It would give a whole new meaning to competition between clubs, but could rival clubs act to have Manchester City kicked out of European competition using Uefa’s financial fair play rules? This is the argument made a report in The Independent.
What it shows once again is how complex the financial fair play rules are and how open they are to rival interpretations Manchester City’s place in next season’s Champions’ League could be challenged by rival clubs this summer because of detailed new Uefa rules over Financial Fair Play (FFP).
It would give a whole new meaning to competition between clubs, but could rival clubs act to have Manchester City kicked out of European competition using Uefa’s financial fair play rules? This is the argument made a report in The Independent.
What it shows once again is how complex the financial fair play rules are and how open they are to rival interpretations Manchester City’s place in next season’s Champions’ League could be challenged by rival clubs this summer because of detailed new Uefa rules over Financial Fair Play (FFP).
The news comes as the Chelsea manager, Jose Mourinho, introducing a new dimension to pre-match mind games by cranking up the debate over football finances ahead of tomorrow’s showdown with City by declaring that some clubs are dealing with FFP ‘in a dodgy way’. Although Mourinho did not name City, he was speaking days after they released their 2012-13 financial results last week which showed an annual wage bill of £233 million – £639,000 a day.
City’s confidence that their balance sheet will pass Uefa’s FFP test is openly questioned in some quarters, with sceptics claiming they have used creative accounting to meet the guidelines, though the club categorically deny this.
Now a new problem has emerged in the obscure though highly significant small print of the new FFP rulebook. If City fail to meet FFP, a ‘directly affected party’ has 10 days to appeal against any attempt by the club to then cut a deal with Uefa to reduce their sanction of a likely Champions League ban. City would then be exposed to a Uefa tribunal.
The governing body may deliver their verdict on clubs’ finances as early as May. Arsenal and Liverpool have made it clear they expect strong enforcement of FFP by Uefa and both clubs could make the challenge – putting them in a state of open conflict with City – if either miss out on a Champions’ League place.
However, City’s status in next year’s competition could only be challenged if they are first ruled a FFP defaulter and then reach a ‘settlement agreement’, which is effectively a plea bargain. The existence of such a system has surprised FFP analysts.
The European Commission has a similar procedure which provides incentives for companies to admit to competition-law breaches in exchange for a lower fine. Thus settlement usually results in a reduced penalty as a carrot to settle in the first place. But, in football terms, it would be double edged. While it might allow FFP defaulters to escape a full Champions’ League ban by effectively being put on probation to get their finances in order, it also opens up a legal process by which their rivals could challenge their Champions’ League place.
Daniel Geey, the football law specialist at the firm Field Fisher Waterhouse who, is one of our leading sports lawyers, said: ‘The new procedural rules and in particular Article 15 regarding settlement give the [Club Financial Control] Uefa body the power to settle before an infringement decision is made. This new rule has been implemented only months before the first break-even decisions are taken and it will take some time to understand the instances where settlement may be used.’
If something like this did happen, City would surely resort to the courts to challenge it. There have always been questions about how compatible the financial fair play rules are with EU competition law given that in many ways they create anything but a level playing field.
It would also add a new dimension of ill feeling to relations between clubs and the Premier League might try and hold clubs back given the threat that all this poses to their competition
It is also my sense that City have done just enough to stay within the rules when one considers all the exemptions, although some analysts think there could be just a few million pounds it.
At the end of the day, it comes down to politics as much as law? How far are Uefa prepared to weaken their lucrative Champions League product by expelling a major club? Or would they want to make an example of such a club ‘pour encourager les autres?’ Michael Platini has been notoriously reluctant to go after big spenders Paris Saint-Germain, who have arguably used creative accounting, but he might like a big English club in his sights.