Manchester City case: The need for a comprehensive settlement | The Football Boardroom

0:28Christian, hi, good to see you again. Manchester City, it seems. The sport seems in civil war. I've never known it like this. It's tribal. It's people seeking, potentially seeking compensation. It's fans crowing. It's fans on the defensive. It is civil war. So we need, because there's so much uncertainty over this season. Do we have a two-horse title race? Who is going to go down? The uncertainty is so bad. So look, I have to come to you as someone who's been in the room with all these people from your time as a chief executive of Liverpool, Chelsea executive at Chelsea and also at Aston Villa as well.

1:09You know the people involved. You know Masters and Alison Britton, Richard Masters, chief executive Alison Britton, the chair of the Premier League. If you were in the Premier League boardroom now, how would you try and find a compass and map to guide this brilliant sport, but a damaged sport out of this mess? Well, I agree with you. It is a mess because as of Friday afternoon, and I must repeat, we are all still waiting for confirmation from the Premier League tribunal as to their decision. Confirmation from the two parties, the Premier League and Man City, that what we read on Friday stands up.

1:56But there is no doubt the game changed on Friday afternoon. I sense, like you do, a completely new phase has been entered where, frankly, this season and the Premier League is in jeopardy. because the notion that we run through a season with the potential for a team currently sitting top of the league to suffer significant sanctions, which would impact the outcome of every other team in the league, that is very damaging to the spectacle, to the product, to the core of the Premier League, which is putting on this incredible competition. So for that reason, I've spent all weekend scratching my head and trying to answer the question, what should happen next?

2:49I think we're at a moment in time where we need a comprehensive settlement of these matters. And I realise that that will not be welcome to Manchester City and some Manchester City fans who rightly will feel it's entirely the club's prerogative to appeal this decision and continue the legal fight to clear their name. but I would suggest Henry that we've moved into an era now where if this project for many years and I think it has been you know a remarkably effective way for the nation of Abu Dhabi to project its brand worldwide and to be associated with a football club that's now become one of the most successful teams in the world and that's been a positive thing I think we're now entering an era where that is much less clear.

3:42It could be very damaging for Man City and for that reason I'm wondering about what a settlement might look like. Well just before we get into the potential settlement I mean just reading the chairman Khaldun Al Mubarak's statement from the weekend on Saturday he doesn't sound like he's ready for any settlement so just a couple of it he says The Premier League process still has a long way to run and our confidence and intent in proving the club's innocence is just as strong as when this began. And then while some people have been quick to reach their own conclusions and there is so much noise swirling around us, nothing has changed.

4:24We have faced challenges together, he's talking to the fans here, together before and have prevailed. There remain many who want to undermine the momentum of our club. We will not give them that opportunity. He doesn't sound like someone who is rushing to the negotiating table. No, he does not. And I was very struck by the fact that he even chose to comment publicly because he points out in the weekend statement that these matters remain confidential and we've heard absolutely nothing from the tribunal, the three judges themselves, or from the Premier League, the other party. So and I thought it was I'll try and pick my words carefully here.

5:08It was a strange phrase to say nothing has changed because I think a lot changed on Friday afternoon until Friday. with the presumption of innocence at the heart of all our legal systems, and proudly so for thousands of years, that changed because we are led to believe that a guilty verdict has been found on 114 of the 115 charges. And so that will naturally influence millions of football fans to believe that there is guilt here. And the fact that he is saying nothing has changed, I find rather worrying. And the fact that he repeats the phrase that he has incontrovertible evidence. Well, it would appear that three judges who heard both parties evidence in a case that was heard between September and Christmas 24 and have taken two years, two years to study the evidence provided by both parties.

6:17It would seem that those judges most definitely do not view Manchester City's evidence as incontrovertible. So I really think a lot changed and it's for that reason. And the fact that we now have consequences that could spiral out of control, particularly legal consequences, the fact that we have had recent cases in football, one in particular involving Everton and Burnley, where a tribunal has ruled that Everton were to pay Burnley£35 million. and it was deemed that those regulation breaches caused Everton to stay up and Burnley to be relegated. That ruling, when applied to these Man City findings, could lead to an absolute waterfall of legal claims by rival clubs.

7:09And I find that perhaps the most worrying of all aspects of Friday, that we enter into an era not of approaching resolution of these matters, but actually spiraling into a whole new era of uncertainty. So what would a settlement look like? Well, what's going through my mind is I think three aspects here. The first is that there's no running away from the biggest issue, which is sanctions, sanctioning and finding a punishment that fits the crime here. And I don't think there is a serious person who has been in football, who's commented on football or indeed a football fan who, if these guilty verdicts are stood up, would expect anything other than a huge sporting sanction to be applied.

8:06and probably the largest that I can think of would be and the largest that is in the gift of the tribunal right now. Remember, Henry, crucial technical point for our audience. The decision has been reached by these judges. A sanction hearing now has to be heard, which is an entirely different process. And that tribunal has complete free reign to apply sanctions, But a sporting sanction where sufficient points were deducted to relegate the team this year seems, I think, to be widely viewed as the minimum likely outcome. And I think there is an interesting challenge here in terms of sanctioning around how offences allegedly committed over nine full seasons are treated.

8:56And I think that relates to the second component of a comprehensive settlement, which is a fine or compensation payment. And let me explain what I mean by compensation. I think a very serious issue here for the league and for Manchester City is the potential for legal claims from rival clubs if a guilty verdict is confirmed. We're talking about 35 clubs here, aren't we? Yeah, over the nine seasons, 35 clubs in the Premier League have been affected. Just a point of order on that. Is that just Premier League clubs? Because obviously there are a couple of teams who will feel in other competitions, i.e.

9:43the EFL Cup and the FA Cup, where they finish runners-up to... Tony Poulis has been talking about this. Sunderland might have an issue as well. Are we just talking about Premier League sanctions on this? I think we are. I think we are. You know, the jurisdictional issues here are complicated, but I think we should certainly focus our comments today on what has been a Premier League tribunal and the findings reported on Friday. which means I'm looking at seasons, the nine seasons that are in focus here where a wide range of differing offences were alleged in each of those seasons but they all add up to a very long-term pattern and trying to think about how those 35 teams have been affected in each of those seasons is where this gets extremely complicated.

10:47If you had your spreadsheet out working out who is owed what, what positions they fill in, I know that your forensic mind, your math background, Baker Scholar, Harvard, I mean, this is absolutely right up your calculator's boulevard. But how have you actually worked that out? I mean, is there almost like a sort of metric you can do, position in the table, how much that's worth, Champions League, all those issues. Take me through that process and what sort of figure we would be heading towards. Well, you know, this is a very complicated set of scenarios that you have to factor into any such calculation because the counterfactuals are so complicated.

11:32But I think if you were going to try and make a stab at assessing loss through the league, you probably have to take a start point of saying in each of those nine seasons, let's say that Manchester City are deemed to have finished 20th in the league. then what would that outcome have meant for the other 19 teams in terms of minimum easy to validate revenues that would have been earned in that scenario? And so the most basic of the lot is every team moving up a place that is a merit payment. Those merit payments for each of those nine seasons are a matter of fact. So that's the most basic example.

12:19Literally, each place is worth a proportion of merit. That is a factual figure for each of those years. Then we have the cliffs at either end of the league, the so-called cliff edges. So I would have a second category related to the team that finished 18th, that in that scenario would have been 17th, i.e. would have avoided relegation. Well, again, much work has been done on computing the costs of relegation in recent times. Really important point for our audience to understand here. Between 2000 and 9-10 and 2018, television revenue grew significantly. And so all of these figures are much bigger today than they were in each of those nine years.

13:01But I went back and I looked at the relevant payments in each of those years to arrive at my final answer. So relegation, that's another figure for each team that finished 18th in those nice seasons. At the top end, which team finished fifth that would have been in the Champions League? It's a relatively recent phenomenon that five teams get in the Champions League. So taking the fifth place team for each of those nine seasons and then looking at what the minimum earnings from Champions League participation was for those nine seasons helps you arrive at a figure. That could be a big figure for a team like Spurs.

13:39Yeah, they were fifth more than anybody else. And again, these figures don't have to be plucked from the air. You know, minimum figures earned are a matter of record and can be plugged and played into the spreadsheet. That's the way I did it. And then perhaps the most subjective or tricky bit to value is on the three occasions that City won titles in those nine years. An award for the team that finished second, I think, in two seasons, it was Manchester United and I think in one it was Liverpool. Now, somebody who, you know, I structured, I think, three of the largest sponsorship deals in the last 20 years.

14:16And I can tell you right now that whether it was a kit manufacturing deal or with the title sponsor, there were always bonuses associated with winning trophies. And so I have factored my estimation of what those kinds of bonuses would be into a payment for the team's finishing second. And this is this gets much more subjective because I'm quite certain if I had the CEO of Man U or Liverpool on the phone to me right now, they would argue about all sorts of very difficult to compute other financial benefits associated with being champions and not second. But I would counter that, Henry, by arguing that there are a whole lot of costs that flow from winning titles as well that need to be balanced off as you compute the profit benefit of being first versus second.

15:07But look, it's just my attempt at trying to compute in an extreme scenario where, firstly, these charges across all nine seasons are stood up. These allegations, these charges are indeed determined as guilty findings. And you take as an analytical start point the notion that City's results for that season place them bottom. I get to a figure order of magnitude 550 to 600 million pounds on that basis. I mean CP that's a fairly substantial figure and that I assume obviously players might take a view on sort of bonuses and issues that they might feel compensation but what's at risk here if there is no settlement well let me be clear the the this this the fine or penalty or compensation fund as i see it is designed to deliver for man city in this scenario a waiver of all legal claims by all premier league parties all clubs and their employees in return for in return for that settlement.

16:22And in effect, H, the Premier League would then, with the kind of formulaic approach I've laid out here, effectively pay out that fund to those differing parties, according to those differing levels of loss in return for those legal claims being waived. And why am I going on about this notion of a comprehensive settlement? I'm trying to arrive at a line in the sand moment for all matters associated with this case, which have dragged on for a huge period of time. I believe as of Friday afternoon did change in terms of people's perception. I think until Friday afternoon, with the presumption of innocence, with the fact it had gone on so long, many people may have thought these matters were just gradually disappearing into the long grass.

17:14And lo and behold, what we now hear is apparently guilty verdicts across the vast majority of these charges. And I think that does change the equation. And now it just puts a question mark hanging over the Premier League, the competition going forward that is in nobody's interest, least of all the league, its 20 member clubs, the commercial appeal and the integrity of the league. All of this is thrown into doubt. And it's for that reason, that reason alone, I would love common sense to prevail and a one-off solution to be agreed by these parties. CP, this is very logical

18:06very objective but you know what football's like what would it be like in the boardroom if this was, in the Premier League boardroom first of it was suggested do you think given there is some animosity and anger at a lot of clubs and I take your point about they want financial compensation but I get the impression and certainly the mood amongst many fans There is a desire almost for revenge as well. Do you think they would accept what you're suggesting, all these clubs? Well, I'm glad you said. I really don't have an axe to grind here. And I try and think about these things objectively as if I was sitting still in that room, if I was Richard or Alison Britton, or indeed I would suggest if I was the chairman of Manchester City.

18:58I really do feel as though it's all very well continuing to claim innocence and seek to clear their name. And as I have said, it's entirely their prerogative if these guilty verdicts are as reported to appeal them and to see that process through and then to wait and see if that appeal is not successful and they are sanctioned, even to appeal those sanctions. So that is the position this morning, right now. The most likely scenario, I make no bones about it, is that Friday's story is probably true that we are going to receive confirmation of a decision with vast majority of charges, guilty findings by this tribunal.

19:46It's absolutely sure as eggs are eggs based on the chairman's statement this weekend that they will appeal that. And although appeal in Premier League rules are supposed to last approximately four months, that would be true if you're appealing one offence in one season. We're talking here, as we know, about between 115 and 130 alleged charges over nine seasons. So I think we can safely assume the appeal will take at least another year. So as we have all heard this weekend, this could run and run. That's the start point. So the only thing that could stop this is… Is a comprehensive settlement today.

20:24And I make no bones about it. That would require Manchester City to, in effect, waive their right to appeal and say, we accept that enough is enough. It would require Manchester City to agree to the terms of such a settlement. And you're asking me to flesh out what the ingredients of such a settlement would be. And I'm saying definitely a major sporting sanction, definitely a major compensation payment. OK, and that compensation payment delivers for Manchester City something that, in my opinion, is very valuable. And that would be a waiver of claims by all the parties in the Premier League. So these matters truly are behind football and behind Man City.

21:10The ultimate risk is here, Henry, for the game. The ultimate risk here, this is a technical point, is if Manchester City Football Club keep receiving legal claims from parties saying we've seen a guilty verdict, ergo we're claiming damage. there comes a point where Man City's owners, which is not the same thing as the football club, say, you know what? We're walking away from these liabilities and Man City gets put in administration and we have a complete meltdown. Is that a possibility? It's a technical possibility. If we were talking here about a football club that didn't have one of the richest countries in the world as its owner, it would be not a possibility.

21:47It would be a probability. numerous football cases where clubs have been required to put money in, have been fined or sanctioned, where owners say enough's enough, I'm walking away, has resulted in administrations. We've had one not so long ago with Sheffield Wednesday, I believe. Is there any possibility of the regulator intervening, and I'm sure there will be pressure or calls for this to happen, for some action to be taken on any of the executives, if they are found to have been involved in this wrongdoing? I think it's a perfectly legitimate question. There's been a lot of discussion in the last two years about the so-called owners and directors test moving away from essentially being managed by the Premier League or the EFL and now being the purview of the independent football regulator.

22:45I think it's perfectly likely that in the kind of settlement we are discussing here, where sporting sanctions, financial recompense are the core ingredients that a third element will probably be some heads having to roll in accordance with those tests. I mean, City have denied the charges and we have to stress that and we still wait for confirmation or for clarification from the Premier League and for City themselves. So just to wrap, we await the judgment. We await, presumably, the appeal of the judgment. We then await the sanctions. We then await, presumably, an appeal to the sanctions. And then, finally, some form of clarity.

23:35Do you think the only way we can actually get some form of clarity and certainty, which the sport is crying out for in this season, is if they embrace your idea of a comprehensive settlement? Well, let's be clear. Not so long ago, when Manchester City, as part really, as part of this entire saga, actually sued the Premier League for some section of the rulebook related to so-called associated party transactions in alleging that those rules were unlawful. And that case, that narrower, very specific case was settled out of court. A settlement that would follow on from such a wide ranging guilty verdict, as was reported on Friday, would be very different to an out of court settlement that takes place before a hearing.

24:39because nothing we've discussed on this show should suggest any form of compromise, going easy. You know, these are very serious sanctions that would be applied to make these matters come to an end. But I must stress it's entirely city's prerogative to continue to seek to clear their name. The mechanism for doing that is specified in the Premier League rulebook. It's called an appeal. I suspect the 14 day clock has started to tick on them lodging that appeal. It starts the minute the decision is handed down. So if the decision has been handed down, as reported, the clock's ticking. If it's imminent, it will tick.

25:23That's what all the evidence is from from prior statements, including the club chairman's statement this weekend, that they will appeal. And if that happens, then I'm afraid these tumultuous events and discussions of the last few days will fade away for another long period of uncertainty. But I would argue with a very different feel to that, given the backdrop would have been the decision that we read about on Friday. Good well let's hope they embrace your idea of the comprehensive settlement CP but I think we're going to be doing more episodes on this for quite a while