On Friday, Manchester City were hit with a two-year ban from European football for breaching UEFA's Financial Fair Play regulations. Here, theScore explains what these rules are, what City allegedly did, and what happens next.
What is Financial Fair Play?
UEFA succinctly describes Financial Fair Play (FFP) as a means to prove European clubs "have paid their bills." These include paying outstanding transfer installments, compensating players, and covering taxes.
After the 2011 inception of FFP, further restrictions were added which were designed to prevent clubs from falling into debt. The independent Club Financial Control Body (CFCB) studies financial figures each season to ensure clubs don't greatly overspend their revenue over a three-year period.
Punishments for breaching FFP have ranged from warnings to disqualification from UEFA tournaments. UEFA also threatens the "withdrawal of a title or award" but has yet to impose this sanction.
An important aspect of FFP which eventually scuppered Manchester City was its restrictions on how much an owner can put into a club to cover losses.
How did Manchester City get found out?
German magazine Der Spiegel published emails and documents in November 2018 which indicated there was financial misconduct happening behind the scenes at the Etihad Stadium. The records dated back to 2014.
City refuted the evidence and denounced the materials as "leaked or stolen," but Der Spiegel's exclusive coverage sparked UEFA's probe into the club's finances. The formal investigation began in March 2019.
Which rules did Manchester City breach?
The back-to-back Premier League champions were judged to have falsely inflated their sponsorship revenues to disguise the fact Sheikh Mansour bin Zayed Al Nahyan, City's owner and an Emirati royal, was providing most of that income.
Figures from the leaked emails suggest City's main sponsor Etihad Airways funded just £8 million in 2015-16, while the other £57 million to £59.5 million filed as sponsorship revenue actually came from Sheikh Mansour's Abu Dhabi United Group, the private equity firm which owns the Premier League outfit.
With these inflated revenues, City allegedly deceived the CFCB into thinking the club had the financial wriggle room to pay big wages and large transfer fees without breaching FFP rules.
Are Financial Fair Play rules actually fair?
"The aim of financial fair play is not to make all clubs equal in size and wealth, but to encourage clubs to build for success rather than continually seeking a 'quick fix,'" UEFA states.
Ensuring clubs are sustainable can't be a bad thing, but there has been criticism that FFP reinforces teams' statuses. Financial imbalance had already created a deep fissure in the European game, so imposing restrictions that are aligned to clubs' revenues ensured the big stay big. With FFP, smaller sides are extremely unlikely to break into the European elite with their tighter budgets.
"Had UEFA introduced regulations like FFP 20 years earlier, I think it would have made a notable difference," sports writer and broadcaster David Goldblatt said in Miguel Delaney's "How modern football became broken beyond repair" feature for the Independent. "And I think it would have been a deterrent to more egregious foreign owners who have lots of money and political aims."
Did Manchester City shoot themselves in the foot?
In some ways, yes.
City were accused of arrogance during UEFA's investigation. They first described the process as a deliberate ploy "to damage the club's reputation" and The Guardian's David Conn reports City were "hostile and confrontational" throughout. They also apparently submitted inconsistent answers during the investigation.
City asked the Court of Arbitration for Sport (CAS) to stop the probe and even lodged a damages complaint against UEFA. But both pleas failed. The first appeal against the investigation was denied and was followed up by the independent investigatory chamber recommending UEFA sanction the club.
The club had previously broken FFP rules. A UEFA investigation in 2014 found City guilty of breaching the regulations, so the European football's administrative body subsequently restricted the size of Manuel Pellegrini's squad for the 2014-15 Champions League campaign.
What happens next?
Manchester City have already appealed the decision to the Court of Arbitration for Sport (CAS). A City statement described the UEFA investigation as "flawed and consistently leaked" and stressed the need for an impartial judgment on "a case initiated by UEFA, prosecuted by UEFA, and judged by UEFA."
This could drag on for a while.
Meanwhile, the €30-million fine due from City will be distributed to other European clubs. UEFA's website says these solidarity payments will follow "an agreed formula," but admits that formula is yet to be decided on by the organization and its executive committee.