An independent commission found the club artificially inflated revenues and reduced costs by more than £900 million through "sham" commercial agreements and "concealed the true state of its finances". This was to "appear to comply with financial rules".
City were also found guilty of three of the four alleged breaches of their duties to co-operate with the Premier League's investigation, with the statement saying the club "made concerted efforts to stop and frustrate the PL investigation".
Premier League CEO Richard Masters said the independent commission’s findings detail how "the club systematically broke Premier League rules for nearly a decade."
City swiftly responded with their own statement, saying they were "innocent of the accusations". They now face a separate sanction hearing and have until Friday to appeal.
"A comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case," said City.
"The club will therefore be relentless, and where necessary proactive, in any and all appropriate regulatory and legal forums."
Premier League statement in full
An independent Commission has found Manchester City FC guilty of all charges related to serious breaches of the Premier League’s financial rules over a nine-season period, and the majority of charges in relation to its failure to co-operate with the League’s investigation.
The independent Commission found that between seasons 2009/10 and 2017/18:
Manchester City arranged ‘sham’ contracts (which misrepresented the true agreement between the parties) with a number of its commercial partners, as well as relying on ‘sham’ agreements with others, to artificially inflate the club’s revenues and reduce its costs
The club filed misstated accounts and concealed the true state of its finances from its auditors and football regulators
Manchester City was significantly in breach of both the Premier League’s and UEFA’s spending limits
During the Premier League’s investigation, Manchester City committed multiple breaches of its duties of co-operation and utmost good faith towards the League (three of the four alleged breaches were upheld)
The independent commission found that Manchester City arranged ‘sham’ commercial deals with a number of its sponsors during the period, which were part of a disguised funding scheme, whereby those companies were only required to pay a portion of the relevant sponsorship fees. The remainder was funded by Abu Dhabi United Group Investment & Development Ltd (ADUG), which owned the club. As part of the scheme, further ‘sham’ arrangements, funded by ADUG, were entered into to enable the club to record lower operating expenses than it actually incurred, as well as a ‘sham’ circular arrangement with Fordham, an entity that purchased the club’s players’ image rights, that was funded by ADUG.
The purpose of these schemes was found to have been to artificially inflate the club’s revenues, and reduce its costs, by more than £900 million during the affected period, to appear to comply with financial rules. The consequence of this, as the commission found, was that the club filed misstated accounts and concealed the true state of its finances from its auditors and football regulators. The Commission concluded that "by its conduct the club clearly intended to circumvent the PL rules".
As a result, Manchester City failed to accurately report its income and expenditure for the purposes of the Premier League’s profitability and sustainability rules (PSR) and UEFA’s club licensing and financial fair play (FFP) rules. The commission found that, had all of the relevant agreements been reported accurately in the club’s accounts, it would have been in breach of both the League’s and UEFA’s spending limits by a very substantial amount.
In addition, during the course of the four-year investigation conducted by the Premier League, the club committed multiple breaches of its duties of co-operation and utmost good faith towards the League. The Commission concluded that the club had "made concerted efforts to stop and frustrate the PL investigation".
Richard Masters, Chief Executive of the Premier League, said: ”The core decision establishes the facts of what happened at Manchester City during this period. It details how the club systematically broke Premier League Rules for nearly a decade.
”It also vindicates the Premier League’s decision to pursue this case against Manchester City. While the process to date has been both long and difficult, the League has remained determined that the facts be established independently.
”It is a key responsibility of the Premier League to ensure that the Rules, approved by the clubs themselves, are upheld to protect the integrity of the competition. It is paramount that the League remains competitive and fair for all clubs and for the fans. We take that role extremely seriously.
”This disciplinary case, and this decision, are the most significant in Premier League history. There are elements of the case that remain to be decided, including, importantly, what sanction must follow for these breaches. Now we have the Commission’s decision, we are committed to moving swiftly through the remainder of the process, to provide certainty for the League, our clubs and fans.”
The independent commission’s findings are set out in a Core Decision, of which a redacted version has been published (click here). The commission’s award comprises both the core decision and a large number of additional appendices, which the League is committed to publishing as soon as it is able.
The League is able to publish the Core Decision because the Commission has ruled (and an Appeal Board has confirmed) that the Commission’s decision is a ‘final award’.
Now that the charges have been proved, the issue of sanction will be addressed separately in a further hearing with the independent Commission. In accordance with Premier League rules, that hearing will remain private and confidential until such a time as publication of the outcome is permitted.
The club has the right to appeal the independent Commission’s findings and has until Friday 2 October to exercise that right.
The Premier League Board’s intention is that the full process (including any appeals and publication of relevant decisions) is concluded as soon as possible.
Manchester City statement in full
Manchester City FC is both disappointed and surprised by the opinion of the Premier League Commission, that has been published today.
The Club is innocent of the accusations made by the Premier League and a comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case. The Club will therefore be relentless, and where necessary proactive, in any and all appropriate regulatory and legal forums.
The Premier League process remains ongoing, with significant elements uncompleted. Manchester City FC will now pursue the appeal avenues open to it, on the basis that the opinion contains clear material errors, of law, principle and fact, and is unsafe.
The Club has diligently respected due process for eight years on the basis that the Premier League Board and Executive would behave as an independent, impartial and fair-minded regulator, free from partisan influence.
The Club is obviously restricted in what it can say further until all future proceedings are complete.
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