City succeed in Uefa ban appeal

LONDON • Manchester City's two-year suspension from European football was yesterday overturned by the Court of Arbitration for Sport (CAS), allowing the club to compete in the Champions League next season for the 10th year running.

CAS ruled that City did not breach Uefa Financial Fair Play (FFP) rules by disguising equity funding as sponsorship.

Sport's highest court also reduced the fine for failing to cooperate with European football's governing body to €10 million (S$15.8 million) from an initial €30 million.

"Most of the alleged breaches reported by the (Uefa) Adjudicatory Chamber of the CFCB (Club Financial Control Body) were either not established or time-barred," CAS said in a statement.

Uefa had ruled in February that City had committed serious FFP breaches between 2012 and 2016 and failed to cooperate with its investigation, leading to the English Premier League club lodging an appeal with CAS.

The regulations are designed to stop clubs running up big losses through spending on players.

They also ensure sponsorship deals are based on their real market value and are genuine commercial agreements - and not ways for owners to pump cash into a club to get around the rules.

CAS, however, disagreed with the findings, pointing out that Uefa's own rules place a five-year statute of limitations on prosecutions. It added that a full legal ruling, with details of the case and the decision, would be published in the coming days.

"While Manchester City and its legal advisers are yet to review the full ruling by the 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.

In response to CAS' ruling, Uefa insisted it was still committed to FFP.

Charged for failing to maintain a balance between revenue and expenditure, with a deficit exceeding the €30 million (S$47.3 million) maximum, City accepted a conditional fine of €60 million, of which €40 million would be lifted if the club met other conditions including transfer restrictions and a reduced squad in Europe for two seasons.

A "Football Leaks" expose revealed City had used overpriced sponsorship and backdoor contracts to conceal subsidies amounting to €127.5 million from owner Sheikh Mansour, deputy prime minister of the United Arab Emirates, to sidestep Financial Fair Play (FFP) laws.

Uefa opened an investigation into "potential violations of the rules of FFP". The possible punishments ranged from a reprimand to a ban from European competitions.

On Valentine's Day, Uefa's Adjudicatory Chamber banned City from European competitions for the next two seasons for "serious FFP breaches" in its accounts from 2012-2016.

The English champions, who were also fined €30 million, immediately launched an appeal to the Court of Arbitration for Sport, which overturned Uefa's ruling yesterday.

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"Over the last few years, FFP has played a significant role in protecting clubs and helping them become financially sustainable and Uefa and ECA (European Club Association) remain committed to its principles."

However, the fact that such a high-profile case ended in failure is an embarrassment for Uefa and will likely lead to changes to the FFP system.

"It's obviously a blow to Uefa," said John Shea, senior associate at law firm Lewis Silkin. "I would expect Uefa to implement some changes in light of the decision in order to strengthen the regulations and ensure that clubs won't have this form of appeal in the future."

That could mean clubs may no longer be able to go down the same route, with La Liga president and long-time critic of City, Javier Tebas, saying: "We have to reassess whether the CAS is the appropriate body to which to appeal institutional decisions in football.

"Switzerland is a country with a great history of arbitration, (but) the CAS is not up to standard."

Missing out on the Champions League would have cost Pep Guardiola's side, who have denied any wrongdoing, as much as £100 million (S$175 million) in prize money and broadcast revenue, as well as match-day and other revenues.

Uefa's ruling also called into question the future of the team's biggest stars like Kevin de Bruyne, who publicly stated leaving the Etihad was a real possibility if the ban was upheld.

However, City, who have earned second place in the Premier League this season, can now put those worries aside to their delight.

A quickly deleted photo on Instagram that was put up by a member of Guardiola's backroom staff, Manel Estiarte, showed the City manager, director of football Txiki Begiristain and other key figures at the club, beaming in front of a TV news report.

This also means that fifth place in the English top flight will no longer be enough to clinch a Champions League berth, with either Chelsea, Manchester United or Leicester missing out by season end.

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