In the past period of time, the Equalizer column has repeatedly introduced a series of related content of Manchester City and UEFA’s "Financial Fairness Act (FFP)" in the form of translations or original articles. And with the final judgment of the Sports Arbitration Court (CAS) on the case, a big drama came to an end.
Speaking of this case, we must start from the background of the story. In many related articles in the past, in fact, we have repeatedly described the controversy and problems of Manchester City in FFP. But here, we may still need to review this first.
On May 16, 2014, UEFA announced that Manchester City was fined 60 million euros for violating FFP. Since then, as Blue Moon reduced the size of the first team in accordance with UEFA's requirements, the final penalty amount was only 20 million euros.
After the Mansour Chief took control of Manchester City, the Blue Moon Corps immediately opened the "sweeping mode". They can always attract one star after another with high transfer fees and salary every season. In the context of the beginning of FFP promotion, the generous operation naturally attracted the attention of UEFA.
According to the content of the revelation article, Manchester City realized the possible threat of FFP under the huge expenditure, and began to formulate a solution called "Longbow Plan" for this bill.
Interestingly, according to the club’s internal emails, the “longbow” refers to the weapon used by the British to defeat the French in the Battle of Crecy and the Battle of Agincourt, and “Frenchman” obviously refers to promotion. FFP's then UEFA President Platini.
For example, Manchester City will package and sell the player’s portrait rights to a third party, thereby avoiding this cost. Then through layers of dolls, the Abu Dhabi United Development and Investment Group (AUDG), which is owned by the Chief of Mansour, will be sold to the third party. The tripartite company pays related expenses.
For another example, in order to get more sponsorship amount, Manchester City thought of two ways.
On the one hand, Blue Moon obtains sponsorship income for a period of time in advance through a "backtracking agreement" and revises the original sponsorship contract in due course.
On the other hand, they also used related party transactions to finally get a sponsorship contract with an amount exceeding fair value-even if some sponsors cannot come up with the full amount of sponsorship, it does not matter, AUDG will use capital injection to make up.
In addition, Manchester City also used a double contract to attract Mancini to join. According to the documents exposed by the hackers, it was discovered that Mancini had signed a contract to serve as a football consultant for the Peninsula Club in addition to the contract to coach Manchester City-even the salary of the consultant contract was higher than that of the Italian coach. The nominal salary is even higher.
In January 2014, Manchester City submitted the club's financial report to UEFA and stated that they met FFP's requirements for a balance of payments.
But after the CFCB's investigation, Manchester City's "real" financial situation is far less simple than on paper, and Blue Moon apparently concealed content that is vital to them. Manchester City was finally punished for this.
With the release of a series of breaking news articles, what surprised UEFA's Club Financial Control Body (CFCB) is that many of them were not aware of. In other words, Manchester City's violations were much more serious than they were investigating at the time.
Let's go back to the UEFA announcement mentioned at the beginning of the previous section. Behind a seemingly simple statement, there are scenes of undercurrents.
After the report was submitted by Manchester City, the CFCB commissioned PwC’s auditors to review the financial situation of Manchester City. It was found that 84% of Manchester City’s “other business income” directly referred to AUDG and concealed it. A cost of 35 million euros.
The CFCB commissioned Bafang Global’s marketing experts to find that in the club’s sponsorship contracts, 3 of them clearly exceeded the fair value by 80% of the actual market value, generating a total of 5 million euros for Manchester City.
Subsequently, the auditors of PricewaterhouseCoopers went to Manchester to investigate again and determined that its two sponsors were related parties-which meant that Manchester City had hidden capital injection.
In 2012, UEFA revised FFP's penalty rules. One of them is that clubs that violate the rules due to excessive spending can reach a "confession negotiation" with relevant UEFA departments to seek a smaller impact. . If Manchester City did this, then maybe there would be no story behind. But under such circumstances, Blue Moon chose to confront.
From a certain perspective, at least in the eyes of foreign media, Chief Mansour’s investment in Manchester City is more like a national propaganda strategy. Using Manchester City’s influence on the green field, the promotion of the UAE’s national image has also been promoted.
Therefore, it is understandable that things like admitting mistakes are not in the consideration of the club owner.
, Manchester City CEO Soriano contacted the then UEFA Secretary-General Infantino and threatened his preparation to appeal the non-compliance issues in the FFP to the European Court of Justice.
The CFCB is divided into two parts. One is the investigation office, which is responsible for investigating the club’s violations and submitting penalties; the second is the adjudication office, which is responsible for evaluating penalties applications and ultimately implementing penalties.
After the FFP rules were revised in 2012, the club can reach a settlement with the investigation office, which is the “confession and negotiation” mentioned above, and seek a lighter punishment.
The appearance of Infantino changed everything.
If it goes on in this way, then Manchester City should be like Paris Saint-Germain who was investigated for similar issues during the period and directly sign a settlement agreement and accept a modest fine.
But Manchester City chairman Mubarak disagreed.
Quinn, the chief investigator of the CFCB Investigation Office, announced his resignation. The reason is simple. He believes that the agreement that UEFA is preparing to reach with Manchester City and Paris Saint-Germain is too kind.
Judging from the description of the media that got the news, it is obvious that the independence of CFCB has problems. Other UEFA staff intervened in the entire process, such as the aforementioned Infantino.
According to regulations, the deadline for the CFCB Investigation Office to submit penalties to the Ruling Office is in mid-May. However, Infantino's efforts have not been understood by Manchester City, because the conclusion drawn by the investigation office still cannot satisfy Blue Moon.
, Platini met with Vieira, the representative of Manchester City, and prompted Infantino and Manchester City to reconsider penalties. Platini even said in the email that Vieira should tell Mubarak that Manchester City must trust him and they understand the club's efforts.
In the end, Manchester City CEO Soriano
In 2018, Der Spiegel published a series of related articles after receiving relevant revelations. The outside world also understands the other side besides appearance.
We wrote earlier that in January 2014, the CFCB found out after an investigation that Manchester City's "real" financial situation was far less simple than in its financial report.
The reason "real" was quoted in quotation marks was that UEFA knew at the time that Manchester City had a cumulative deficit of 188 million euros in the first two seasons. Although this figure seems a little outrageous, the real deficit of Blue Moon is even more. According to the news, the club's total loss in the 2009-11 season has reached 451 million euros.
With the exposure of a series of evidence, the credibility of UEFA and FFP has been challenged. In February 2019, they reopened an investigation into Manchester City’s violations. The Investigation Office also contacted Manchester City from this period and formally informed Manchester City in March that it would investigate the club on the content exposed by the media in accordance with FFP procedures.
In May of that year, the Investigation Office gave a recommended punishment opinion. According to the normal procedure, the opinion will be submitted to the ruling office, and a formal punishment will be finally issued. According to the situation at the time, Manchester City will be banned from participating in the Champions League for at least one season.
The club initially focused on the issue of leaks. Also in May, before the investigation office gave a penalty opinion, media such as the New York Times and The Associated Press successively reported that Manchester City was facing a suspension.
Manchester City once contacted the investigation office about the leak, but the chief investigator said that the actions of the members of the investigation office did not harm the rights of Manchester City, and they adhered to an independent, objective and fair approach. However, after Manchester City's complaint, the media's exposure to the relevant penalties continued to flow out.
On May 24, 2019, Manchester City initiated an appeal statement in CAS based on this issue, and formally submitted an appeal on June 11. Manchester City believes that based on the "Sports Arbitration Code", UEFA should guarantee the confidentiality of the procedure and cannot disclose the punishment opinions to third parties including but not limited to the media.
Manchester City also expressed in the opinion that the penalties obtained by the investigative office are beyond its authority. Regarding this punishment opinion, they believe that the investigation office has reached the final opinion before the investigation process has been completed, but in fact they should not be able to reach an opinion until the investigation has been completely completed.
This time, the investigation office concluded that the punishment opinion occurred after the two parties reached an understanding in 2014, and the investigation of the case exceeded the five-year time limit.
In addition, Manchester City also mentioned the issue of procedural fairness. Blue Moon believes that the investigation and punishment opinions lack procedural fairness, and the disclosure of the punishment opinions themselves and their results has caused serious negative effects and losses on Manchester City.
In addition to the "Sports Arbitration Code", Manchester City also cited the "Swiss Criminal Law", the "Swiss Federal Constitution" and the "Swiss Civil Procedure Law", which are also applied in related FIFA cases.
UEFA also submitted their submissions. Regarding the penalties of the investigation office, they stated that the Manchester City case is still under trial. When Manchester City appealed to CAS, the ruling office has not yet given the final punishment result, so everything is not conclusive.
Regarding the leakage of opinions, UEFA did not give a direct response in it, but indicated that the chief investigator’s communication with Manchester City did not violate the regulations.
After a tug-of-war between the two sides, CAS determined that Manchester City's appeal was invalid in November 2019.
Before the publication of this article, CAS only announced the judgment results to the media.
The CAS judgment stated that Manchester City had certain problems in cooperating with relevant UEFA departments, but there was no problem of inflating the sponsorship contract amount. Because it violated Article 56 of the FFP, the club should perform the UEFA management agency and the CFCB in detail. , Accurate information disclosure and other obligations, finally ruled that Manchester City should be fined 10 million euros.
Compared with the UEFA announcement in February this year, Manchester City has regained access to the European War in the next two seasons, and the fine has been reduced by 20 million euros.
The first thing to say is that compared with the last time Manchester City applied for arbitration, the issues that Blue Moon was targeting were different this time.
When applying for arbitration for the first time, Manchester City realized that his previous case had been retrial, and the entire trial procedure had completed the first stage, that is, the investigative office had a penalty opinion and handed it over to the adjudication office for trial.
When the entire procedure enters this stage, the club has been unable to reach a letter of understanding through negotiation or negotiation, or the "guilty negotiation" mentioned above. Therefore, Manchester City's decision to attack at this time should be to avoid the club's image and management double blow.
From the content of the previous section, CAS believes that the CFCB has not actually reached the final punishment conclusion, that is, the entire punishment procedure has not yet ended.
In other words, the final punishment made by the ruling office is not necessarily the same as the opinion of the investigation office.
Although the place to apply for arbitration is still CAS, the targets of Manchester City's standoff are still UEFA and CFCB.
At this time, Manchester City can have sufficient reasons to complain about the compliance and timeliness of the procedure. This naturally includes the first stage, which is the part of the investigation office.
From the perspective of procedural fairness, if the revelations of the football decryption website are removed, the CFCB investigators' understanding of the interior of Manchester City will only remain "similar" to the state of the first trial in 2014. Since there was the first penalty that year, in fact, Manchester City should not be fined again, but the result of the CAS arbitration was not the case.
So why do we say that the CFCB's knowledge of Manchester City's status is "similar to the first trial"? The reason is very simple. In the second chapter of the article in "Der Spiegel",
At that time, PwC's auditors bluntly stated in a conference call with the senior management of Manchester City that such a transaction was great for Manchester City, and it was difficult for him to figure out how Fordham would use these image rights in return. Obviously, this is different from what the CFCB knew at the first penalty.
From this point of view, the cooperation between Manchester City and the CFCB is flawed. It is conceivable that CAS fines for Manchester City should be based on this.
Of course, this part of the content is just my personal speculation. As for the actual situation, we still have to refer to the judgment document issued by CAS in the future.
With Manchester City getting a satisfactory result in this arbitration, the voice of the outside world has been divided into two levels. For Manchester City and the fans, this must be a day worth celebrating. The club avoided huge losses and ensured that it can appear in the Champions League next season. They also believe that FFP should not restrict clubs with strong financial resources to spend money.
For some people, they think that FFP is dead, and UEFA and FFP have no credibility. What's interesting is that both groups of people have given a view similar to "If you have money, you can do whatever you want."
After completing the above analysis, I personally prefer that this case has nothing to do with the impact of money. As a neutral institution, CAS operates independently in terms of organization and finance, adhering to the principle of fairness and objectivity. UEFA and FFP did show limitations and loopholes in the case, and Manchester City's defense is also legal.
From an objective point of view, this is a good opportunity for FFP to further improve the system.
The original intention and intention of FFP are good. The football industry needs sustainable development. After the launch of FFP, the development of the entire football industry chain has shown a prosperous scene. The club pays more attention to operation and commercial development, and its accounts are relatively more reasonable.
The problems that emerged in the Manchester City case are worthy of summary by the CFCB. For example, with regard to the issue of the fair value of sponsorship contracts that CAS did not recognize in the case, UEFA has been continuously improving its evaluation methods and methods in recent years.
The case involving Manchester City occurred in 2011-13, which is also when the FFP has just begun to execute.
From a reasonable point of view, it is impossible for a new regulation or system to be perfect when it is established. It needs a continuous improvement process, and it also needs to be flexible and make appropriate adjustments based on actual conditions.
Regarding the latter point, last month UEFA revised the FFP requirements based on the impact of the epidemic, and relaxed restrictions to a certain extent on the premise of promoting the healthy development of the club.
After talking about FFP, we have to talk about the situation in Manchester City. Judging from the content of the previous article, Manchester City are unwilling to compromise. When they first encountered a penalty, they ruled out the option of "active reconciliation".
Compared with Paris Saint-Germain at the time, it is better to say that UEFA took the initiative to reconcile with Manchester City, and reluctantly signed that understanding after the persuasion of Infantino and Platini. book.
The real impact on Manchester City’s image is not UEFA, but the football decryption website. Manchester City has always said that the content of the revelations was taken out of context, but did not deny the authenticity of the content.
After the CAS verdict came out, the famous football journalist Matt Slater said that from the perspective of moral discipline, Manchester City’s violations would not be subject to the timeliness issues in FFP. From this perspective, CEO Soriano and Chairman Mubarak mentioned in the breaking news article are also suspected of violating the regulations.
在CAS判决出炉后，著名足球记者Matt Slater表示，从道德纪律的角度来看，曼彻斯特城的违规行为不会受到FFP时效性问题的影响。从这个角度来看，最新新闻中提到的CEO Soriano和董事长Mubarak也被怀疑违反了规定。
However, Slater did not mention a key person, that is Infantino, who we mentioned earlier, who initially prompted a settlement between the Investigation Office and Manchester City. It can be said that UEFA itself also has internal management problems. If UEFA attacked Manchester City again from this perspective, it would surely cause another wave.
In the transfer market, Manchester City can leave the burden of not being able to participate in the Champions League and enter the future transfer window in a normal state. After UEFA launched new FFP regulations under the epidemic, Swiss Ramble analyzed the financial situation of the top six Premier League teams, including Manchester City.
It concluded that Manchester City's financial situation is above the break-even line required by UEFA of 106 million pounds. It is true that Blue Moon will not completely consume this part of the space in one go, but with the departure of Sane and David Silva and others, Blue Moon will still have considerable maneuverability.