Explaining Man City's £900m 'sham' finances
The Athletic FC Podcast
The episode breaks down the bombshell findings from an independent commission regarding Manchester City's alleged financial misconduct. It e
Key takeaways
- An independent commission found Manchester City overstated revenues by approximately £855 million over nine years.
- The investigation uncovered £66 million in understated expenses that were allegedly covered by the club's ownership.
Main topics
- Manchester City financial charges
- Premier League investigation findings
Notable quotes
The beacons have been lit.
Conclusion
This verdict represents a seismic shift in football governance, leavin
Transcript preview
Speaker 2 (0:00) What does it take to push bold ideas forward? Build new ways of working. And how can businesses help solve society's biggest challenges? Take on Tomorrow is back with a brand new season. Join us as we meet innovators and experts from around the world to discover the secret to building momentum. Visit pwc.com slash take on tomorrow or wherever you listen to podcasts for season five. Speaker 2 (0:35) The Athletic FC. Speaker 4 (0:41) Welcome to the Athletic FC podcast with me, Kate. The Premier League have confirmed Manchester City have been found guilty of almost all the charges against them, as first revealed by The Athletic. Man City have continued to deny any wrongdoing. Today, we'll break down the sham payments and where this scandal heads next. Speaker 4 (1:04) Here with me in the studio, as ever, former England goalkeeper Rob Green. Hello. Hello. Nice to see you. And we're also joined by our football finance writer, Chris Weatherspoon. Hello. How are we doing? Hello, Speaker 3 (1:16) mate. Speaker 4 (1:17) And our senior news reporter, Matt Slater, who is out in Copenhagen at the European Football Club's General Assembly. Hello, Matt. Speaker 7 (1:25) Hello, everybody. Speaker 4 (1:27) This is where it's all happening, Matt Slater. We, of course, spoke about this yesterday on The Athletic FC and David Ornstein explained how instrumental you had been in the reporting of this story. A message, perhaps, that will go down in history from you. The beacons have been lit. I'll be interested to understand where you were at that point and how this has developed from there because the statement that we saw drop on Tuesday from the Premier League was... Incredibly strong. Were you surprised by it? Speaker 7 (2:00) Well, I was clearly in middle earth when I sent that message to fans of Lord of the Rings. Yeah, yeah, it was sort of go, this is it. We've had lots of false alarms, two years of false alarms, cancelled weekends, et cetera, et cetera. But no, clearly last week. I sent something and, you know, the machine kind of word into action and David got it over the line. So, yeah, that was last week. Then we had a weekend of fevered speculation, claim and counterclaim, all kinds of theories being posted. And then yesterday, I'm at the European Club Association, as you point out. Now, what is the European? Sorry, it's not even the European Club Association. It's now called European Football Clubs. I'm confused. It used to be called the G14 back in the day. It's the Rich Clubs Club. Then became European Club Association for a long time. A couple of years ago, changed its name. Yeah, last year, changed its name to European Football Clubs. It is now 900 clubs. And it was an enormous assembly in a sort of cavernous convention centre in Copenhagen. Quite interesting in that on the board is one Ferran Soriano. who is the Premier League's representative at the European Football Club, Ference Roriano, who is, of course, the chief executive of Manchester City and City Football Group. More on him in a minute. Yesterday was just more insanity. And we're all still getting to grips with this. The biggest story of my career, the biggest story in Premier League history, the biggest story possibly, is it the biggest story in English football history? I don't know. It feels pretty seismic because... You know, we're all, there's a load of journos just out of shot over here. Trust me. They're all poking fun at me. And we are, every time we talk, we sort of think of a new possible implication here. Well, what about this? What about that? This is beginning. The ripples of this, this enormous brick has been thrown into a pond and the ripples are still expanding and flowing. And yeah. I'm a little bit overwhelmed. Speaker 4 (4:15) Well, it's good to hear your take on how it's been played out. But just to refer to the Premier League statement, which was then followed by the Manchester City statement, did it surprise you how hard they went? Both of them, in fact. Speaker 7 (4:32) Yes and no. Yes, I suppose, in that we were used to a more diplomatic language. Speaker 7 (4:40) but no when we think about what's being alleged and what's being now found, what an independent commission has agreed with. You know, this really is unprecedented. I know it's a horrible cliche, but we're talking about a conspiracy to cheat over a decade. And often like, you know, I've told my kids the same thing. There's the offense and then there's the lying afterwards. Okay? And the lying afterwards is off the charts. So the level of anger within the game should not be underestimated. The pressure the Premier League have come under, particularly in those crucial sorts of years post-Cas, so post-UEFA's bit of this saga. Don't forget, this is an eight-year story. Premier League came under enormous pressure from Manchester City. uh all through the beginning of its investigation we took a long time and we now know was incredibly thorough incredibly thorough way way more thorough than uefa's and then around the time of the charges which came in february 2023 so no i think i think actually in some ways the premier league statement was quite measured in terms of the depth of feeling there. But they also have to, there's a balancing act in the Premier League, have to constantly sort of walk, which is Manchester City is one, a shareholder. Two, the process isn't over. Three, there are commercial implications for this, one of those ripples. There are other shareholders in the room. who have differing views on how you treat this going forward. And that conversation is live, it's happening right now. So there are lots of things to sort of have in your mind as to how the Premier League dealt with it. Then to go to the ruling, of which we've only seen 40 pages, it's probably 4,000 pages long, very carefully written, very carefully written, to be appeal-proof. So lots of coded language, but even within all that heavy coding, anger, shock, surprise and an underlining of how serious all this is. Speaker 4 (6:43) Rob, how surprised were you about how comprehensive this Premier League statement appears to be on their verdict against City? Speaker 6 (6:50) Yeah, shots fired in football in parlance, as it might be said in the dressing room, and it was, and it's from both barrels and you feel the confidence that they have in the statement, but also more so The surprise was maybe alluding to their self-preservation of the Premier League against the self-preservation of Manchester City. Matt's talking about all the shareholders and the stakeholders in the Premier League itself. Their own existence is at stake with this as well. On a world level, against a Super League level, there's a whole other conversation that's going on with that. I think this is just... them saying we have to give this full severity and they have. Speaker 4 (7:38) So you're basically saying they're both kind of fighting for survival, City and the Premier League. Speaker 6 (7:43) I think the size of it, I think they have to. Speaker 4 (7:46) Chris, we're going to come onto the statements in even more detail and talk about the specifics of them, but I'm just going to read you a couple of bits from them. The Premier League detailed the Independent Commission's findings. The most eye-catching was Manchester City arranged sham contracts, which misrepresented the true agreement between the parties with a number of its commercial partners, as well as relying on sham agreements with others to artificially inflate the club's revenues and reduce its costs. Richard Masters, the chief executive of the Premier League, is also quoted. He says the core decision establishes the facts of what happened at Manchester City during this period. It details how the club systematically broke Premier League rules for nearly a decade. Speaker 4 (8:31) Can you try and explain to us, first of all, what you understand is meant by this word sham that's being thrown around on social media now, like a sort of mantra, and what you take from those specific quotes? Speaker 3 (8:47) Yeah, I mean, yeah, that word sham, it's four little letters, but they speak many words. And yeah, I mean, effectively what they're saying is that, you know, over a period of, it was nine years in the Premier League, they're effectively saying that the commercial revenues that Manchester City reported, you know, in their accounts and reported to the Premier League and reported to UEFA, they're saying that that is the sham. They're effectively saying that, well, City said, on one hand, these are the monies we're getting into commercial revenue. Actually, a vast majority of that money was coming from the Abu Dhabi United group, the guys who own Manchester City. And now, you know, I mean, City's commercial income has been kind of... People have been skeptical around it for a very long time. But I think when this dropped yesterday, I think it was just the sheer scale of it that was shocking. I mean, what the ruling says is that Citi overstated their revenues over a nine-year period by £855 million. £831 of that. Speaker 3 (9:59) Exactly. So I'll tell you what, let's put that into context. That's Speaker 4 (10:01) a Speaker 3 (10:01) big number anyway. Yes. But we hear a lot of big numbers nowadays, especially around football. But let's put that into context. £855 million in overstated revenue is more than the total revenue in those nine years of Aston Villa, of Stoke City, of Sunderland, of Southend, of every English club other than eight, which are the other big six clubs, so five of them. West Ham, Everton and Newcastle United. And those three weren't that far ahead of the A355. So that is the scale of what we're talking about here when we talk about overstated revenue. And effectively, what the commission found, what, you know, UEFA tried and didn't, as Matt said there, didn't particularly successfully prove was that... Speaker 3 (10:47) These sponsorships that Citi entered into with Abu Dhabi-based sponsorship companies like Etihad, like Etizola, there's a couple of others. Effectively, they found that the origin of the money that was ostensibly coming from them was Citi's owners. And I think there's a lot of hubris here because really what we actually find is that as we go through the decade and as Citi are objectively becoming more successful and becoming more... but a bigger commercial brand, the money that actually flowed from the sponsors into the club went down, which is mental because when we're talking about market value, really, basically, as an example, in 2017-18, the amount of money City got from the Abu Dhabi-based sponsors was only £11 million, which, no matter what we think of what the deals were, that is below market value. They got £134 million from... the ownership extensively masquerading as these, you know, sponsors. But I think what that kind of speaks to is that really they, they almost, they appeared not to have cared how the money got in. They appeared to have thought, you know, we can fudge this any way, it doesn't really matter. We're not going to get caught and nobody's going to pull us up on it. But actually now that it's all come out, it just looks, it just looks completely crazy. So, so yes, I mean, there