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Explained: £77 million loss, Pep Guardiola exit loom for Manchester City

After Manchester City's two-year-long ban from all UEFA competitions, will the club appeal the ruling and how strong is their case? What happens to Pep Guardiola? How will the Premier League react?

Written by Shamik Chakrabarty | New Delhi |
Updated: February 15, 2020 7:41:41 pm
Explained: £77 million loss, Pep Guardiola exit loom for Manchester City Manchester City has been banned by UEFA for “serious breaches” in financial regulations. (Source: Reuters)

Manchester City have been banned from the Champions League and all UEFA competitions for two seasons by the European football governing body for allegedly breaking UEFA’s Financial Fair Play (FFP) rules. They have been slapped with a fine of 30 million euros (£25 million) as well.

The club will now appeal to the Court of Arbitration for Sport (CAS). But as things stand now, City will be out of the Champions League for the 2020/21 and 2021/22 seasons. Also, they might face points deduction from the Premier League that pertains to the UEFA’s FFP rules.

What’s the offence?

The UEFA’s Club Financial Control Body (CFCB) have found City guilty of inflating their sponsorship revenue by deception. It follows an investigation that had been initiated after German magazine Der Spiegel published ‘leaked’ emails and documents. As per the allegation, City owner Sheikh Mansour bin Zayed al-Nahyan was sharing the bulk of the £67.5 million-a-year sponsorship of the club shirts, stadium, and academy via Abu Dhabi’s Etihad airline. It has been alleged that just £8 million of the sponsorship was directly funded by Etihad. The CFCB have found City guilty of misrepresenting the true sources of sponsorship income.

Who was the whistleblower?

Rui Pinto, a Portuguese hacker, gained access to club emails and sent them to the press. The 31-year-old is currently in prison at Lisbon for the Football Leaks scandal, but it was his hard work that ‘exposed’ City.

READ | Meet Rui Pinto: The whistleblower who exposed Manchester City

Why has the Manchester City ban sent shockwaves?

To start with, City will be out Europe’s elite club competition for two years and the financial consequences could be huge. Last season, the club had earned £77 million from the Champions League, while their total profit was £10.1 million. So, if the ban is not overturned by the CAS, City would be hit hard financially. They will have to lower the wages of their players that might prompt departure en masse. Also, two seasons out of the Champions League and the subsequent losses could see them fail the FFP again in the future.

Manchester City ban: Man City were knocked out by Tottenham Hotspur in the quarter-finals last season. (Source: File Photo)

When will Manchester City appeal and how long the proceedings could take?

City have said they will “commence proceedings with the Court of Arbitration for Sport at the earliest opportunity”. But there’s no time-frame with regards to the CAS hearing and the verdict. Usually, the CAS fast-track high-profile cases, like they expedited doping cases before Olympics. Given that City’s ban is for the next two terms, it is expected that the CAS would adhere to the ongoing sporting calendar.

How strong is Manchester City’s case?

On the face of it, the club questions the fairness of the UEFA process. They have said as much through a statement released on Friday. Also, they could use the result of a probe against Paris Saint-Germain (PSG) as a reference point. The case against PSG was dismissed as it was decided that the club’s sponsorships more or less corroborated the value that PSG declared, contrary to what an independent valuation had suggested. Vibes in European football circles, however, are not sympathetic towards City. For example, La Liga chief Javier Tebas had been rooting for the ban throughout the UEFA investigation. Last night, he welcomed the decision.

What about Pep Guardiola’s future?

Going by the social media trend, City fans are now convinced that their manager will part ways with the club. Guardiola is usually a stickler for seeing out his contracts and his City contract runs until the end of the next season. But for a super manager like him, it will be interesting to see if Guardiola stays put at City if there’s no Champions League football. Juventus reportedly have offered the Catalan a blank cheque.

Manchester City ban: Pep Guardiola’s contract runs out at the end of 2020/21 season. (Source: File Photo)

What about Manchester City’s star players?

From Sergio Aguero to Kevin De Bruyne – they too might seek transfers if there’s no Champions League football. If City are eventually forced to reduce the wages of their star players, they run the risk of losing them. Players are not at fault in this case, which could be their excuse to move on.

What if Manchester City win Champions League this season?

City’s next match – a round of 16 tie – is against Real Madrid. And even if they go on and win the tournament, they will be out of the Champions League for the next two terms if the CAS uphold the ban.

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How will the Premier League react?

The Premier League has its own licensing, but it pertains to the UEFA’s FFP. So it’s likely that the Premier League will act as well. Points deduction for City is considered be an option.

Will a fifth-place Premier League finish secure CL spot?

Yes, if City’s ban is not overturned. At the moment, Sheffield United, Tottenham Hotspur, Wolverhampton Wanderers, Everton, Manchester United, and Arsenal are vying for it.

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