Manchester City Fans Should Expect Another FFP Investigation – Part 2
By David Crook
Manchester City and Der Spiegel
In order to tell this story it is worth recounting the parts of the Der Spiegel story which are most likely to generate further interest. These tend to centre upon two points. Firstly that Manchester City somehow have falsely stated the value of their sponsorship contracts. The articles in Der Spiegel allege in detail some mechanisms but its not clear to what extent any of the practices described are either illegal or not followed by many other football clubs.
The second major point alleged is that Manchester City set out to deceive UEFA and the Financial Fair Play regulations. Again the magazine cites various emails in support of their argument but again its unclear what if anything is actually evidenced. Surely every single major business in the world is engaged in a constant battle with meeting regulation and must consider a variety of ways to do that. Some of what is alleged in Der Spiegel could be considered standard business practices.
Of course for what is worth Manchester City did not ‘cheat’ FFP back in 2014 as has been the allegation in the media. In actual fact they failed FFP. This seems an important part of the debate here which has been lost because it did not really matter if they failed by £1 or £100 million. If they were going to fail there is no business reason to not have declared the full extent of the failure.
That is the crux of the difficulty. Back in 2014 City signed a settlement with UEFA governed by confidentiality. None of us really know whether the allegations contained in the leaks reported by Der Spiegel were considered by UEFA then or whether they would make any material difference to the outcome. Its unusual to re-open a settlement because one party decides it no longer likes the outcome.
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The next step in the saga is complicated by posturing and reputations. Why would Manchester City volunteer to submit to further investigation? Much of what is being discussed is commercially sensitive and openness and transparency may undermine business value and strategy. Apple would not willingly disclose its secrets – not because they would horrify people but because it gives competitors commercial edge.
UEFA are being dared to act by all sides in this. Pushed by La Liga and many of the established elite cartel of clubs but trapped by their own actions and threatened by a mire of litigation. All of which would serve to cause difficulty for the game as a whole.
Rather than viewing another investigation as a catastrophe, Manchester City may well feel an investigation, where they can be cleared would actually be a good outcome. So watch the next step carefully. An investigation is likely but may not be unwelcome. It depends to the extent City are actually in the wrong.
The final element being lost in the mire is that some of the allegations seem outside of time limits. Companies are only required to keep detailed 6 year histories so for some of the detail there may be no evidence anywhere.
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All of the leaks have seemingly been designed to cause Manchester City considerable reputational damage, just at the point where they appear to be accelerating into achieving their best ever success. So to fully contextualise this saga it may be best to start thinking about who actually benefits from the allegations against Manchester City and why they may have surfaced at this particular moment.