Manchester City have been found guilty of systematically deceiving the Premier League to hide hundreds of millions of pounds in sponsorship funding, according to a ruling published on Tuesday. The independent commission found the club guilty of all charges related to serious breaches of financial rules, and all but one in relation to a failure to co-operate with the investigation. The ruling uses the word “sham” eight times.
The case centres on a scheme that disguised sponsorship payments as legitimate income. The Disguised Funding Scheme hid more than £830m of sponsorship funding over nine seasons, and other devices hid £90m in expenses. Together, the losses for the 2009-10 campaign exceeded Chelsea FC’s 2006 record single-season financial loss of £140m.
How The Scheme Worked
City entered into sponsorship agreements in early 2010 which were record amounts and significantly above fair market value. The deals worked like this: the sponsorship fee was split into a base fee and a tagged sum. The club’s owners paid the tagged sum, and the arrangement was designed to look like ordinary sponsorship revenue while hiding the true extent of the funding.
Commercial income from sponsors totalled £949.94m from 2009-10 to 2017-18. Of that, only £119.25m represented base fees and £830.69m represented tagged sums. The difference is the scale of the deception: nearly nine-tenths of the reported sponsorship income came from the tagged portion, which was paid by the owners rather than earned from the sponsors themselves.
In May 2013, a shortfall of £9.9m was plugged by generating modified sponsor agreements. These increased recorded sponsorship fees to pay bonuses for events that had already taken place and to pay for a US tour. The ruling treats this as further evidence of the scheme’s operation, not a one-off adjustment.
Longbow And The Arrangement
Project Longbow was launched in 2012. The ruling describes the Fordham Arrangement, a separate device used alongside it, as “little more than a front” and involving inflating the price of player image rights. The arrangement was “operated with the knowledge and approval” of individuals whose names were redacted from the ruling.
The ruling says the Fordham Arrangement wrongly recorded £24.5m as operating income and £49.414m was wrongly excluded from operating expenses. Those figures show the scale of the misreporting: nearly £74m of expenditure was hidden from the accounts through this single mechanism.
Man City have denied the claims and say the Premier League had misunderstood the sponsorship agreements. The panel rejected that explanation as untrue, saying it was “concocted well after the event in an attempt to obscure and conceal the realities of the disguised funding scheme”.
What The Ruling Found
The ruling’s repeated use of the word “sham” signals the severity of the findings. The panel concluded that the club’s financial reporting was deliberately constructed to present a picture of profitability that did not exist. The scheme operated for years, spanning multiple seasons and multiple mechanisms.
| Mechanism | Amount Involved |
|---|---|
| Disguised Funding Scheme (sponsorship) | Over £830m over nine seasons |
| Other devices (expenses) | £90m |
| Chelsea’s 2006 loss | £140m |
| May 2013 shortfall plug | £9.9m |
| Fordham Arrangement operating income | £24.5m |
| Fordham Arrangement excluded expenses | £49.414m |
The Meaning Of The Ruling
The ruling is significant because it confirms that City’s reported finances were systematically distorted for years. The £830m figure represents the core finding: sponsorship income that was presented as revenue was in fact funding from the club’s owners, dressed up to meet regulatory requirements.
The £90m in hidden expenses adds to the picture. Taken together, the scheme meant that City’s reported losses in 2009-10 were far larger than previously disclosed, and the ruling treats the £140m Chelsea record as a useful comparison point for the scale of the distortion.
The May 2013 plug also matters. By increasing recorded sponsorship fees to cover bonuses for past events and a US tour, the club adjusted its reported income to plug the shortfall. The ruling sees this as part of the scheme’s operation, not a correction.
The ruling also finds that the club’s explanation of the arrangements was untrue. The panel said the explanation was “concocted well after the event in an attempt to obscure and conceal the realities of the disguised funding scheme”. That conclusion carries real weight: it suggests the club knew the truth of the arrangements and tried to cover it up rather than explain honestly.
The Path Forward
The ruling is the result of a long-running investigation into the club’s finances. The findings will now be considered by the relevant authorities, who will determine what consequences follow. The club’s response to the ruling has been to deny the claims and challenge the findings, but the panel’s rejection of the club’s explanation leaves little room for manoeuvre.
The decision highlights the difficulty of enforcing financial fair play rules when clubs can find ways to disguise funding as legitimate revenue. The ruling suggests the Premier League’s financial fair play rules were being tested, and the club’s approach involved deception rather than compliance.
The ruling is a reminder that sport is not exempt from the rules that govern business elsewhere. Financial transparency is essential for trust, and when a club is found to have concealed hundreds of millions of pounds of losses, the damage runs deep. The authorities will need to act on the findings, and the consequences will determine whether the system can enforce the rules it sets.
Where the paper stands
The paper backs Manchester City’s right to appeal the ruling and is against the league’s attempt to punish the club for a scheme that regulators themselves took years to investigate. The paper supports the club’s right to challenge the findings and opposes any punishment until that appeal is settled.
The paper opposes regulation that protects the biggest players and raises the cost of entry for small ones, and the league’s punishment would be a form of that regulation — a rulebook that punishes a club for conduct regulators spent years investigating. The paper wants oversight aimed at specific harm, not a broad new rulebook punishing a club for a scheme regulators themselves investigated.
Readers should watch for the league’s response to the appeal, and whether the punishment moves forward before the club has its day in court.
Source material: “The intricate web Man City spun to con the Premier League,” the BBC.
Get the Notebook.
The day's best stories and every fresh verdict, in plain English, in your inbox by seven. One email a day, no more.