Manchester City inflated their commercial revenue by £830.39million ($1.08billion) between 2009 and 2018 through “sham contracts” and a disguised funding scheme, according to findings published by the Premier League’s Independent Commission on Tuesday.
The findings detail how Abu Dhabi United Group (ADUG), the ownership vehicle controlling the club, provided hundreds of millions of pounds to Manchester City while the funds were presented as commercial sponsorship revenue.
According to the Premier League, the commission found that City arranged ‘sham contracts’ with several commercial partners as part of a “disguised funding scheme” that artificially increased the club’s revenues and reduced its reported costs.
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Premier League chief executive Richard Masters said Man City had “systematically broken Premier League rules for nearly a decade”.
The commission also found that a number of important club witnesses gave false evidence during the proceedings, with some knowingly providing “untrue and dishonest evidence”.
£830m in disguised owner funding
Between 2009/10 and 2017/18, City declared £949.94million in commercial revenue from Abu Dhabi-linked sponsors. However, only £119.25million was paid by the sponsors.
The remaining £830.39 million was classified as “Tagged Sums” and paid to the club by ADUG.
The commission found that the arrangement allowed City’s owners to directly fund the club while presenting the money as commercial revenue.
During the 2017/18 season, City reported £145.73million in commercial revenue. The commission found that only £11million was paid by sponsors, while £134.73million came from the owners.
City also recorded £360million in sponsorship fees during the three seasons in which they won the Premier League between 2011/12 and 2017/18. According to the commission, only £43million of that amount represented legitimate sponsorship payments.
“The relevant sponsorship agreements were found to be a sham, or at minimum did not reflect their economic substance,” the commission said.
Commission cites deliberate conduct
The written findings said the commercial arrangements involved “deliberate or reckless conduct intended to circumvent the Premier League rules”.
The commission also found that the scheme enabled City to avoid recording what would otherwise have been the Premier League’s largest single-season loss in 2009/10.
In one instance, a £9.9million gap in the club’s accounts for 2012/13 was “plugged” to prevent a breach of the regulations.
The commission said modified agreements were produced within days without the relevant Abu Dhabi sponsors being approached. The agreements purportedly increased sponsorship fees and included payments for bonuses linked to events that had already taken place and a US tour.
City found guilty of almost all charges
The Premier League said the independent commission found City guilty of the financial-rule breaches brought against the club between 2009/10 and 2017/18, while one charge relating to non-cooperation with the league’s investigation was not upheld.
The commission said some important club witnesses gave false evidence in key respects, with some knowingly providing “untrue and dishonest evidence”.
Manchester City have denied wrongdoing throughout the case and have the right to appeal the commission’s findings.
