of the importance of these issues and of the public interest in the case. The football finance expert Kieran Maguire is not convinced it leads anywhere, pointing out there is no corporation tax to recover, because City would have lost even more money without the schemes. And precedent suggests none of the league’s punishments will land until a second panel rules on the verdict itself.

On the first day of October, Manchester City lodged its appeal. The statement was short. The commission’s ruling, it said, contained clear material errors, of law, principle and fact, and was unsafe. A new appeal board will hear the case in private, appointed by Sir Gary Hickinbottom, a former Lord Justice of Appeal in the United Kingdom. The rules give it twelve weeks from the filing, which lands on Christmas Eve, though that deadline can be set aside if needed. One rule matters more than the calendar. No new evidence can be brought in.

The day after that filing, English football’s governing body broke cover. The Football Association said the verdict had significant implications for the integrity of the game, and that it would take action where appropriate. In Westminster, the Business, Innovation, Science and Trade committee, chaired by Liam Byrne, wrote to the government and the Financial Reporting Council. Clubs that follow the rules, he said, need confidence that the rules are enforced fairly.

Then City’s principal sponsor spoke up. Etihad Airways, the state-owned national airline of the United Arab Emirates, said it was considering legal action against the Premier League, claiming the published findings carried damaging implications even though the airline is not named in them. It said it categorically rejects any finding, conclusion or implication that it was ever involved in improper commercial arrangements. The airline turned to the American law firm Quinn Emanuel, after nobody from the company was called to give evidence. A sports lawyer called that firm the best in the business, then doubted that Etihad had any ability to sue the league at all.

Underneath all of this sits a regulator that was only established in 2025. The Independent Football Regulator licenses all 116 clubs in England’s top five tiers, and that licence is what lets them operate. Its chairman, David Kogan, said it has powers to assess the suitability of owners, directors and executives, and will use them where there is clear evidence of wrongdoing by individuals. The Sporting News says a failed appeal would put executives, including Ferran Soriano, squarely in its sights. City’s chairman, Khaldoon Al Mubarak, is a harder case: the UK government lists him as an Emirati diplomat, with immunity from prosecution, though it is unclear how that applies to football’s own proceedings.

Christopher Davidson, who wrote a book about Abu Dhabi, told the Guardian he could see no reason the owners would stick around and try to rebuild the reputation. It is embarrassing the royal family now, he said. His read was simple: play out the appeal, because there is nothing to lose, then find a way out before the owners are declared unfit.

And there, inside the core decision, sits the strangest line in the whole document. Article 70 deals with one person, and the name is blacked out. The commission found no direct evidence that this person was aware of the disguised funding scheme or authorised it, and concluded that the scheme was operated without his knowledge. ESPN asked whether that person might be the chairman, Khaldoon Al Mubarak, or Sheikh Mansour himself. The Sporting News says the name is widely assumed to be Sheikh Mansour.

Sources told ESPN that City’s fate should be settled this season, with the sanctions hearing likely running alongside the appeal. Use the full twelve weeks, and the verdict could land in late January, or by ESPN’s count as late as the eighth of February.

Behind the appeal wait four rival clubs, reportedly ready to sue, and MPs pressing HMRC over the tax. If the findings survive, City’s executives could face a regulator that judges whether they are suitable to run a club, while the name behind the black bar may walk away clean. And the fight moves to where Manchester City may play at all.