Manchester City have been left blue in the face after the club became one of the first to fail UEFA’s much-maligned Financial Fair Play (FFP) rules.
The Blues are now facing punishment by UEFA which is likely to be settled with a financial reprimand rather than a ban from European competition.
The Citizens had been confident of been passing the FFP test but in recent weeks that European football’s governing body had become sceptical of how the club increased their revenue streams over the last two years.
Now that City have failed FFP, a ‘directly affected party’ has 10 days to appeal against any attempt by the club to then cut a deal with UEFA to reduce their sanction.
Along with French club Paris St-Germain, who have also failed the test, City have been offered a settlement by UEFA which they are poised to accept.
City are well within their rights to appeal against the fine, however the club is very likely to take UEFA’s slap on the wrist.
Fewer than 20 clubs are set to be punished by UEFA for failing to abide by their new guidelines.
City have been working closely with UEFA to try to ensure they comply with spending rules, which limit losses to £37million (€45million) over two years.
However the current League Cup champions have recorded losses of £149million since 2011, after purchasing the talents of Sergio Agüero, Samir Nasri, Gaël Clichy and Javi Garcia for hefty amounts.
City will be embarrassed and disappointed by the governing body’s decision having tried desperately to curtail the losses incurred by their massive spending on players and infrastructure.
The club’s billionaire owner Sheikh Mansour bin Zayed al Nahyan, who has financed the most successful period in the club’s history, will view this development gravely as he values integrity above anything else.
Since the club was purchased by the big spending Abu Dhabi United Group in 2008 they have become footballing heavyweights and are now major players on the European stage.
The Citizens will now hope that their efforts to reduce their massive losses will be taken into consideration by UEFA.
What will work in the Blues favour is that UEFA have indicated that they will look favourably on clubs who have made genuine efforts to reduce their losses when it comes to deciding on punishment.
Despite their huge losses, City have taken great strides to shrink their annual losses and have reduced them from £98million p.a. to £52million in the last two years.
City are also under further investigation for raising £22.45million from selling their ‘intellectual property rights’ to outside parties.
On top of that, UEFA are examining the structure and market value of the ten-year £350million deal City struck with Etihad to sponsor their stadium, shirt and new training complex in 2011,
Image courtesy of Klearchos Kapoutsis, with thanks.