Man City guilty of 'sham' contracts and £830m 'disguised funding scheme'

Manchester City arranged 'sham contracts' with commercial partners, part of a scheme to disguise over £830m in secret funding. The Premier League confirmed City violated financial rules across the 2009-10 to 2017-18 seasons.

An independent commission determined the club used these 'sham contracts' and agreements to artificially boost revenues and lower costs. City denies wrongdoing, with an appeal deadline set for October 2nd.

Reports last week indicated City's guilt on most of the 115 financial charges. A redacted commission report, published Tuesday, details charges covering "well over 100 alleged individual breaches" across four categories.

The commission found the club guilty on all but one charge, related to non-cooperation with the investigation. Some key club witnesses, it noted, gave false or dishonest evidence.

The alleged 'sham' commercial deals formed part of an £830.69m 'disguised funding scheme'. In the three seasons City won the Premier League (2011-12, 2013-14, 2017-18), they recorded £360m in sponsor fees. Only £43m was legitimate; the remainder came from owners, disguised as sponsorship.

'The relevant sponsorship agreements were found to be shams, or at minimum did not reflect their economic substance,' the commission stated. It also noted 'deliberate or reckless conduct intended to circumvent the Premier League rules'. The 'sham' scheme allowed the club to avoid recording what would have been the largest single-season loss in Premier League history in 2009-10.

The scale of evidence was highlighted by a 750-page index and tens of thousands of pages in the core document bundle. City is owned by the Abu Dhabi United Group (ADUG).

Premier League chief executive Richard Masters stated the commission's decision establishes the facts of the club's systematic rule-breaking over nearly a decade, vindicating the league's decision to pursue the case. He emphasized the league's responsibility to uphold rules to protect competition integrity.

City's sanction will be decided in a separate hearing. Premier League rules require this hearing to remain private.

Culture, Media & Sport secretary Lisa Nandy called the report "incredibly stark" and a cause for "concern for Man City fans and all fans of Premier League football."

Former City chairman David Bernstein said the league's credibility is at stake. He described the situation as "damning beyond belief," citing false documentation and years of behavior. Bernstein suggested sanctions must go beyond financial penalties, as money may mean little to the owners. He believes City cannot remain in the Premier League if the accusations are proven, advocating for a penalty that removes them from the competition.

In their statement, Manchester City expressed "disappointment and surprise" at the commission's findings, declaring their innocence. They stated they possess "comprehensive body of irrefutable evidence" and will be "relentless...in any and all appropriate regulatory and legal forums." The club views the opinion as containing "clear material errors, of law, principle and fact, and is unsafe" and will pursue appeal avenues.

The club also noted their diligence in respecting due process for eight years, expecting the Premier League to act as an "independent, impartial and fair-minded regulator." Further comments are restricted pending completion of proceedings.

CEO Ferran Soriano, while declining direct comment, reportedly called it a "Premier League conspiracy theory" in a video message to staff, insisting the club would be "vindicated."