Manchester City (MCFC) has prevailed in its appeal of sanctions imposed by UEFA for alleged breaches of the UEFA Club Licensing and Financial Fair Play Regulations (FFP) at the Court of Arbitration for Sport (CAS).
As a consequence, serious questions will be asked of UEFA and its ability to enforce FFP regulations as well as whether the regulations themselves need amending.
FFP Regulations
FFP regulations require clubs to make losses of no more than €5m over a rolling three year period. An exception to this rule allows club owners to offset losses of up to €30m over a three year period via equity contributions.
FFP regulations also require clubs to provide UEFA with all necessary information and/or documents and confirm the accuracy and completeness of any submitted documentation.
Man City v UEFA
In 2018 various media outlets alleged that MCFC was receiving equity contributions disguised as sponsorship payments in contravention of FFP, and leaked confidential documents to support the claims. These allegations have not yet been publically confirmed or denied, but UEFA's subsequent investigation found serious breaches by MCFC of FFP by "overstating its sponsorship revenue" between 2012 and 2016. MCFC was also found to have not cooperated with the investigation. Disciplinary measures imposed amounted to MCFC being excluded from UEFA club competitions for two seasons and a €30 million fine. MCFC appealed this decision at CAS.
CAS Decision
CAS found MCFC did not disguise equity funding as sponsorship contributions (Arts. 58-64) but did fail to cooperate with the UEFA Authorities (Art. 56 FFP). MCFC's ban from UEFA competitions was lifted and the initial fine of €30m has been reduced to €10m.
Ramifications
CAS's press release explains that the alleged breaches brought by UEFA were either "not established or time-barred". It appears that a lack of evidence coupled with procedural barriers have resulted in CAS being unable to support UEFA's conclusions. Ultimately, until we see the detailed reasoning for CAS's decision within days - we cannot conclude that MCFC were exonerated.
As with the previous appeals of FFP sanctions brought by AC Milan and Galatasary, UEFA have been left frustrated. CAS has been consistent in holding UEFA to account for its application of the FFP regime. Consequently, the governing body's ability to enforce FFP moving forwards may be limited. This is particularly troubling for UEFA with a similar case regarding PSG currently under investigation. It would not be surprising to see amended regulations soon.
Next Steps
Moving forwards, UEFA do have the chance to appeal the decision to the Swiss Federal Tribunal. The grounds to bring such an appeal are very narrow however and any appeal would likely not take place prior to next season's Champions League.
For MCFC, the Premier League investigation into the same allegations, along with accusations regarding MCFC's recruitment of academy players and third-party ownership, is ongoing. Today is a big win for MCFC off the pitch, but many more may be required in the near future.
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