Manchester City found guilty of overstating sponsorship income by £830.69 million

An independent commission has found Manchester City guilty of serious breaches of Premier League financial rules spanning from the 2009-10 to 2017-18 seasons. The 40-page report detailed that City was guilty on all significant financial charges, although one charge related to non-cooperation was not proven. The commission's findings indicate that the club engaged in practices that undermined the integrity of financial reporting in the league.

The report highlighted a 'disguised funding scheme' where Abu Dhabi United Group (ADUG) partially funded sponsorship fees through agreements deemed to be 'shams'. This scheme allowed the club to avoid breaking the record for the largest single-season loss in Premier League history by manipulating financial statements at the end of the 2009/10 financial year.

Manchester City overstated their sponsorship income by £830.69 million, with the commission stating that the agreements were significantly above fair market value. The financial statements for the club during the specified seasons did not accurately reflect their financial position, concealing the true nature of their finances from auditors and regulators.

The commission also uncovered 'The Fordham Arrangement', which was described as a front for ADUG. This arrangement allowed City to overstate income by £24.5 million and understate expenses by £49.414 million. The report indicated that this was part of a broader initiative, 'Project Longbow', aimed at boosting revenues and reducing operating losses, though one aspect was found to be fraudulent.

The investigation involved testimonies from 27 witnesses over 42 days, revealing attempts by the club to obstruct the inquiry. The commission determined that some witnesses provided false evidence, and the club's actions demonstrated an intention to circumvent Premier League rules. Manchester City has announced plans to appeal the ruling, with a deadline set for October 2.

via Sky Sports