The club had been accused of deliberately inflating the value of income from sponsors with links to the Abu Dhabi United Group, also owned by City owner Sheikh Mansour, to avoid falling foul of financial fair play (FFP) regulations between 2012 and 2016.
The alleged offences were not flagged by UEFA until 2018, meaning they were unable to investigate before the five-year statutory limitation expired and the decision was overturned: “Most of the alleged breaches reported... were either not established or time-barred,” said CAS.
City were instead handed a €10 million fine (B357mn), reduced from the initial €30mn.
The decision is a huge lift for the club who can now focus on securing the one piece of silverware they most covet and that has thus far eluded them during the decade long-reign of Sheikh Mansour.
They resume Champions League action against Real Madrid on August 8th with a 2-1 lead safe in the knowledge that they will be participating in Europe’s top club competition again next season.
The ruling also puts an end to speculation that manager Pep Guardiola and star players such as Kevin De Bruyne and Raheem Sterling could possibly leave the club and ensures they will continue to be able to attract top talent to their already impressive playing squad.
“Whilst Manchester City and its legal advisors are yet to review the full ruling by the Court of Arbitration for Sport (CAS), the club welcomes the implications of today’s ruling as a validation of the club’s position and the body of evidence that it was able to present,” City said in a statement.
“The club wishes to thank the panel members for their diligence and the due process that they administered.”
The decision also has ramifications for the conclusion of the Premier League season.
Currently, just six points separate third from seventh and many teams were hoping that City’s ban would be upheld, meaning fifth place would have been sufficient for Champions League qualification next season.
Now, however, Chelsea, Leicester, Manchester United, Wolves and Sheffield United are fighting it out for two places in the top four.
The future for FFP & UEFA
The broader implications of the ruling for UEFA and FFP are less clear with initial criticism claiming the ruling undermines the legitimacy and moral authority UEFA have in being able to enforce FFP regulations, raising serious questions as to the credibility and effectiveness of the law.
FFP was put in place to control the richest participants at European football’s table by restricting unsustainable debt. It was essential, said advocates, to prevent the sport from becoming top heavy and overly dominated by fabulously wealthy Russian oligarchs, US private equity firms and Middle Eastern petro-dollars while at the same time protecting clubs from reaching beyond their means.
However, the many clubs across the continent who have been forced to comply with the law by selling prized assets will no doubt be smarting by the decision. A.S. Roma, for example, admitted they sold Mohammad Salah to Liverpool for a much-reduced fee in order to adhere to the regulations by a stipulated date.
Other clubs have fallen foul of FFP directives yet gone unpunished. In 2017 France’s Paris Saint-Germain spent €405mn (B15 billion) on Neymar and Kylian Mbappe within weeks of one another and have been condemned as completely skewing their domestic league with their financial clout.
The breach of FFP was flagged by UEFA last year only for CAS to overturn the decision in a strikingly similar manner to City’s this week.
Both are extremely wealthy clubs with deep pockets who can swat away paltry fines. The punishment needs to be much harder otherwise the entire system is worthless.
It is too premature to suggest FFP could be scrapped altogether. Supporters of the rule point to the fact that over the past two seasons European club football has turned a profit as opposed to previously losing €1.8bn a year.
Some reform, however, seems inevitable. UEFA’s authority and its very competence has been undermined, as have its own notions of centralised control on the game. Cynics will argue the ruling hints at a European breakaway league driven by the wealthy top tier clubs edging ever closer, free of any central governing body.
One thing for certain is Manchester City will have a seat at the very head of that table and continue to chart the course for European football for many seasons to come, fair play or not.