Manchester City successfully overturned its two-year ban from the Champions League on Monday in a surprising legal victory.
The Court of Arbitration for Sport upheld City’s appeal against the UEFA ban, but imposed a €10-million ($15.42-million) fine on the club for failing to co-operate with independent investigators.
Some UEFA allegations accusing City of finance rules violations dating back several years were not proven and others were “time-barred,” the court said.
CAS plans to publish a detailed written verdict within days. That could help explain why UEFA’s case did not comply with its own internal rules and show how other evidence was weighed.
Man City joins Paris Saint-Germain, AC Milan and Galatasaray in beating UEFA in appeal cases related to finance monitoring rules in the past two years.
The decision by the three CAS judges clears the team coached by Pep Guardiola to play in the group stage of the Champions League next season. The case does not affect City’s place in this season’s competition, which resumes next month.
City’s win guarantees tens of millions of dollars in UEFA prize money next season. It also protects against players leaving to seek Champions League action with another club.
Guardiola had pledged to stay in Manchester “no matter what happens” in the courts.
“The club welcomes the implications of today’s ruling as a validation of the club’s position and the body of evidence that it was able to present,” City said in a statement.
UEFA punished Man City in February for “serious breaches” of finance monitoring rules and failing to co-operate with investigators. The allegations included that City, owned by Abu Dhabi’s royal family, misled UEFA over several years to meet financial integrity rules – known as Financial Fair Play – required to enter European club competitions.
City denied wrongdoing and said it had “irrefutable evidence” the claims were not true.
“The CAS award emphasized that most of the alleged breaches reported by the Adjudicatory Chamber of the (UEFA club finance panel) were either not established or time-barred,” the court said.
City’s win will raise doubts about the future of the UEFA Financial Fair Play program, created in 2009 after the global financial crisis.
The system was used to ban several clubs, including Galatasaray in 2016, from one season of UEFA competitions. City was the first club to be banned for two years.
In a statement, UEFA pointed blame at its own club finance investigators and judges for “insufficient conclusive evidence to uphold all of the [panel’s] conclusions” and not meeting a five-year statute of limitations.
UEFA could choose to challenge the CAS ruling at Switzerland’s supreme court. Federal appeals in CAS cases rarely succeed and only consider narrow grounds of legal procedure.
The urgent ruling came one month after a three-day hearing held by video link between Switzerland and England. A full verdict detailing the evidence, expert witness testimony and the judges’ reasons is due within days.
UEFA-appointed investigators opened a case after leaked club e-mails and documents from City officials were published by German magazine Der Spiegel in November, 2018. They were likely obtained by a hacker from Portugal.
The published evidence appeared to show City deceived UEFA by overstating sponsorship deals from 2012-16 and hid the source of revenue linked to state-backed companies in Abu Dhabi.
City never disputed the documents were authentic, but argued the evidence was stolen and reported out of context. It was unclear Monday what part the leaked documents ultimately played in the case.
UEFA had previously signed off on City’s submitted accounts since 2014. That year, UEFA fined City €20-million euros of its Champions League prize money in a first wave of assessments of European clubs’ finances. French champion PSG got the same fine in a similar case.
UEFA decided to create the FFP system 11 years ago to stabilize the soccer economy by monitoring finances of 200-plus clubs that qualify each year for its competitions. Clubs must approach break-even on commercial income and spending on transfers and salaries. Sponsor deals linked to wealthy owners must be set at fair market rates.
Critics of FFP argue it protects storied clubs with a huge fan base from being challenged by ambitious rivals with state support, like Man City and Qatar-owned PSG.
UEFA said Monday it and the European Club Association “remain committed to its principles.”
The UEFA rules will be challenged again at CAS this week. Turkish title contender Trabzonspor is appealing against a one-year ban for failing to abide by an earlier settlement deal.
The fine to be paid to UEFA will benefit other clubs, including City rivals Liverpool and Manchester United. UEFA rules require that Financial Fair Play fines – in most cases, prize money deductions – must be redistributed among other clubs who play in the Champions League or Europa League that season.