The Premier League in England has referred defending English Premier League (EPL) champions Manchester City to an independent commission.
The development is as a result of over more than 100 alleged breaches of finance rules since the club were acquired by the Abu Dhabi-based City Football Group.
The referral came weeks before the expected publication of a government white paper set to recommend the establishment of an independent regulator in English soccer.
The regulator is to deal with the game’s finances, club ownership and corporate governance.
Manchester City are the world’s highest revenue-generating club last season, according to Deloitte.
They are alleged to have committed multiple financial breaches between 2009 and 2018, according to the Premier League on Monday.
League rules state that charges such as those faced by Manchester City could, if proved, result in a club being expelled from the EPL in the worst-case scenario.
Offending clubs may alternatively be deducted points, fined or reprimanded.
It remains to be seen what sanctions the commission imposes on Manchester City.
But a stricter stance by the Premier League on club finances could deter potential investors in clubs like Manchester United, according to a sports finance lawyer.
Both Manchester United and Liverpool are seeking new investors.
This is in large part due to Middle Eastern investment in clubs such as Manchester City and Newcastle United and the collapse of a planned Super League, according to industry experts.
Manchester City, who were acquired by City Football Group in 2008, are also charged with failing to cooperate with the Premier League’s investigation, which was launched in December 2018.
They are alleged to have breached rules relating to the provision of accurate financial information.
“………in particular with respect to its revenue (including sponsorship revenue), its related parties and its operating costs”, the league said.
The club, who have won the Premier League title six times since the Abu Dhabi take-over, said they were surprised by the league’s “issuing of these alleged breaches”.
“The club welcomes the review of this matter by an independent commission, to impartially consider the comprehensive body of irrefutable evidence that exists in support of its position,” Manchester City added.
The charges stem from a Premier League investigation into Manchester City’s financial dealings launched four years ago.
This was after the release of a tranche of “Football Leaks” documents obtained by the German publication Der Spiegel.
Manchester City were subsequently banned from the European Champions League by European governing body UEFA for two years.
But they successfully appealed to the Court of Arbitration for Sport (CAS), which overturned the ban in 2020.
The club were fined 30 million euros (32.28 million dollars) by UEFA, which CAS reduced to 10 million euros.
In addition to the charges relating to the club’s revenue and operating costs, Manchester City are also alleged to have not fully disclosed managerial remuneration from 2009 to 2013.
This was when Roberto Mancini was manager.
The club are also charged with failing to comply with Premier League’s rules requiring clubs to follow UEFA’s financial fair play (FFP) regulations from 2013 to 2018.
They are also said to have failed to follow the Premier League’s rules on profit and sustainability from 2015 to 2018.
FFP regulations are designed to stop clubs running up big losses through spending on players.
They also ensure sponsorship deals are based on their real market value and are genuine commercial agreements.
This is also to ensure they are not ways for owners to pump cash into a club to get around the rules.
“The proceedings before the Commission will… be confidential and heard in private,” the Premier League said in a statement on Monday.
“The Premier League will be making no further comment in respect of this matter until further notice.”
