Manchester City’s financial ‘sham’ | The Football Boardroom

0:03Sham contracts, misstated accounts, egregious acts. Christian, the Premier League statement and the Independent Commission's 40-page report, the core decision as they call it, the findings into the breaches by Manchester City of Premier League rules and regs is so damning the language itself is strong you've obviously looked at the report i mean what what first strikes you is it the language is it the the guilty guilty guilty

0:44Henry:both um i think i've said to you privately in the last few weeks i've been consistently struck by the rather wishy-washy way in which the offenses that manchester city were accused of are often referred to no more the language of both the decision I think for our audience's benefit that's really the verdict across the 115 charges as well as the Premier League's very long and very comprehensive and extremely hard-hitting statement on their reaction to this verdict is anything but wishy-washy language and that is because the heart of this case the serious charges, and the Premier League goes out of its way, H, to point out that they were found guilty on every single one of the serious charges.

1:36Henry:And we did tell our audience several months ago, it is important to realise the 115 had a range of charges in varying degrees of seriousness and can be grouped into a relatively short list. The most serious, and these are described in unyielding language are really about providing false accounts. And it's been a foundational rule of the Premier League long before FFP that the Premier League is in a sense self-regulating. The league itself relies on its members, its clubs, its competitors to once a year send the league full and accurate financial reports that the league can review. And that was true long before FFP.

2:23Henry:Many of these charges, the most serious, are that the reports, the accounts sent by Manchester City to the league have been judged to have been false and misleading and inaccurate. They are incredibly serious charges to have been found guilty of in any walk of business. and the Commission and the Premier League leave us in no doubt as to what these findings point to. There is a new phrase that's going to invade the vocabulary, the lexicon of English football, which is disguised funding scheme, which basically just lays bare. I mean, the 40-page call decision is obviously only or sort of effectively a pre-seat of the fuller report, but you don't need to read between the lines.

3:14You don't need to have to sort of dance too much between the redactions to just realise how severe it is for Manchester City. And in terms of this disguised funding scheme, basically they're suggesting that sponsorship income was inflated by£830 million, pounds with much of that coming with it coming from Manchester City's owners as much as the initial sponsors and that is clearly cooking the books of the highest order.

3:48Henry:Well one thing that the Chief Executive of Manchester City would agree with me on is that and he would view it entirely differently that this case did always boil down to a central accusation and it is indeed that notion that in effect Manchester City's revenues were meaningfully inflated by disguising contracts, shams the word used repeatedly by the judges, whereas in effect the owner injected those monies into the football club rather than the sponsor. And I think this goes to the absolute heart of the verdict that this commission has determined that almost whatever evidence Manchester City sought to provide to the country, they have deemed ultimately H all roads leading to the owner of Manchester City, wherever the money came from.

4:55Henry:That's the heart of the decision and the knock-on charges that flow from that, how those revenues are accounted for, how costs are accounted for, by the way, as well. and there are charges, guilty verdicts associated with, as it were, having costs kept out of the books as well. And then a whole range of charges, most of which they've been found guilty of, for once the league sought to investigate these, which is their absolute prerogative, all clubs in the Premier League have a binding obligation to cooperate fully in good faith and provide the Premier Club essentially with whatever they ask for.

5:40Henry:and a number of charges relate to City doing whatever they could not to answer those questions expeditiously, quickly at all. But the heart of it is this notion of essentially having used various schemes to inject money from the owner into the club. It's often, it's not often that we actually hear Richard Masters, the chief executive of the Premier League. He certainly, you know, he's had to sort of drop a shoulder on a few of these questions over the last couple of years. But he's released a statement, addendum to the Premier League statement, in which he said that Manchester City systematically broke the rules, the Premier League rules, over almost a decade.

6:30And presumably they signed up for these rules. So now we're getting a reaction from them, which is still defiant. defiant in fact one point in the uh in the uh statement from the premier league it says that they've got until friday to announce their appeal which given that i think in the in the rule book they are normally allowed sort of 14 days 14 days from the decision okay so they would have had the decision 10 days or so okay my math is terrible so they would have been looking at they would be preparing for it uh we had uh khal doon the chairman uh at the weekend putting his very

7:07Henry:defiant statement out that was after the leak on friday after the leak on friday good point from david ornstein of the athletic uh whose journalism has again been absolutely vindicated which we should highlight hundred percent by the way and and praise that absolutely uh and then again today soriano has sent this uh video message to uh staff members in which he continues to to double down i mean it is remarkable video he talks about conspiracy theories it's interesting he refers to the commission which is an independent commission three very eminent uh caseys we don't know their identity but we know they are very much elite level and he refers to them as a premier league conspiracy uh premier league commission as if it's just them trying to bring down manchester the city so he's been completely defiant you've been in boardrooms you've been through obviously not squalls as as big as this storm do you think can you understand his desire to appeal defiance defiance delay delay deny deny yeah i think the strategy uh on these matters has been clear for a very very long time um there's that famous quote uh i think the the club's general counsel reported speech as to uh what the chairman uh khaledun al-mubarak had said around would rather spend 30 million pounds on the best lawyers in the world for the next 10 years than than face sanctions or penalties so so that is a you know that's that's called in the city of london a lawyering up strategy and they have certainly hired the best in the business over many years to seek to clear their name those extremely eminent lawyers they have most of the major law firms in britain and new york on speed dial they're one of the biggest investors in the world they have huge breadth of commercial interests where they can keep the legal fraternity busy I mean, Lord Panic is the best in the business.

9:20Henry:Best in the business. They have basically made sure that most of the biggest law firms in the world and eminent barristers too have been able to work for Manchester City. Just interrupting you, there was a banner at City Games which had Panic on the Streets of London. Very clever. Panic to ends, famous Manchester song. Should there be panic at the Premier League with the strength of this rebuttal from Manchester City? As to the appeal, you mean? Yeah. Well, firstly, you point to, for Ansariano, there's been this video, very detailed, and as you say, a very forthright rebuttal and language, again, almost as extreme as that we see in the Premier League statement describing their behaviour.

10:15Henry:And that is to, I think, set the scene here for some of the planks of their appeal. And let's be clear, just like in UK criminal law, you can't appeal just because you don't like a verdict. There are grounds for appealing and your appeal case needs to be grounded in those. And you can see in the language a couple of themes. One, a crucial ground for appeal would be, or basis for appeal, I should say, is whether you can prove partiality that somehow in some way the commission, which Mr Soriano describes as the Premier League Commission, not an independent commission, there's a clue there that this commission is partial, biased, is basically dancing to the drumbeat of some of Manchester City's rivals.

11:12Henry:rather than treating all clubs equally. Isn't that sort of slightly offensive? I mean, my limited knowledge of the legal world is that a lot of major businessmen, probably politicians as well around the world, actually respect the London legal situation for its probity, for its lack of partiality. And these are, again, we don't know their names. They are very redacted on the front page of the 40-page report. that these are very eminent individuals and as you rightly emphasise, independent. Yes, well, I certainly don't think he's going to have, I don't think City will have a very productive time trying to question the independence of these KCs.

12:02Henry:As to the Premier League itself, the entire point of the system, and this is lost in their statement, is once the Premier League determine there is a case to answer and in effect prosecute a member club, they are acting as the police. This passes over to, in effect, the Premier League equivalent of the judiciary, the courts. And just as in any criminal court in the UK, then the prosecution and defence have their day in court. And they did for some three months back in 2024. And for two years, subsequently, these three eminent, and I would argue, independent eminent judges have poured over the evidence.

12:50Henry:I note again, and this again is just paving the way here for another possible argument, another possible basis for appeal, which is our process issues that somehow these three eminent cases have mismanaged the legal process. So, for example, I've seen it referred to that this has taken so long and maybe that's paving the way to argue it took so long you kind of, I don't know, forgot or disregarded evidence. And I note in the decision reference to the fact that every single word of the evidence presented in court is in transcript form, 7 ,000 pages, which might help to explain for all of us football fans why it's taken so long to arrive at this decision.

13:44Henry:So what I'm saying, H, is you can see the themes here already in terms of potential grounds for City's appeal. But the heart of the appeal will be to try and turn round the heart of these guilty verdicts. And that is, and it goes to this phrase, we've seen it, we saw it on Saturday from the chairman, we saw it again today from the chief executive. The notion that City truly do believe that they have incontrovertible evidence of their innocence. And I've thought about that so much in the last three days. And I think I understand what that means. And it's something like this. If the heart of this case is about the accusation that, in effect, the owner of Manchester City, Abu Dhabi Interest, have funneled money into the club through a whole range of different entities, companies and schemes.

14:47Henry:But ultimately, the money's all come from the same place. I'm pretty certain that City must have shown these judges bank statements showing how the money moved from this bank to Manchester City with witnesses saying, yeah, I triggered this payment from this bank account to Manchester City and I can assure you this bank account contains monies that have nothing to do with the owner of Man City. So documentary evidence of where the money come from and maybe a witness saying that money has nothing to do with the owner of Man City. That would be the kind of example of what you or I would refer to as incontrovertible evidence.

15:31except the problem is the commission seems to have said we're simply not accepting that version

15:40Henry:we think ultimately this is a sham and ultimately all these monies came from the same place the owner of man city which is expressly against the rules and has not been accurately this is a crucial distinction. Yes, it was against the rules once FFP was in place, which wasn't until I think 2013. But even in those four years prior to then, your accounts did not accurately reflect the truth of where that money came from. That seems to be the heart of the guilty findings. It's the heart of Man City's belief that they are innocent, which means that they're somehow going to have to, on appeal prove uh on process that these judges have in some way that ticks the appeal box disregarded incontrovertible evidence that'll be the number of the case and i and i'll say one further thing on the appeal because i think what you're really asking me is how long no have they got a cat in hell's chance i think that's what you're really saying and have they i i must say I think most people, most reasonable businessmen like me who've been around who've been around corporate law a very long time would say the scale and magnitude of these findings, the confidence with which the decision has been written, the the language, utterly condemnatory language of the Premier League statement, leaving nobody in any doubt as to the gravity of these guilty findings would normally suggest.

17:15Henry:this looks tough but a little bit of me just wonders and and and i've got no this is just the the experience side of me says i just wonder i just wonder whether you know 114.1 is such an extreme verdict the language is so damning and condemnatory i just wonder if at the margin that will attract the attention of appeal judges sort of have the three guys just kind of made up their mind here and gone so hard so just a tiny bit of me would worry about that i i i i'm not a lawyer h i mean what many people are saying it's interesting i've been posting on social media and the reaction of a lot of people is anger at this by what city have been found to have done according to the 40-page call decision.

18:11And what punishment should they get now? How can they continue playing with this hanging over them?

18:18Henry:Well, we talked about that yesterday, and I will repeat my view that a lot has changed, contrary to the chairman's statement that nothing's changed. A lot has changed. if you are now playing against Manchester City this season at the top in the middle or towards the bottom of the league in terms of where you are or where you expect to be there really is a question mark hanging over this season a profound question mark and I didn't like it and we talked about this six months ago H when we were talking about really my views as somebody at the absolute centre of you know the strengthening of governance in the Premier League in the wake of the fan-led review the creation of an independent board at the Premier League banging the drum that it's simply not tenable to have a league with rules if the league does not enforce those rules I said all those things and I felt all those things and I still do but I'm really uncomfortable with ultimate you know with with just how points deductions play out when they hang over the league for a long period of time and and I just don't want to be listening every Sunday afternoon at the game to phrases like you know yeah City uh you know four points clear with you know 10 games to glow of course that relies on them not losing points at the end of the season when the appeal's over who wants to hear that from from our from our commentators on a Sunday afternoon and and it's true right the way up and down a three gonna go down a two gonna go down there's a team that's You know, scrabbling around fifth and sixth, suddenly going to find itself in the Champions League.

19:59Henry:It undermines the competition. So I firstly hate the idea that we are normalising, normalising the notion that this could take years more to play out. That just feels wrong. Is it potentially ruinous to the Premier League to have this hanging over it? Well, the perception and the feelings of fans should be at that. I am speaking to you tonight, both as, you know, an experienced Premier League guy. Yeah. But I'm first and foremost now a fan. And I'm wondering, I just I've had so many people text me in the last two hours saying in normal life, when you're found guilty of serious crimes, you get punished.

20:45You take your medicine in a rare number of cases.

20:49Henry:you get to sort of appeal. And I think it's something like 85 % of people who appeal criminal guilty verdicts in the UK have that appeal turned down. They're not allowed to appeal. Few more of them who actually get to appeal do reduce their sentence or indeed get exonerated. But it's a tiny percentage, 6 % of overall cases. But all of them face the medicine first. and there's a lot of people saying to me crumbs you know this are this is not you know these are minor offenses and it's not a few it's all of them and they're all serious so what should the medicine be well we talked yesterday about about what the ultimate look if this if if if if we have to take at face value um for an soriano's comments tonight the chairman's comments on saturday and And they are absolutely what we told our audience four months ago would happen, which is if there were any guilty verdicts across the 115, I don't think either of us thought it would ever be almost all of them.

21:51Henry:Any guilty verdicts, they will appeal because they have made it clear from day one years ago that that is not only their core belief, it is their legal strategy to defend this to the final, final level. And the comments tonight make it quite clear that it is their prerogative to appeal, and it is. And I think we can safely assume they either have already confirmed the appeal, or that's going to happen in days. Are we off to the High Court? Well, as you know, football has a closed judicial system. The rulebook specifically says independent commission one, independent appeal commission two, appeal to sanction three, all within football's closed system.

22:41Henry:It would be very unusual. But I think Soriano has more or less said tonight, if we lose this appeal, if we if we lose this appeal and we lose. and we're unhappy with the sanctions and we lose a sanction appeal, then we leave open the possibility of going to the UK broader courts. So I see no sign yet that Manchester City have the slightest intention of seeking early final settlement of these matters. And that means, coming back to your core question, I think we do find ourselves in a situation where over the next season we are going to have these matters hanging over football, I argue, in a very different way to the way they've hung over the game for the last eight, nine years.

23:32I mean, that is devastating for football. That is devastating for Manchester City players. Their coach, Enzo Maresco, every press conference is absolutely going to be defined by the attitude of the actions of the owners. Manchester City fans are going to walk into Anfield their next game and we absolutely know what the chant's going to be coming from the Kop. You talk about the commentators and the pundits, what they will be saying, the court of public opinion, the stands all over the country, when Manchester City coaches pull up in the service station and the fans get off, their fans are going to get it there as well.

24:08They're going to get this verbal abuse and it's up to their owners. Sorry, this is a bit of a polemic, this, but I'm so concerned about the future. I mean, this season is basically trashed if Manchester City continue it. We don't know whether they've got a title race.

24:24Henry:And that is why, H, I feel strongly you gave my scheme a name, a comprehensive settlement. Brilliant. And a comprehensive settlement, in this case, I now believe, listening to the executives running the football club, the chairman and the chief executive, it's quite clear they have no interest whatsoever in any settlement. They could not be clearer in their belief in their innocence and they could not be clearer in their intention to pursue every possible legal avenue to prove it. But I would argue this is our national game. This is now deeply damaging and undermining to our national game. an overt, we'll use every legal avenue possible argument on the record, is a challenge to the football authorities and to our country that we will carry on doing what we're doing and there's nothing you can do about it.

25:24Henry:To me, this is now effectively a diplomatic challenge. Does the Prime Minister get involved? Well, I certainly think that the woman who in August became the UK ambassador to the UAE has certainly got a big project landing on her desk within a month of arrival. I suspect there will be conversations happening right now between her and the leadership of UAE. Obviously, the owner, Sheikh Mansour, is in effect the deputy ruler of the nation. And I suspect that Andy Burnham will be getting a briefing from the civil service on how this is playing out in Abu Dhabi today. Because you're quite right, when they see the reaction of football fans' length and breadth of the country, when they see the reaction of eminent people like you.

26:23Henry:I don't know anybody who's watched more football matches than you in the last 40 years. Certainly, there is nobody who's commented on more football matches. And the language you've been using around just how compromised you think the game now is by this verdict is something that serious people will take very seriously. Many people are going to fall out in love with the game and this and the standing of this great game and this fantastically the best sporting league in the world is going to be damaged. It really is going to be damaged unless Manchester City see sense or the owners see sense and take their medicine and embark on the road to redemption, which is going to be a long road.

27:04But let's not take it via the high court.

27:06Henry:I completely agree with you. This hinges on whether at the absolute top, the highest level in Abu Dhabi, they perceive this significant shift that will flow from these guilty findings. and the road to redemption begins with embracing, facing up to rather than continually challenging and a road that leads to recovery. I'm not one of these people who wants to see City ruined. I really don't. I want to see football. I want to see less lawyers, less accountants, less podcasts by you and me on legal matters. Okay, I really do. I want to see, get back to football and let's draw a line in the sand, take your medicine, settle your claims, let's get every other club to move on and back off and that's going to be diplomacy of a different kind but there's a road map to that.

28:11Henry:and that's where I think football needs to go with this and I suspect that the Premier League board, the chairman, Alison Britton, the CEO, Richard Masters, are going to need help in government to get that on the table if they share your and my view that there is a pressing need for these matters to now be brought to a conclusion and not spun out for many more years. Well said.

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