Manchester City Football Club have had their two-year ban from UEFA club competitions overturned by the Court of Arbitration for Sport [Cas].
Cas judged that the club was not guilty of “disguising equity funds as sponsorship contributions”, following UEFA’s ruling that the club was responsible for “serious breaches” of Financial Fair Play [FFP] rules over the period spanning 2012 to 2016.
The initial UEFA ruling back in February saw City handed a two-year ban from European club competition and a fine of €30 million.
Cas said when giving its verdict that City “failed to cooperate with UEFA authorities” but did not align itself with the decision made by the UEFA club financial control body [CFCB] to issue a ban.
The ban has therefore been overturned and the fine reduced to €10 million.
In a statement, Cas said: "The award emphasised that most of the alleged breaches reported by the adjudicatory chamber of the CFCB were either not established or time-barred.
"As the charges with respect to any dishonest concealment of equity funding were clearly more significant violations than obstructing the CFCB's investigations, it was not appropriate to impose a ban on participating in UEFA's club competitions for Manchester City's failure to co-operate with the CFCB's investigations alone."
City said in its own club statement that the Cas decision was “validation of the club's position and the body of evidence that it was able to present”.
The statement continued: “The club wishes to thank the panel members for their diligence and the due process that they administered.”
The ruling means that City are now clear to play in next season’s edition of the UEFA Champions League, having secured a second-place finish in the 2019-20 Premier League.
Justifying its decision to reduce the fine issued to City, Cas said that it “considered it appropriate to reduce Uefa's initial fine by two-thirds”, having taken into account the “importance of the co-operation of clubs in investigations conducted by the CFCB” and the club’s “disregard of such principle” and “obstruction of the investigations”.
Cas continued: "The final award with reasons will be published on the Cas website in a few days."
UEFA acknowledged the Cas decision, saying: "Over the last few years, Financial Fair Play has played a significant role in protecting clubs and helping them become financially sustainable and UEFA and the European Club Association remain committed to its principles."
The initial decision to issue a fine and a ban to City came about after German newspaper Der Spiegel released leaked documents in November 2018 which alleged that the club had inflated the value of a sponsorship deal.
City have always denied any wrongdoing, but reports alleged that the club had intentionally sought to misled UEFA in order to ensure compliance on paper with Financial Fair Play rules.
The CFCB said in a statement on February 14, 2020, that City was guilty of breaking FFP rules by “overstating its sponsorship revenue in its accounts and in the break-even information submitted to UEFA between 2012 and 2016” and adding that the club had “failed to cooperate” in the investigation into its dealings.
It was not the first time City had fallen foul of regulations, having been fined £49 million in 2014 for a previous offence.
The club was also unsuccessful in attempting to have Cas put UEFA’s investigation on hold during November 2019. When UEFA’s verdict of the ban and fine was issued in February, City said in a statement that the investigation process was “flawed” and “prejudicial” and confirmed it would lodge an appeal.
City also claimed that they had been subject to illegal hacking from individuals intent on harming the club’s reputation and that emails were being taken out of context and used as the basis for reports smearing the club.
City also alleged that UEFA’s CFCB was not acting independently, adding that the club’s trust in the body was eroded because of the sheer amount of information being handed over to the media.
Despite Cas’ verdict, UEFA could still lodge its own appeal in Switzerland’s federal courts, but it is unlikely to be heard before the start of the 2020-21 Champions League.
Meanwhile, an investigation into City by the Premier League which first began in March 2019 is still ongoing, concerning finances, recruitment for the club’s academy and third-party ownership.
