Manchester City – the verdict is only the beginning 

Manchester City – the verdict is only the beginning

The Disciplinary Commission’s finding that Manchester City committed serious breaches of the Premier League’s financial rules over a nine-season period is one of the most significant decisions in English football history. Few legal disputes have captured public attention on the same scale.

Yet the verdict itself may prove to be only the beginning of a much wider legal, regulatory and reputational fallout.

The immediate focus will inevitably be on appeals and sanctions.

The club has said it will pursue the appeal avenues available to it, beginning with a hearing before the Appeal Board and potentially culminating in a challenge before the High Court. However, appeal grounds are typically limited to material errors of law or fact, or serious procedural irregularities. It will not be a full rehearing of the case.

The Commission possesses a broad range of sanctioning powers, from financial penalties and points deductions to other sporting sanctions – perhaps City and its stars will end up having to ply their trade in the Manchester Football League that I once graced for the mighty Boothstown FC.

In the longer-term and subject to the outcome of any appeals process, the verdict may also create opportunities for other clubs to pursue compensation claims.

Previous disputes have arisen in simpler factual circumstances but still proved highly complex, including Sheffield United v West Ham following the Tevez affair and Sheffield United’s subsequent relegation, and more recently Burnley v Everton following Everton’s PSR breaches and Burnley’s relegation (albeit that decision remains subject to appeal).

Any claim against Manchester City would face significant legal and evidential hurdles. However, the potential losses involved may be substantial enough to still make litigation an attractive proposition for well-resourced clubs. Yet the prospect of the Premier League descending into lawfare would be an unwelcome consequence for the once ‘beautiful game’. Sponsors, commercial partners and even players may also need to consider their own contractual positions.

Findings relating to “sham” agreements, misstated accounts and giving knowingly false evidence may prompt consideration of wider regulatory and enforcement issues beyond the Premier League’s disciplinary processes.

The Premier League’s disciplinary process is confidential and has taken several years to conclude. Given the intense public interest in the case, that combination has inevitably prompted questions about transparency, accountability and integrity. It is also worth highlighting that perhaps none of the allegations would have come to light had it not been for the leaked/hacked information in 2016 and 2018 which was mainly reported on by German outlet Der Spiegel.

And then there is reputation. The reputations of the senior executives involved and Manchester City itself will be heavily tarnished, if not left in tatters, unless an appeal is overwhelmingly favourable. The defiant public statements from the club – repeating their “irrefutable evidence” and indicating that the Premier League has subjected the club to an unfounded conspiracy – means the current regime has little room to manoeuvre from a PR perspective.  The Premier League’s credibility as both promoter of a global commercial product and investigator of its own members is also under scrutiny, and this case has perhaps thrown that tension into the spotlight more than ever.

The outcome of any appeal process and the sanctions ultimately imposed will shape the sporting, commercial and contractual consequences for all involved – it could also influence the future of football governance.