Manchester City find themselves at the center of yet another financial controversy after La Liga president Javier Tebas accused the club of manipulating financial fair play (FFP) regulations.
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Allegations of Financial Misconduct
Speaking at The Financial Times’ Business of Football Summit, Tebas claimed City were concealing their expenses within affiliated companies to sidestep financial regulations. The 62-year-old Spaniard even likened their alleged actions to the infamous Enron scandal of 2001, which remains one of the biggest corporate fraud cases in history.
Tebas revealed that La Liga had formally complained to the European Commission in July 2023, prompting an investigation into City’s financial dealings. While Manchester City have declined to comment on these allegations, the accusations have once again raised concerns about financial transparency in football.
According to Tebas, Manchester City have allegedly been shifting operational costs into external companies affiliated with their ownership group, City Football Group (CFG). He explained that the club uses scouting and marketing firms outside CFG to absorb large expenses, which are then billed back to City at reduced rates. This practice, he argues, allows the club to underreport its actual spending and remain within financial compliance.
“They have a scouting company, a marketing company. That’s where they have very high expenses. They invoice City for less money. City have costs that are less than if they didn’t have this circle of companies,” said Tebas.
He further stated, “All they do is they think about how they can avoid the rules and regulations. We have reported this to the European Union with facts and figures.”
The European Commission’s Involvement
La Liga’s complaint was filed shortly after the European Commission introduced regulations preventing companies operating within the EU from receiving foreign subsidies that could distort market competition. While Manchester City are based in England, Tebas argued that they continue to participate in European competitions and conduct commercial activities in the EU, making them subject to these regulations.
“It’s really important that all clubs are subject to transparency rules and governance and real competition in the financial and sporting side of their business. If it’s not controlled — and we do control — it means football ends up in the hands of states,” Tebas added.
He also pointed out that City’s alleged financial practices are similar to those of Paris Saint-Germain (PSG), another club La Liga has previously accused of benefiting from inflated sponsorship deals linked to their Qatari owners.
Comparisons to the Enron Scandal
Tebas drew parallels between Manchester City’s alleged financial maneuvers and the Enron scandal, a case that shook the corporate world. The American energy company collapsed in 2001 after it was discovered that losses were being hidden in off-the-books entities to maintain the appearance of financial stability.
“You remember the case in the U.S., the Enron case,” Tebas said. “They put losses into different companies. These are similar cases.”
While Enron’s fraudulent practices resulted in its bankruptcy and the downfall of its auditors, Arthur Andersen, it remains to be seen whether Manchester City’s alleged actions will lead to any significant consequences.
Manchester City’s Response and Legal Standing
Manchester City have remained silent on Tebas’ claims, opting not to issue a formal response. However, their financial records are publicly available, and there is no concrete evidence proving they have used a network of related companies to obscure their actual expenditures. Furthermore, sharing senior staff with CFG is neither illegal nor uncommon, as many clubs within multi-club ownership structures operate in a similar fashion.
It is also important to clarify that Tebas’ allegations are unrelated to Manchester City’s ongoing dispute with the Premier League, known as the “115” case. That case, concerning multiple financial breaches, is expected to reach a conclusion in the coming weeks.
Javier Tebas’ accusations have once again put Manchester City under scrutiny, reinforcing the long-standing debate over financial integrity in football. While La Liga awaits a response from the European Commission, the implications of the complaint could be significant, particularly if the investigation finds merit in the claims.
For now, Manchester City continue to operate as usual, but the growing concerns over financial governance in football could lead to stricter regulations and potential consequences for clubs engaging in questionable financial practices. Whether these allegations will hold up under legal scrutiny remains to be seen, but Tebas’ relentless pursuit of transparency suggests this issue is far from over.
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FAQs
What are the financial allegations against Manchester City?
La Liga president Javier Tebas has accused Manchester City of hiding expenses in affiliated companies to bypass financial fair play (FFP) rules, comparing their actions to the Enron scandal.
What action has La Liga taken against Manchester City?
La Liga filed a formal complaint with the European Commission in July 2023, alleging that City benefit from foreign subsidies, distorting market competition.
How did Javier Tebas compare Manchester City’s case to Enron?
Tebas likened City’s alleged financial practices to the Enron scandal, where losses were hidden in different companies to manipulate financial reports.
Has Manchester City responded to these allegations?
Manchester City have declined to comment on the accusations, and their financial records show no clear evidence of wrongdoing.
Is this related to Manchester City’s 115 charges by the Premier League?
No, the allegations made by Tebas are separate from the “115” charges against Manchester City, which are expected to be addressed in the coming weeks
