Billionaire Sheiks and ‘sham’ contracts: the Manchester City scandal

0:00This is The Guardian.

0:08Today, the not-so-beautiful game. How the Manchester City scandal could change football.

0:19I have been a Man City fan for 54 years and my relationship with the club is ambivalent but incredibly close. This is Simon Haddston, a features writer for The Guardian. He was very young and recovering from a childhood illness that had nearly killed him when he started going to matches in his hometown. So I started going with my dad, who'd never been to a football match in his life, and hated footy, but that was like the sacrifice he made for me because I'd got better and he thought I'd probably die. For a long time, it was a relationship built on occasional highs.

1:02Jonathan Liew:Here come Manchester City on the right. It was 1976. Oh, I'm not a goal. Right shot. We won the League Cup. There we are. Congratulations, Manchester City, 1976. And mostly many, many lows. Joe Royal and Manchester City are relegated along with Stoke City. But then Manchester City's fortunes began to turn.

1:30So I was with my younger daughter and we were at the Etihad, although I still call it Main Road.

1:42And then the winner. Aguero! Aguero!

1:54For Simon and millions of other Man City fans, it was one of those moments that will stay with you forever. Two goals in added time for Manchester City to snatch the title away from Manchester United. Stupendous! And for the club, the start of a glittering decade of footballing glory. Big dub in! Manchester City have dub in! Once, twice, three times a champion. Champions of Europe, finally. The greatest story in club history has an ending. And what a final chapter.

2:34Until last week, it all came crashing down.

2:39Jonathan Liew:Straight to breaking news. An independent commission has found Manchester City guilty of all the charges related to serious breaches of the Premier League's financial rules over a nine-season period. For Simon, the fact that Manchester City has been found guilty of cheating their way to the top, pumping more than£900 million of illegal income into the club since 2008, it has trashed more than a decade of memories. They feel so tainted. It's really horrible. And I know it's only football, but football for loads of people is like a belief system. It's a pastime, it's a hobby, it's a way of communicating with family and friends.

3:24And when that belief system is kind of screwed over and corrupted, it's awful. But the story of the club's catastrophic fall from grace is bigger than just football. From The Guardian, I'm Annie Kelly. Today on Focus. Billionaire shakes, sham contracts and shady deals. What the Manchester City debacle tells us about sports, politics and power.

3:57Johnny Lu, Guardian, writer and all-round football aficionado. Welcome back to Today in Focus. Right, today I'm really going to need you to guide me through this. As a not-football person, this is a really, really huge deal for the game, isn't it? And it's a story that has been rumbling on for years before last week's shock announcement, right? So where should we start? Take us back maybe to 2008.

4:25Jonathan Liew:Yeah, I mean, I suppose this all begins when the Thai Prime Minister, Taxin Shinawatra, has his assets frozen. He's the owner of Manchester City. The club are essentially on the verge of bankruptcy in 2008. when they are taken over by the Sovereign Wealth Fund of Abu Dhabi. And then begins an 18-year ride of trophies and unbelievable football, unbelievable moments, all of it fuelled by the wealth of the United Arab Emirates. And tell me about the owner himself, Sheikh Mansour. Who was he and what was his interest in Man City? Yeah, so Sheikh Mansour is the brother of the president of the UAE. He's a member of the royal family.

5:11Jonathan Liew:He's the deputy prime minister. So incredibly high up and influential person in the hierarchy. OK, and in that moment, you know, when this takeover happened, this new ownership, was it, you know, was it welcomed by the fans? Was it seen as a positive thing to happen for the club? Absolutely. I mean, I think the concept of sports washing, of autocratic states using sport to kind of buttress their power wasn't really a concept that certainly most football fans were familiar with. Certainly City fans were delighted. They'd been saved from the verge of financial ruin. They weren't able to pay the bills.

5:52Jonathan Liew:and new owners bring new money and new money brings new players. And it was a lot of money, right? I mean, it was a big amount of cash they were pumping into the club. Yeah, well, I mean, one of the first signings is Rubinho, who signs for what now is a piddling£30 million. I mean, you know, championship... Pocket change now, right? It's pocket change now. Like, you know, Brighton would sign a defender for£50 million these days. But back then, this is the sort of money that absolutely detonates the English transfer market. Suddenly, Manchester City, who have barely been a mid-table club, are shopping in the premium aisle.

6:29Jonathan Liew:They're buying the best talent from around Europe and building a squad that is eventually going to compete for the title. When were the first concerns raised about what might be going on behind the scenes? In 2018, Der Spiegel publishes a huge tranche of leaked documents and emails covering the whole of European football, financial transactions, secret payments, and Manchester City is at the heart of this. It's suggested in these documents that they have been systematically inflating the value of sponsorship deals, circumventing financial regulations in order to pay, for example, players and coaches more money than they are declaring, which allows them to circumvent the rules on financial fair play and do so with impunity.

7:21And what are those rules that govern football that I guess are trying to establish a bit of a level playing field in terms of how much money you can buy players for? What are those kind of fair game rules?

7:34Jonathan Liew:Yeah, I mean, there's a lot of complexity to it, but essentially the rules are fundamentally there to stop clubs from spending much more money than they are bringing in revenue. Because then in that scenario, the club is then beholden to their benefactor. If the benefactor leaves, there's an incredible amount of debt. That club then goes bust. We saw huge numbers of clubs across the continent going bust and bankrupt in the late 2000s. That's actually why this legislation comes in in the first place. Okay, so this Der Spiegel story breaks. It must have been huge. What did Manchester City say in response at the time?

8:13Jonathan Liew:Well, pretty much what their response has been to any of the allegations that have been laid against them in the last decade or so. We didn't do it. We're totally innocent. We will fight these charges to the end. That has very much been the attitude to the present day. And in many cases, actually questioning the legitimacy of football's authorities, such as the Premier League or UEFA. Essentially, you don't tell us what to do. You don't have the authority to tell us what to do or to regulate us. Wow. OK, so they're basically questioning the ability of anyone to put any kind of checks and balances or issue any kind of penalties for them breaking the rules.

8:56Jonathan Liew:Yeah, there's a famous phrase that Manchester City use in a statement. It's a related but a slightly separate case. But they're essentially countersuing the Premier League. And the Premier League's voting rules are if two thirds of the clubs vote for a motion, that motion is carried. And City call that the tyranny of the majority. Essentially, saying that if you have a vote on this issue and it's carried by a majority of clubs, that is a kind of a despotism. And that's an incredibly dangerous place for any sport to find itself in. Yeah. So what happened next? We've had this leak. We've had Man City, this very robust denial, but also more than that, basically saying you shouldn't be allowed to tell us what we can and can't do.

9:37What happened next?

9:40Jonathan Liew:Well, off the back of the football leaks, revelations published in Der Spiegel and then obviously around the world, UEFA, which is the European football governing body, they open an inquiry into Manchester City. They find them guilty of a host of financial misdemeanours, but essentially they get let off the most serious charges. What we didn't really know at the time was that the Premier League were also opening their inquiry, an investigation into Manchester City. And then in 2023, they announced that these infamous 115 charges have been laid against Manchester City. And so begins a long, laborious, torturous process of litigation, of hearings, all carried out in secret, pretty much.

10:35So this is going over a number of years, right?

10:37Jonathan Liew:Yeah. Covering, by the way, it's important to point out, transactions going all the way back to 2008. But now Manchester City's status is under threat after having been found guilty of a majority of over 100 financial rule breaches. Sky News, the Premier League confirms you cheated for nearly a decade. Do you apologise to football fans? I have nothing to say, thank you. Are you destroying football? Thank you, thank you. Do you not have a message for football? Thank you. You know, when you've cheated for so long, do you not have an obligation? And then we got the news, this kind of quite staggering news about the charges that Manchester City have been found guilty of.

11:14Can you tell us about what happened?

11:16Jonathan Liew:Yeah, so, I mean, it gets reported that City have essentially been found guilty of all but one of the charges that have been made against them. I think it was 114 out of 115 charges, right? 114 out of 115, and that the process now moves on to the appeal stage. Wow. So tell us about those charges. You know, obviously we're not going to ask you to go through every single one, But could you summarise them for us and why they matter so much, why they're such a big deal? One of the main ways a club can bring in income is through sponsorship, commercial deals. They signed very lucrative sponsorship deals with Abu Dhabi companies, affiliated to or even run by the royal family of Abu Dhabi, who also control the club.

12:04Jonathan Liew:the charges against them were that they were inflating the value of these deals in order to provide themselves with more revenue than they would otherwise have been able to harvest from the open commercial market. Some of the other charges relate to essentially off-book payments to players, to coaches that allow them to pay higher salaries without declaring it in their accounts. I think the majority of the charges relate to accountancy, essentially not providing full financial information. So they're fiddling the books, basically. They're required. Yeah, I mean, I guess that would be sort of the...

12:41Jonathan Liew:Yeah, I mean, you probably could call it fiddling the books. At this stage, now they've been found guilty. Yeah, essentially, it is creative accountancy in order to try and give yourself a competitive advantage.

12:54So the competitive advantage means that you can pump more money into the club from sponsorships than you're really officially allowed to. and you can, I guess, pay more for players or offer players higher salaries, thus bringing in better players to your club.

13:09Jonathan Liew:Yeah, and at the time Abu Dhabi take over Manchester City, they don't have a huge global reputation. They're not generating a lot of revenue, so they're not allowed to spend as much as their owners would like them to to make them competitive in a hurry. The landscape's different now. Now they've won all these trophies. Now they are one of the biggest clubs in the world. They generate a huge amount of revenue for their ownership. It's really during this initial era where they are trying to turbocharge their ascent into a footballing superpower. Jonny, on Tuesday, the Premier League did confirm that Manchester City had inflated their accounts illegally by£900 million against the rules.

13:53But what I want to understand is, you know, how does that translate to the pitch? What does the result of that huge influx of money look like in that regard? Who could they have signed as a result?

14:07Jonathan Liew:Yeah, I mean, so, for example, the team that goes on to win the Premier League in 2011-2012, you know, players like Yaya Toure signed from Barcelona.

14:20Jonathan Liew:Sergio Aguero from Atletico Madrid. And Manchester City are in front. The deadly Sergio Aguero. Aguero's here! These are the players that win the titles. These are the players that generate this dynasty of success.

14:45Jonathan Liew:They win the Premier League title in 2012, again in 2014. Then a man, Pep Guardiola, arrives who, let's just say, doesn't work for free. Guardiola arrives in 2016 and then goes on to win six more titles, including the Champions League FA Cup League treble in 2023, which is essentially the pinnacle of the entire project. It's one of the greatest achievements in the history of English football. History-making treble winners. They've reached the promised land. What a night. What a season. Congratulations to Manchester City. Wow. Okay, so during this time that the Premier League have investigated these charges of unfair financial dealings, it worked, right?

15:35This idea that if you just pump a ton of money into Manchester City, maybe more than your competitors are able to do, you get the results.

15:43Jonathan Liew:Yeah, it works. I mean, Arsene Wenger, who obviously built that championship winning team at Arsenal in the 2000s and then watched as then first Abramovich at Chelsea and then Abu Dhabi at Manchester City begin to outspend them and watches his own team slide into mediocrity. He calls it financial doping. It's essentially inorganic growth. It's artificial growth pumped in from a benefactor, a sovereign wealth fund, billionaire, whatever, with the specific aim of distorting the market. it. And did the players know what were going on? Did the coaches know? Is there any sense of that there was any real comprehension that this kind of stuff was going on behind the scenes?

16:26Jonathan Liew:It's a really, really good question. And I think the answer is mostly no. Certainly footballers, most of them are not fully across the politics and finance of the game. They want to play football. They have an agent who deals with the financial stuff and says, look sign here and i don't think there's a huge amount of questioning that goes on beyond that now once this breaks us once the city case breaks as a story and hangs like a a black crow over english football for for years and years yes there's talk about it uh but what what you hear time and again from city players is that we we trust the ownership the ownership of assured us guardiola says the same so we are in no cell until proven i'm sorry but i spoke with the chairman i I spoke with the CEOs and I know exactly what happened.

17:11I know exactly what they did. And I trust a lot of them. So that's all.

17:17Jonathan Liew:We trust them and we trust them implicitly. And why wouldn't you? Because they are your benefactor. They're the guys who have built this club from a basket case to the most pristine, envied football team in the world. And, you know, what has the reaction been? Because, I mean, other clubs, other fans must be absolutely furious about this. Yeah, this really goes into what sport is about. I want to see them out of the Football League, non-league, asterisks against all the titles. This is serious, boys. I want to see the likes of Erling Haaland forced to change in a porter cabin and a non-league club next season.

17:58That's the level they should... Manchester is a fine tradition of facing laws that were not fair and resisting them, such as the Suffragettes.

18:06Jonathan Liew:I'm sorry, but I think the idea that City are like Emmeline Pankhurst is beyond ridiculous. Let's be real there. Come on. You're trying to massacre Manchester City. That's what's going on here. You're trying to massacre my team. You know, you can strip City of their Premier League titles, for example. You can sort of cross out red ink an entire era of English football, like Lance Armstrong, when he was found guilty of doping in cycling. You just say, you know what? That didn't exist. Nobody won. So, you know, what we've seen a lot from City fans in the last few days is, look, they can, They can take away our trophies, they can take away our medals, they can relegate us down to League Two, but they can't take away the memories, the moments that we shared, whether it was Gundogan winning the title for them in 2022 or the Aguero moment in 2012.