Manchester City’s financial web: sponsorship “disguised funding” exposed

Manchester City have been found guilty by the Premier League over serious breaches of financial rules, following an independent panel ruling. The document points to how the club used what it calls the Disguised Funding Scheme to hide £830.69m of sponsorship-related money, while other methods concealed £90m in expenses.

The commission says the club’s owners—Abu Dhabi United Group—already understood from the 2009-10 season that there would be major overspending to reach their sporting ambitions. To deal with incoming UEFA and Premier League financial fair play measures, City is described as boosting commercial revenue and reducing reliance on owners.

The ruling explains that sponsorship deals were split into a base fee and a tagged sum, with owners covering the bulk. That, according to the panel, created a misleading impression in financial statements and required FFP returns about how high sponsorship revenues really were. It also says the scheme was tweaked at times “to assist with continued concealment” and “reduce the likelihood of difficult questions being asked”.

One example given is May 2013: with less than a week left in the 2012-13 financial year, City knew it was £9.9m short of UEFA compliance, and modified sponsor agreements were generated within days—without sponsors being approached—to increase recorded sponsorship fees for bonuses and a US tour. City deny the allegations and argue the Premier League misunderstood the sponsorship arrangements, but the panel rejected that defence as untrue.