Manchester City have been found guilty of all charges of serious breaches of the Premier League’s financial rules between the 2009/10 and 2017/18 seasons, the league has said in a statement.
City were charged in February 2023 with breaches of the league’s financial rules spanning nine seasons following a four-year investigation.
The club said in a statement it would appeal.
An independent commission found that City “arranged ‘sham’ contracts (which misrepresented the true agreement between the parties) with a number of its commercial partners”, the league said on Tuesday.
The league added that the commission had found City used schemes “to artificially inflate the club’s revenues, and reduce its costs, by more than 900 million pounds [$1.2bn] during the affected period, to appear to comply with financial rules”.
“The core decision … details how the club systematically broke Premier League Rules for nearly a decade,” said Richard Masters, the chief executive of the Premier League.
“There are elements of the case that remain to be decided, including, importantly, what sanction must follow for these breaches.”
City, who deny any wrongdoing, said they were “disappointed and surprised” by the commission’s opinion.
“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 said.
“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.”
‘It’s incredibly serious’
The commission found City arranged commercial deals whereby companies were only required to pay a portion of the relevant sponsorship fees.
The remainder was funded by Abu Dhabi United Group Investment and Development (ADUG), which owned the club.
Further arrangements, funded by ADUG, enabled the club to record lower operating expenses than they actually incurred.
The commission found they would have breached spending limits “by a very substantial amount” if City had reported accurately.
In addition, the club were found to have “made concerted efforts to stop and frustrate the Premier League” during the investigation.
“It’s incredibly serious, the Premier League report is incredibly stark,” said the British government’s culture, media and sport secretary Lisa Nandy.
Since a 2008 takeover from Sheikh Mansour bin Zayed al-Nahyan, vice-president and deputy prime minister of the United Arab Emirates, City have become the Premier League’s dominant force.
They have won eight Premier League titles, four FA Cups and seven League Cups over the past 15 years and also won the Champions League for the first time in 2023.
But that same year they were charged by the Premier League on more than 100 charges following an investigation into alleged breaches of rules.
According to Premier League rules, the sanction can vary from a points deduction, a fine or even expulsion from the division.
Everton and Nottingham Forest were handed points deductions in the 2023/24 season for single breaches of financial sustainability rules.
On that basis, City would face likely relegation if the same penalty is applied for over 100 charges.
David Bernstein, who served as City chairman from 1998 to 2003, said the club should be expelled from the Premier League after the guilty verdict.
“It is damning beyond belief. My immediate thoughts are, should the board continue? Should the people involved be suspended immediately?” Bernstein told the BBC.
“Very, very serious. I think it’s really terrible. There’s a school of thought with lawyers that is deny, deny, deny, but this is a football club that is part of a league and the whole credibility of the league is at stake here.
“The sanctions cannot just be financial, so it’s got to be way beyond that. If the appeal fails, Manchester City cannot stay in the league, they have to suffer. And I say that as a supporter and a fan.”