The phone rang at 8am, and the Manchester City communications official answered right away. A reporter was on the line, requesting comment on the news emanating from the Middle East that morning in 2008: that City, a team with an unremarkable history and dust gathering in its trophy cabinet, had just been purchased by a wealthy Arab sheikh, the brother of the ruler of the United Arab Emirates.
“Have we?” the City official replied, apparently unaware that the deal that would transform City’s fortunes and upend European soccer had been finalised overnight. “I’m going to have to call you back.”
Within an hour, the news that Sheikh Mansour bin Zayed al Nahyan had become the owner of Manchester City was out. A new era had begun. With the stroke of a pen, a venerable, well-liked and occasionally tragicomic member of English soccer’s establishment had become one of the richest teams on the planet, a usurper-in-waiting to the game’s elite.
Over the next decade, that is precisely what has happened.
[ Leaked emails reveal Manchester City received payments from Abu DhabiOpens in new window ]
Bankrolled by its Gulf ownership’s ambition and seemingly limitless wealth, City began signing star players and collecting trophies one, two, three at a time. In doing so, they not only toppled their neighbour and rival, Manchester United, as the pre-eminent sporting force in the city, they also left the rest of the Premier League trailing in itheir wake too.
But their successes and their spending have brought years of scrutiny, and grumbling that Manchester City – allegedly through inflated sponsorships, secret contracts and muscular legal manoeuvring – weren’t playing by the same financial rules as everyone else.
On February 6th, the Premier League made that case too, quietly uploading a statement to its website announcing that it had charged City with a laundry list of financial rules violations.
City have expressed surprise at the charges. The club has long rejected claims of financial misdeeds as an “organised and clear attempt” to damage its reputation. Last week, the club said they welcomed the chance to present their “comprehensive body of irrefutable evidence” that they had done nothing wrong.
The stakes are hard to overstate. Under the rules of the Premier League, City, if found guilty, face a range of punishments up to and including expulsion from the league. It is little wonder, then, that a club that has spent years waging clandestine legal wars to defend its interests, and its name, would now be digging in for their most serious fight yet, one that threatens to bring all that it has built crashing down.
Manchester City might be the only soccer club in England whose fans would unfurl a 100-foot banner to herald the hiring of the team’s newest lawyer. Yet there it was on Sunday: 6ft-high block letters declaring, “Pannick on the Streets of London.”
The banner, celebrated the news that City had retained the services of the respected British lawyer David Pannick. And while the fans’ public devotion to the club’s newest cause, and its newest champion, was colourful, it was not particularly unusual.
Many of those same fans have long cheered City’s pugnacious stance in the face of accusations and the reliance on an army of lawyers to defend the club’s interests, be it in financial cases brought by Uefa; accusations that the club’s wealth has unfairly tilted the playing field; or threats of sporting sanctions from the Premier League or anyone else.
[ Premier League charges Manchester City over alleged financial rule breachesOpens in new window ]
The supporters’ disdain is matched by the official club line: Manager Pep Guardiola last week painted the club as a victim of attempts to undermine it by its rivals, days before the crowd at City’s stadium booed the Premier League anthem and sang, “We’re Man City and we’ll cheat when we want!”
Pannick, a bespectacled, Oxford-educated 66-year-old, is no stranger to such fights. In 2020, he advised City in their successful appeal of one of the harshest sanctions soccer’s financial regulators had ever handed out: a two-year ban from the Champions League.
That case had grown out of an infamous leak of a trove of City emails, messages and documents known as Football Leaks. The product of a hacking campaign led by a Portuguese college dropout, the documents appeared to reveal years of a financial sleight of hand in which City evaded soccer’s cost-control rules by inflating the value of their sponsorship revenues.
But the leaks also pulled back the curtain on much more: the contempt that City executives and their lawyers held for soccer’s financial rules and the individuals tasked with enforcing them.
Among the charges the club faces are several suggesting it has obstructed the investigation, accusations mirrored by those alleged in the UEFA case
In one email, a top City lawyer wrote that Khaldoon al Mubarak, the team’s chairman, had said “he would rather spend 30 million on the 50 best lawyers in the world to sue them for the next 10 years” than agree to any financial penalty. In another, a lawyer appeared to celebrate the death in 2014 of Jean-Luc Dehaene, the chief financial investigator of the seven-member Uefa panel responsible for policing club finances.
“One down, six to go,” Simon Cliff, City’s legal chief, replied to a colleague who informed him of Dehaene’s death.
But back to 2008. Manchester City’s new Gulf owners hit the ground running. Only hours after the buyout by Mansour was announced, the club signed Robinho, a Brazilian forward then at Real Madrid. The price was the highest ever paid by a British club for a single player.
Within months, the deep pockets of the Abu Dhabi United Group, the investment vehicle for the new ownership, and a new class of wealthy owners were already driving up prices for players across Europe. And soccer’s old guard began pushing back.
Worried about growing losses across the industry and alarmed by the seemingly unlimited spending ability of Russian billionaires like Chelsea’s Roman Abramovich and multibillion-dollar Gulf investment funds like the one that controlled City, European soccer officials announced plans for new cost-control regulations aimed at tackling clubs’ soaring losses and growing debts. The Premier League, too, began to formulate its own financial regulations.
The regulations – in their crudest form – limited the amount of money clubs could lose in pursuit of on-field success. So it became imperative for City to find new sources of income before the regulations came into effect.
The club’s management knew exactly where to look. One after another, companies linked to Abu Dhabi and the United Arab Emirates signed on as City sponsors. The national flag carrier Etihad Airways would soon see its name emblazoned across City sky-blue shirts. The stadium where it played its home games would soon be renamed for the company, too. Etisalat, a telecommunications company that is majority owned by the Emirati government, joined up, too, as would several others.
The deals helped finance the team’s sudden rise – City won the Premier League title on the final day of the 2012 season, and then added another two years later – but they did not cover all of the team’s spending, and that caught the eye of soccer’s financial regulators. In 2014, Manchester City and the Qatar-owned Paris St-Germain, agreed to a settlement with Uefa after being found to have been in breach of the governing body’s financial regulations.
[ Man City’s Abu Dhabi owners not the sort to back down over banOpens in new window ]
A multimillion-dollar fine was imposed, an outcome palatable to City, but the chief investigator in the case was so angered by the settlement that he quit on the day it was announced. City, meanwhile, went right on spending: on players, on coaches and on lawyers.
In 2018, months after Manchester City’s latest star signing, Guardiola, clinched the first of his four league titles at the club, the German newsmagazine Der Spiegel published a four-part series that it said exposed the foundations underpinning City’s rise.
Citing scores of leaked documents and emails, Der Spiegel rolled out one revelation after another. In one article, it claimed that one of City’s former managers had reportedly been paid more than his annual salary – almost $2 million – for a four-day consultancy contract with another soccer team, one based in Abu Dhabi and also owned by Mansour. In another, it said that Etihad, City’s main sponsor, was paying only a fraction of a sponsorship deal said to be worth £67.5 million pounds (€75.9 million) per season. A vast majority of the money, the article said, was covered by other entities linked to City’s owners or the government of the UAE.
“We mustn’t show the partner supplement if it is going outside the club,” City’s head of finance, Andrew Widdowson, wrote in one leaked email. Manchester City have consistently refused to comment on the content of the leaks because it was “criminally obtained.”
Uefa took notice of the articles and, in late 2018, it said it had opened an investigation into City’s finances. The Premier League, with much less fanfare, did the same.
Uefa investigators found out almost immediately that getting City to co-operate in their inquiry – assistance that was required under the governing body’s statutes – would be one of their biggest challenges.
Yves Leterme, the chief investigator in the case, said that the case dragged on for month after month as requests for documents were rejected and key witnesses were not made available.
By the time the Uefa investigators finished their work, though, they were convinced that City had committed “a series of very serious breaches” between 2012 and 2016. They calculated sponsorship revenue had been overstated by more than £200 million pounds (about €225 million) in that four-year window alone. A few months later, a judiciary chamber issued its ruling in the case, agreeing with Leterme’s suggestion that City be expelled from the Champions League, UEFA’s richest competition, for two years.
But City then began a new legal fight, bringing an appeal to the Court of Arbitration for Sport.
City have since claimed the ruling that followed as a total vindication of its financial operations, but the court had not weighed in on the specifics of the most serious charges. Instead, City had persuaded the judges that a majority of the case was time barred under UEFA’s own rules. The Champions League ban was thrown out.
[ Ken Early: Pep Guardiola shows he’s no Julius CaesarOpens in new window ]
Meanwhile the Premier League had come under pressure from its own teams to look into City’s books. On Monday of last week, it laid out its charges.
Unlike Uefa, however, the Premier League has no time limit on how far back its investigations can reach. An independent disciplinary panel is being convened to hear the City case. Its result might not be known for months, or even years.
Leterme, though, said he expected that the league’s inquiry – however long it takes – will eventually arrive at the same conclusion he and his colleagues did. “I am convinced that they have been cheating,” he said, “and I am convinced at least they have not been co-operating as they should have been.”
City, meanwhile, is digging in for its latest fight, and hiring lawyers like Pannick to guide it. Among the charges the club faces are several suggesting it has obstructed the Premier League investigation, accusations mirrored by those alleged in the Uefa case. The club has already gone to court to challenge the league’s jurisdiction to investigate it, and then returned to try to keep details of those hearings quiet. “They have tried to bury them in paper,” said one person familiar with the Premier League case.
The slow pace of the investigation was noted by Stephen Males, one of the High Court judges that heard City’s attempt to keep quiet the details of its challenge to the Premier League’s authority.
“This is an investigation which commenced in December 2018,” Males wrote. “It is surprising, and a matter of legitimate public concern, that so little progress has been made after two and a half – during which, it may be noted, the club has twice been crowned as Premier League champions.”
City would go on to add another title before the Premier League announced its charges – their sixth in just over a decade. By the time the verdict in Manchester City vs the Premier League arrives, they may have added yet more. Whether those will be something to celebrate may not be clear for some time. – This article was originally published in The New York Times
