London (Reuters) When football’s governing body in Europe began to get tough on the sport’s finances from 2009 onwards, English football club Manchester City came up with a two-pronged counter-attack.
According to a trove of documents relating to football, one Manchester City plan was to get more money from sponsors, another was to offload some costs relating to players’ image rights.
In both cases, the club’s owner, an Abu Dhabi royal, would foot some of the bill, according to “Football Leaks” documents obtained by the German publication Der Spiegel.
The documents were reviewed by Reuters in partnership with European Investigative Collaborations, a consortium of media organisations. In 2009, the executive committee of the sport’s governing body in Europe, the Union of European Football Associations (UEFA), approved introducing Financial Fair Play rules.
This was to prevent clubs piling up too much debt and super-rich owners dominating the game. The rules were implemented from 2010 onwards. Under those rules, sponsors, suppliers or other commercial partners related to the owner of a club must pay only a market rate in transactions with that club.
Related parties cannot simply funnel in unlimited money on behalf of the owner. Breach of the rules can lead to clubs being banned from UEFA competitions.
On Nov. 2, Reuters reported how UEFA’s regulatory arm, the Club Financial Control Body (CFCB), took the view that some Abu Dhabi sponsors of Manchester City were related parties. It also submitted that their deals with the club were above market rates.
The club disputed that view, and UEFA’s control body ultimately allowed Manchester City to record the sponsorship deals at favourable levels that boosted its income. On Wednesday, Reuters details new information from emails and other documents relating to further arrangements involving Manchester City.
The club was bought by Sheikh Mansour bin Zayed Al Nahyan, half-brother of the ruler of Abu Dhabi, in 2008. Those arrangements boosted the club’s finances by tens of millions of pounds, helping it to buy star players.
Manchester City said in a statement responding to questions last month: “We will not be providing any comment on out-of-context materials purported to have been hacked or stolen from City Football Group and Manchester City personnel and associated people.
“The attempt to damage the Club’s reputation is organised and clear.”
The club did not respond to further questions put this month.
The club said in an April 2014 response to UEFA investigators about sponsorship that it had complied with the rules and “adopted a good faith and correct interpretation of the regulations.”
UEFA said in an emailed response to Reuters that it could not comment on specific cases due to confidentiality obligations. The UEFA control body chairman declined to comment, citing confidentiality obligations.
In an overall statement about the Financial Fair Play rules, UEFA said the rules were there to help clubs become financially sustainable.
It also said it was “very satisfied” with how they had been applied and the results achieved, noting an improvement in the finances of European football clubs.
“No system is perfect but on the whole FFP (the Financial Fair Play regime) has increasingly protected European football from financial difficulty since its introduction in 2010,” UEFA said.