What happened?
Both Paris Saint-Germain and Manchester City have been punished for violating UEFA’s Financial Fair Play break even rules. Martyn Ziegler:
Manchester City are facing UEFA sanctions for breaching financial fair play rules which would see the club limited to a 21-man Champions League squad instead of the usual 25 players next season, it can be disclosed.
City, who are still strongly challenging the settlement offer from UEFA, are also facing a fine in the region of €60million (£49million) over three years, and a cap imposed for next season to ensure there is no rise on this season's Champions League A squad wage bill.
The reduction in the size of the Champions League squad to 21 would potentially hit the club hardest, and City would also have to ensure that there are still eight locally-trained players in that A squad.
Ziegler goes on to explain PSG will be receiving a similar punishment. City are apparently the club furthest away from settling with UEFA over the terms, and if they fail to settle by the end of this week then the ruling would go back to UEFA who could mete out a “non-negotiable” punishment, even worse than the one above.
What does it mean for next season?
The fine is the biggest in football history, apparently, though many believe Manchester City’s owners will absorb the blow. The much more daunting challenge involves the “locally trained players” rule and the reduced Champions League squad, which could drastically affect Man City’s European campaign. It’s not clear whether they could meet the provision right now, though we will likely get more insight on this in the coming days and weeks.
What does it mean in the long term?
For one, that this is the first instance of a Premier League club violating FFP provisions (more on that below) and facing serious consequences. It could spark a debate about whether the integrity of next season’s competition has been violated with UEFA putting these strictures on both PSG and City.
It will also renew the long-running debate over the value and utility of FFP. I’ve long maintained the rules are about slowing player inflation across Europe, though it’s not always clear if UEFA is more interesting in soaking the rich, as it were.
It will also provoke a journalistic look into other sponsorship deals, including Chelsea’s Gazprom deal and the, um, interesting loans sometimes afforded to the Big Two in Spain.
Why were City and PSG punished?
It’s alleged their respective sponsorship deals—in the case of City their £400 million/ten year deal with Etihad—fell foul with UEFA’s determination of ‘fair value’ for sponsorship deals, meaning the European football governing body believes both teams negotiated sponsorship terms well above “market rate.”
The decision was reached by the Club Financial Control Body (CFCB). Some details:
The CFCB is underpinned by an Investigatory Chamber, led by the CFCB chief investigator for the monitoring and investigation stage of the proceedings, and an Adjudicatory Chamber for the judgement stage of the proceedings led by the CFCB chairman.
In June 2012, UEFA's Executive Committee approved and made official the appointment of the members of the CFCB for a term of office ending on 30 June 2016.
The CFCB is chaired by José Narciso da Cunha Rodrigues. A former general prosecutor of the Portuguese Republic, Mr Cunha Rodrigues was a judge at the Court of Justice of the European Union (CJEU) from 2000, and he took office as of 8 October 2012, when he left the CJEU.
What don’t we know at this stage?
We don’t know the specific rationale for the CFCB’s ruling on the respective sponsorship deals (and may never know). We don’t know what UEFA plans to do with the fine money (and UEFA themselves don’t know). We don’t know what legal options City are considering should they fail to settle with UEFA, including taking a case to the Court of Arbitration for Sport.