0
0
With the news making the rounds in the football world, La Liga, the Spanish top flight football association, has officially filed a legal complaint with the European Commission against English club Manchester City for violating European Union Competition Law. The July 2023 complaint alleges that Manchester City has caused a “serious distortion” in the European football internal market by its financial arrangements.
La Liga chief Javier Tebas has criticized Manchester City’s financial dealings. At The Financial Times’ Business of Football summit, Tebas compared the club’s expenditure methods to the infamous Enron accounting scandal, claiming Manchester City had managed to avoid financial fair play by channeling costs through owned entities. He stated, “They have a scouting company, a marketing company. That’s where they spend very high fees. They charge City less money. City have lower costs if they don’t have this ring of companies.”
The crux of La Liga’s complaint is that Manchester City’s fiscal maneuvering, in the form of the alleged overvaluation of sponsorship contracts and underreporting of operational costs, has bestowed the club with an unfair competitive advantage. This, La Liga contends, is against the precepts of fair competition as set out in EU law.
In response to these allegations, Manchester City has vehemently denied any wrongdoing. The club claims that all transactions including money and sponsorship agreements are conducted openly and in full compliance with UEFA and EU legislation. Manchester City’s spokesperson stated, “We strongly deny the claims made by La Liga. Our operations are conducted in compliance with all applicable laws and regulations, and we will vigorously defend our position.”
This judicial action by La Liga is part of the increasing scrutiny Manchester City is facing regarding its finances. In September 2024, the club was in what has been called the “trial of the century” of English football, charged with 115 offenses of breaches of UEFA’s financial fair play rules between 2009 and 2018. The offenses include false accounting, not cooperating with inquiries, and hiding player and managerial salaries.
The outcome of La Liga’s complaint to the European Commission could have serious repercussions for Manchester City and European football in general. The potential sanctions, in the event of a guilty verdict, are enormous fines, restrictions on the signing of players, and even exclusion from European competition.
This case points to the growing trend towards legal combat in football as a result of the growing financial stakes and the control bodies’ attempt to enforce fair competition. The world of football is waiting anxiously for the European Commission’s decision, which will likely set a precedent on the enforcement of financial rules across European leagues.
The world against city