Man City Q&A with Kieran Maguire & Dale Johnson

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0:42Three straight days with pool deck bare knuckle fights in the Caribbean. Massive parties, beach events, DJs, cigars, tequila tastings, and nonstop action. The light-up reveal's coming soon. Cabins are disappearing fast, and the prices won't stay this low. Reserve your spot with just$200 down at bkfsea.com. This is the Football Daily Podcast with Kelly Summers. Football finance expert and host of the Price of Football podcast, Kieran Maguire, is with us, as is BBC Sports Issues correspondent, Dale Johnson. There's just so much to get into, but Dale, before we go any further, we had that explosive statement from the Premier League.

1:26We then had a statement from Manchester City for listeners who perhaps haven't been filled in on what's been going on. Just give us the lowdown. Yeah, so it was a pretty crazy few hours, really, where we weren't really expecting to get this full judgment quite yet. But it has finally dropped. And basically it says that Manchester City arranged sham contracts, which misrepresented the true agreement and artificially inflated the club's revenues. And it did this by basically taking what are essentially pretty small total sponsorship revenues of 119 million, I think it was, and adding on top of that, through the club's owners, 830 million.

2:06And that's quite a remarkable amount of money. and then it's a case of the fact that they filed misleading accounts based upon that and then they were significantly in breach of the financial fair play rules and they committed multiple breaches of its duties to cooperate with the Premier League. It's a really extensive 40-page document which is damning for Manchester City which of course they currently deny and will appeal against but as it stands right now they are guilty of all these charges. Yeah, it's been quite the few hours. We knew that something like this was probably coming. But Paul, I guess we just didn't exactly expect it to be quite as explosive from the Premier League.

2:47Paul Robinson, sorry, I should say. Well, they've both come out swinging, haven't they? I mean, they've both got their big arsenal, their big weapons out straight away. Manchester City denying it strongly and doubling down on that and doubling down on it again today with the statement. And then the Premier League released that statement. I mean, it's very damning if you read that. but then Manchester City still absolutely adamant that they're sticking to what they've said I mean this is this is not going to go away this is something that's going to rumble on for a long time and you know we've talked about it to the nth degree already but there's going to be so many twists and turns I asked Kieran before the the game started you know what was the process and what were the stages of this Kieran and Dale and it just doesn't seem straightforward I mean Manchester City have already appealed the decision before they know what the sanctions are so this is going to to and fro to and fro but to have the Premier League words such a strong statement I mean this it doesn't look good for Manchester City at the moment but they're still sticking to their statements Carol as I said we are asking for your questions we've already had quite a few in a lot of them do seem to be concerning what happens next because there's a lot of uncertainty as we've already said as to how long this process is going to take when the appeal is going to happen the Premier League of course have said that they want to get this wrapped up as quickly as they as they possibly can But let's rattle through some of your questions then.

4:07Gary in Stoke says, is there any chance that Manchester City would be made to repay any prize money to the Premier League? Kieran, I'm wondering if you would be able to shed any light on that. I don't think so because that money's already been allocated. But effectively, the fine could be organised in such a way as to say that Manchester City received more than they would have anticipated had they not have done these things with the accounts. And therefore, that will be reflected as part of the overall settlement. And therefore, the costs involved could be very high. I've done my calculations prior to the acquisition by Abu Dhabi.

4:47Manchester City's average position in the Premier League was 14th. After the acquisition, it was second. So that works out as 12 places per season. and you get£3 million per place. So you multiply 12 times 3 times 9 and that's£324 million to add into the potential equation if that question's valid. Kieran, can I just ask you, it might sound like a really simple question, but how have the Premier League proved this? Is this through leaked documents? How have they got the evidence and such damning evidence that they're adamant? Who's found this out and how has this all come about? Well, this has all come about as a result of the hack into the Manchester City email system.

5:33And that resulted in the data being given to Football Leagues and Der Spiegel. And when that was published, that's when that provoked the UEFA investigation, which ultimately failed on sort of a technicality because it was a statute of limitations. and Dale was mentioning this earlier, but the Premier League doesn't have a statute of limitations clause embedded into its constitution. So that's allowed the Premier League to look at all of this information regardless of how it was sourced. And the proof that they've got, that they're saying that they've got proof of the allegations, that they've got proof and that they've been charged and obviously found Manchester City guilty.

6:15What level of proof have they got and how have they got this proof? Well, they will have looked at all the documentation. They would have looked at the money which has come in and out of the bank accounts. It has to be said that the auditors will have seen that information as well. So auditors would normally pick up on errors, but sometimes it is possible, if there's collusion and there's fraud, to put a series of documents together which can be scrutinised, can effectively be ticked off by the auditors. And on that basis, that's why the accounts have been approved by them. What the Premier League must have done is have a weight of evidence.

6:51And it looks like the emails can be very, very damning. I don't know whether you've seen any of them historically, but if you read them and they are true, it certainly does not reflect well on the people who wrote them. And I guess it's that evidence, along with the expert witnesses which will have been submitted or working on behalf of the Premier League, which will have persuaded the Commission that the weight of evidence is overwhelmingly in favour of the Premier League's position. we will get a much more detailed document eventually to set out exactly what's happened and why the ruling's been made at the moment it's just really a summary document which is normally 40 pages long but such is the case in this it has to be but when that actual document comes out the appendix which are mentioned in this but you can't see all the names that are redacted which we we hopefully will get to see in the end they are appearing at the moment and hopefully we'll get a much clearer picture of how the ruling was reached when we get to that point.

7:52So many questions coming in. Let's move on to another one. This one's come in for Kieran from Andrew in Manchester. Do you think there's any chance that HMRC will be interested in investigating any fraud or illegality from City? I think it's unlikely. And the reason why I say that, Kelly, is that in theory, there could have been an underpayment of PAYE and national insurance as far as some of these parallel contracts are concerned. But at the same time, had Manchester City not been cheating the system, they wouldn't have been in a position to pay the actual high wages that they were able to pay, which were ultimately on the basis of the sponsorship money, which was coming from the owner instead of the sponsors themselves.

8:38So I think HMRC will consider it, but there's not a lot for them to go on. There's certainly no corporation tax to recover because football clubs lose money and Manchester City would have lost more money had it not been for the activities that it's undertaken. There's lots of people trying to work out just how much of a points deduction or what could happen to City. And understandably, there's a lot of comparisons to other clubs. Phil in Surrey has said, if Everton were deducted six points for their first defence and two for their second, Does that mean that a 232-point deduction for City, clearly it would be pointless to do that all in one season.

9:18Could they do it across a few seasons, mean they get relegated in successive seasons? Dale, what do you think of that? That, funnily enough, that was something that we've been discussing here in Copenhagen at the European Football Clubs meeting today. That's really a 70-point deduction is the maximum you can apply in one season and for it to have an impact because 70 points pretty much relegates you. Anything above 70 points is meaningless, really, because it will have no further impact on your league position or what might happen to you. So could they decide to do it that way and try to do it over multiple seasons, depending on the number of points it is?

9:58But I guess anything's on the table for the sanction here when it does actually happen in time. But yeah, I mean, the Edmonton one is a really good example there with£19.5 million on their overspend, and they got six points for that. Now, exactly how this will break down over a number of seasons for this 830 million or 920 million, actually, when you take into account the other offences. So how you break out that 920 million into points will probably depend on how it goes across each season. I know we did it earlier, but it's about the relationship with the EFL as well, isn't it? I mean, we've got all these people from other clubs saying, oh, relegate them to League Two, put them in League One.

10:35But it's just not that simple, is it, gents? There is an agreement between the Premier League and the AFL to effectively either competition can affect, accept a disciplinary punishment, be that points or whatever, no matter which division the team's in. Now, if it was a straight points deduction, that would be fine. We've seen that with Leicester City. It would be very interesting if we did have that scenario whereby, let's say, Manchester City are given 50 points across three seasons and then they have to start the championship on minus 50 and they'll lead one on minus 50 if they were to go down again.

11:11There's another question that's actually coming from Sean in Kemp, but I'm told quite a few people have been asking this. Is there any knock-on impact on Manchester City's women's side, Dale? Do we have any indications of that at this stage? I wouldn't have thought so because they're a completely separate entity. I mean, it's not as if the financial issues are going to leave the club with no money. They've clearly got bottomless amounts of money themselves. It's just that they couldn't spend it themselves. So I can't see how that would be the case. Dale, how long will they be given if they are?

11:43It's a worst-case scenario. We're always talking worst-case scenario. so we don't want Manchester City fans texting and saying we're all doom and gloom. We're just looking at worst case scenario and answering a few questions. If the worst does happen and they are put into the EFL or they're relegated next year, how long do they have to comply with the EFL's financial rules? That's a good question. Probably Kieran's a better place to answer that specifically, but they do normally tend to give a little, I believe they give some time for that type of thing. Yeah, there is a transitional allowance.

12:14So the normal rule is that a club can spend 85 % of its revenue. But remember, what you will also have to take into consideration is that if Manchester City sell any players during the summer, that would go into their EFL pot for next season. And I think given the value of the Manchester City squad, which is in excess of£1 billion in terms of what they've spent, let alone what the players are probably worth in the market today, the mass exodus, I think that many of us would anticipate, would allow City to acclimatise to life in the EFL through player sales alone. And even if they're given a transfer ban on incomings, they do have a very strong academy and they'd be able to utilise that.

12:58There's all sorts of theories coming in here as well. Clara said if City are relegated to the Championship, could they loan out players for 12 months until they were back in the Premier League? well no well yes but no because there are there are limits about the number of clubs team players that can be loaned out so let's just take if they try to loan their senior players outside of uh of the uk they could only loan a maximum of six out um and the domestic deals deals it's a maximum of two to premier league clubs are not going to loan them to championship clubs of course so there are restrictions there there is there are certain different rules for 121 players but unlikely to apply in this really very much so yeah they could loan some out but it wouldn't be a case whereby they could loan four players to Borussia, two players to Borussia Dortmund, two players to Inter Milan, two players to Barcelona, two to Real Madrid and then bring them back there are new FIFA rules and if you're over 21 then it's a maximum of six Paul have you got any more questions?

13:59I feel like I'm still in your thunder here, I've got plenty but you seem to have quite a few. No, no not at all It's just interesting to kind of put it in layman's terms, isn't it? Because, you know, as an outsider looking in, you're trying to understand it and collect all this information at the same time. When actually everyone has got so many questions, I think the obvious ones are what next? How long is it going to take? What's the worst and what's the best case scenarios? Do you know what? There's a few people are asking that. We've got some very niche questions, but Gary in Hebden Bridge has said, realistically, given how complicated all of this is, is there any chance it could be sorted before the end of the season?

14:34What do you think about that, Kieran? I think there's a very high chance that it will be resolved. Because if it isn't, we then end up with another situation similar to that of Burnley and Everton, where a club could be relegated. Manchester City are not given a deduction this season. It's given this season, next season instead. And the club, which finishes 18th in the Premier League, will say, well, had that deduction been applied earlier, had been applied the previous season, then we wouldn't have been relegated. So that would add to the add to the complications. Certainly looking at the Premier League's press release itself, it does seem that it's very keen for this to be resolved as quickly as possible.

15:14And if you take a look at the length of time that it took the commissions in respect of Forrest and Everton, once they'd heard the evidence, actually applying the tariff was actually the quick part of the equation. It's listening to the evidence, which which is the torturous process we've been through to date, which has been the time delay. Sorry, sorry, Kelly. Let's look at it another way. Let's look at it in a positive way for Manchester City fans. Say they are to be, all these charges are to be dropped. Without stating the obvious that they have to prove it, what is it that they have to do to get off this or to remain in the Premier League?

15:49Well, I think first of all, they would have to prove if they're going to appeal against the initial verdict, they have to prove that the composition of the panel was flawed, either in the selection process or be able to identify bias in the individuals concerned. And when I've spoken to sports lawyers, the universal response to that is it's almost impossible. But that's not the same as impossible. Nothing's impossible in law when you talk to a lawyer, of course. But so I think they would struggle there. The other issue would be, could they try to take this outside of the football bubble and say that this ultimately is a commercial dispute between two companies?

16:33And therefore, the Premier League doesn't have the right to impose such penalties and try to get it resolved in a high court. Again, when I've spoken to legal professionals, they say they think it highly unlikely, but it's always a possibility, depending upon the way that the information is presented. Remember, Manchester City have overturned the UEFA ban before due to the strength of their lawyers. and some of their lawyers do have a fantastic reputation for being able to do things which was, under normal circumstances, would be considered highly unlikely. Tom in London said, is there any indication what any city appeal might be based upon?

17:16Is it the veracity of the evidence or just interpreting the same numbers differently, Kieran? I don't think it's... The evidence appears to be overwhelming. I think reading the summary report, which I think Dale and I have probably been through three or four times already this evening. What appears to be the case that one of Manchester City's defences was that the Premier League wasn't in a position to hold this hearing because of the way that the evidence had been obtained. So that was very firmly rejected by the commission. So I can't see that being overturned. As for what appears to be an overwhelming amount of evidence and the lack of faith in the Manchester City witnesses, I can't really see anything as far as these hundreds of thousands of pieces of evidence and the 7 ,000 pages of testimony, how that could possibly be overturned from a legal point of view.

18:15It has to be an attack on the people involved. Rayhan has said, if Manchester City receive a huge fine, what would the FA do with that money? Where would it go, Dale? If I remember rightly, and Kieran will put me wrong if it's not correct, I believe that share would be among the Premier League clubs themselves. And that will effectively be offset against the Premier League's legal bill. Now, again, discussions with lawyers suggest that they think that Manchester City could be liable for probably around two-thirds to three-quarters of the Premier League's legal costs, which have been estimated in the region of£50 to£60 million.

18:53So that would go to offset the remaining costs, which have been borne by the 20 Premier League clubs, including Manchester City. And Dan has said, how many clubs do you think will seek compensation? I'd imagine they claim loss of earnings, prize money, etc. Not just the teams who missed out on titles, but those who lost twice in a season to City and got relegated. I get the feeling, Kieran, that could open quite a can of worms. And if they are to do that, the individual teams, will that be a collaboration of all the teams or will that be left to each club to individually have their case? I think some clubs will seek a private settlement, a negotiated settlement, Paul.

19:28So I don't think it will be a collective, I don't think it will be a class action from other clubs. So therefore it will be done on an individual basis. Some clubs have got more an emotional relationship in this than others. Others are purely financial. And then there's a further issue. How about the players of those clubs who were denied the opportunity to win titles, who were denied the opportunity to play in the Champions League in particular? Because if you talk to players, especially those of the big six, they will often say we are on a bonus of 20 to 25 percent additional income. So if you take a look at the average earnings of a Premier League footballer in the big six, last season we were talking£160 ,000 a week on average.

20:15That's£8 million a year. 25 % of that is£2 million. You multiply that by a 25-man squad and you've got£50 million. Now, I appreciate wages weren't necessarily at this level during the period, but it's something which could go into the equation. And we'll finish on this one. Dappy said, very simply, based on everything you've read, what is the most likely punishment? Dale and Kieran, I'm kind of keen to hear what both of you think on that. Dale, you first? Well, if we're taking the Premier League statement today, the 40-page document, sorry, on that face value, then there is no way this is ever going to be anything other than a very hefty points deduction at the very minimum.

20:57Now, where it goes beyond that, we'll have to see. I mean, there is the potential, of course, for there to be a transfer embargo, which would limit the club's ability to recover from it further. But I think a transfer embargo is also quite likely considering the level of the breaches. So a huge points deduction and the transfer embargo at the very least. I agree with Dale. And on top of that, there will be a very significant financial penalty added into the equation. the logic behind having a transfer embargo is it then becomes a multi-season issue and if we go back to 2013 when Manchester City were also in breach of the initial UEFA rules during that period they had a transfer ban and a wage cap and a squad cap and so on which did impact upon the club in the consequent and subsequent seasons.

21:52Kieran final final question from me how long do you think your marriage has remaining? on the basis of the way Mrs M went up to bed tonight, if there's any marriage counsellors listening, if you could forward them my number, I'll be eternally grateful. Well, Kieran, it's been fascinating. So massive thank you to Dale Johnson and Kieran Maguire for answering all of our questions.

22:17This is the football story of the century. It's pandemonium, it's ecstasy. It's an authoritarian regime. For the past 15 years, English football has been dominated by Manchester City. They are champions again, but not only that, they've won it four years running, and no one's done that, ever. Then the Premier League dropped a bombshell. The Premier League has charged Manchester City with more than 100 breaches of its financial rules following a four-year investigation. Somebody turned up at the Etihad Stadium and effectively served papers. Here in-depth analysis and explanation on Football on Triumph, the Manchester City Charges.

22:54Listen on BBC Sounds.

22:59It felt like everything I believed in was suddenly collapsing. This is the story of an Islamic boarding school in Indonesia with a dark secret of the school's head teacher. This was someone I respected above anyone else. and the investigation led by students he's trying to silence. If this is leaked to the media, I'll be destroyed. This is World of Secrets, catching my teacher. Listen on BBC.com, the BBC app, or wherever you get your BBC podcasts.