Email leak shines light on Man City's financial conduct

A year on from being cleared of any wrongdoing by the Court of Arbitration for Sport (CAS), Manchester City's financial conduct a decade ago is back under the spotlight.

The club's appeal to CAS was successful and their two-year ban from the Champions League, imposed by UEFA, overturned.

It has emerged, however, via reporting by British newspaper Mail on Sunday, that City have been embroiled in a secret two-year legal battle with the English Premier League.

City have reportedly failed to comply with the Premier League's demands for documentation and prevented reporting of the case via a gag order in a British court. This order has now been lifted on the grounds of public interest.

City have yet to respond publicly to reports that they breached the Premier League's rules.

What are Manchester City accused of?

According to Football Leaks, the club inflated its income in 2011 to circumvent financial fair play rules. 

That summer, the club made some significant player signings that helped shape its decade of domestic dominance, including Samir Nasri midfielder for £24.75m ($34m) and Sergio Aguero for £36m ($49m), a then club-record signing and a player who went on to become the club's all-time highest goalscorer.

Indeed, in the 10 years to the end of 2020, City earned £1.7bn ($2.3bn) in commercial income. In the same period, Premier League rivals Liverpool, Chelsea and Arsenal averaged 1.1bn each. City, who are mostly reliant on sponsors from the United Arab Emirates, earned roughly £600m ($825m) more than those other clubs.

By 2015, City had sponsorship deals with six separate UAE entities, totaling 68% of its £179m ($246m) total sponsorship income. By 2019, the figure was £140m ($192m) of £250m ($344m), allowing City to buy up the best football talent in the world.

According to the Mail on Sunday, City had launched several challenges to the Premier League's attempt to obtain information from City, but this has been rejected. City are now fighting in court to keep these details private, at least until legal proceedings are no longer active.

What do the leaked emails say?

A senior executive within the sports sponsorship team at Etihad Airways, City's main sponsor, composed an email to a contact in the partnerships department at City on April 12, 2011, appearing to query the £12m ($16.5m) shirt sponsorship deal City had with Etihad.

The email opened with: "Dear (redacted), there seems to be some confusion about an outstanding balance of the sponsorship fee for the 2010-11 season."

It goes on to explain that Etihad were only due to pay £4m, with the UAE's Executive Affairs Authority (EAA) due to pay the club the remaining £8m ($11m) of the contract, clearly not allowed under Premier League rules.

How does this break the rules?

Premier League clubs are not allowed to receive sponsorship from third parties that are closely associated with the owners of the club or related in any way.

City have therefore potentially benefited from artificially inflated sponsorship deals that dwarf those of their rivals, allowing them to gain an advantage on the field.

This is in direct contradiction to the Premier League's fair play rules and, even though the Premier League has also not commented on the ongoing legal battle with its reigning champions, the ramifications would be severe for City, with relegation from the league the ultimate punishment.

City have hired one of the UK's leading lawyers, Lord Pannick QC, to defend itself in court, with Pannick famous for having twice defeated the UK government over Brexit.

What is Football Leaks? Who is Rui Pinto?

Football Leaks has been operating since September 2015, revealing the transfer fees, wages and contract information of some famous football players. Among its first leaks were the details of Neymar's contract with Barcelona and Gareth Bale's move from Tottenham Hotspur to Real Madrid.

It was in late 2018 when Football Leaks came to widespread prominence though, partnering with German magazine Der Spiegel to reveal dramatic details of City's alleged deception of UEFA over Financial Fair Play and that several of Europe's top clubs had been in talks over a breakaway European Super League.

Rui Pinto is a Portuguese whistleblower and the creator of Football Leaks. He was arrested in January 2019 in Budapest at the behest of the Portuguese government on suspicion of extortion, violation of secrecy and illegally accessing information. After months under house arrest and a subsequent trial, however, Pinto was released in August 2020 without charge — he still remains on trial for a further 90 alleged offenses.

Pinto has gone on to do a deal with the Portuguese judicial system, turning over millions of documents to assist in its investigations into criminal activity. And according to the Mail on Sunday report, Pinto is also open to helping the Premier League in any investigation against City.

Pinto remains at liberty under a witness protection program.