Manchester City’s investigation will be the Premier League’s inflection point
Pandora’s box
The Premier League this week charged Manchester City with breaching over 100 financial rules. While FFP related penalties are not completely unheard of these days, this has created shockwaves.
The investigation raises some wider questions. If the charges materialize, and lead to some type of sanction, that would raise even more questions. Either way, it will signal an inflection point for the Premier League.
Retrospective investigations
Any breach of regulations should elicit an investigation. No question. The nature and timing of this investigation, however does raise some.
As per BBC and Sky Sport, City claim to be “surprised” by these charges. It’s not fully clear if they are surprised by the charges, or by the investigation. Either way, if any part of such a large investigation comes as a “surprise” for the accused, that’s not a transparent start.
The charges are retrospective — relating to 2009 to 2018. Incidentally, this timeframe overlaps with the FFP charges UEFA laid on City from 2012–2016, which resulted in a 2-year ban, that was later overturned by CAS.
There are over 100 charges. The latest breach is already 4 years old, while the oldest one will go back 14 years! Some of these have already been litigated. It’ll make for a complicated investigation.
Inflection Point
An inflection point is an event that results in dramatic change. This investigation could become one for the Premier League.
To understand we need to look at some history.
In the 00s, Chelsea pioneered the financial turbo-charging model. Abramovich's takeover, turned Chelsea’s fortunes and brought trophies almost immediately. Close on the heels of Chelsea’s success, Abu Dhabi also entered this “game” (pun intended) by buying Manchester City. Their fortunes would soon transform as well. The arrival of City however did one other thing — expanded the Big Four into the Big Five. The Premier League is founded on the ethos of being competitive. City’s arrival created competition. The Agueroo moment in 2012, leading to City’s first title, catalyzed the rise of the Premier League into the world’s best and richest.
The “golden goose” is now being charged with financial breaches.
For sure, the law has to be equal for everyone. The implications of applying the law however can be quite different.
If charges materialize?
An investigation can only have two outcomes — either charges are proven or not. If they are not proven, then that will be major egg-on-face for Premier League. However, with over 100 breaches, one senses that some charges at the very least will be proven.
What are the sanctions? As per the BBC:
“The potential tariffs are limitless…It could be anything from ‘don’t do it again’, to a fine, to a points deduction, to stripping Man City of titles, to even expelling them from the Premier League.”
A warning will be like a draw between two relegation sides on equal points — not bad but does no one any good either.
A points deduction will be interesting.
- If the verdict is out before the end of the season, a points deduction will end City’s UCL slot dreams. They could of course win the UCL this season and qualify automatically.
- If it’s applied next season, even at 15 points, City have the calibre to make it up. This is assuming that Pep Guardiola stays and does not quit in the wake of these allegations. If he quits, then that’s another domino effect across the squad, team and the league also.
If they are stripped of the titles, this will be a first for the Premier League, and English top flight football. What will be impact on the club, the players, their world class coach, and the motivation of the owners?
Being expelled from the Premier League, will hit like a 9-Richter scale quake — for everyone.
The Full Monty
The implications should also be considered in the wider context. The Big 6, two years ago, signed up for the European Super League. Amidst wide-spread public pressure and threat of sanction, they withdrew. Its strongest proponents — Real, Barcelona and Juventus, lost court case, but still openly talk about it. Real won the UCL after that ruling and still talks about ESL!
The ESL is one factor. The second one is the changes in ownership. Liverpool and Manchester United are reportedly put up for sale. While the reasons may differ, a common uniting ground for the sale will surely be the unsustainable spending on transfers and wages. No business can afford to spend ever growing amounts year after year for (theoretically) uncertain revenues. Fatigue will set in, especially if like most American owners, the clubs are LBOs (leveraged buy outs).
The On-Sale sign and ESL. Like vultures they are sitting poised.
While we cannot predict the threshold for City to take drastic action, surely if they are relegated, that will rekindle their interest in the ESL. If they do that, 2–3 of the Big 6 would also follow, particularly those who have put up their clubs on sale. This will leave the Premier League in tatters.
“He that is without sin among you, let him first cast a stone” — Bible
Ethics?
Politics
There is also a (potential) political angle to this investigation. The timing coincides with the white paper on football governance, which is due soon. Is the Premier League doing this to show that it can deal with governance issues, and thus avoid an independent regulator being placed on top?
A wider influence could be geo-politics. As Gulf-based owners eye Liverpool and Manchester United, could this be a ploy to deter them, under pressure from political groups. As Gulf-countries pursue independent foreign policies from NATO, could this be a “soft” warning shot?
Football is so big now that nothing can be ruled out.
Ethics
Legally, an investigation is warranted. Having said that, while the Premier League has a clean record, football federations, FIFA in particular, is not without corruption, greed and bribery (Qatar World Cup) scandals. In that context, FFP investigation, at whatever level, feels more like one type of wrong-doer pursuing another type of wrong-doer.
FFP is complex and itself not without criticism. Whether by design or not, beneath the pretext of fairness and stability, these laws mostly serve to insulate the established elite cartel from competition from upstarts.
If FFP really is about financial sustainability, LBO-type arrangements must surely be scrutinized. There are owners who asset-strip clubs, load them with debt, and don’t invest in facilities. Then there are owners, like City, who operate clubs from secure sovereign funds and invest massively in players and facilities.
Creative accounting raised it head again this season, when Chelsea spent over $600m on 17 players. They side-stepped FFP by using long-term contracts, to amortize the money. This maybe legal, but is it ethical? Is it in the “spirit” of FFP? No.
The loan system is a similar area. Loans were meant for youth players to gain experience — not a 29-year-old, $100m Lukaku to be sent Inter, again by Chelsea. Is the system not being gamed here?
Is Financial Fair Play truly fair? Does it really address the root causes of financial sustainability? Is it a mature regulation that has been consistent over the years?
What should FFP really target? More holistically, instead of applying retrospective laws, is it not better to sanction unethical practices as they happen?
Lots of questions — the answer to neither is a firm yes.
As Manchester City’s charges are worked through, such questions will arise; and fingers will be pointed at other clubs’ dealings also.
Investigations need to happen when required. They cannot be shied away from due to the fear of implications.
This investigation will rock the Premier League. It may up-end the world of football as well. More pertinently, it will ask as many questions of the regulations, than of the regulated.
