Senior figures inside English football are alarmed by a scenario in which Manchester City could compete in the UEFA Champions League next season — even if the club is relegated as a consequence of the ongoing disciplinary process stemming from their financial regulations breach.

The concern centres on a single, legally awkward possibility: if Manchester City win this season's Champions League, they would qualify for next year's edition as title holders. BBC Sport has confirmed there is no automatic mechanism within UEFA's framework to strip a club of a place earned through sporting merit.

The licensing problem

Every club must hold a UEFA licence to participate in European competition. In England, those licences are issued by the Football Association and administered by the Premier League. The criteria for approval are built around current financial performance — not historical offences or sanctions handed down after the fact.

One source told BBC Sport that the issue of Manchester City's licence eligibility "had been raised" and that any solution "would require the sort of joined-up thinking that's been a bit lacking so far." A second source added that "licences are awarded on the basis of current financial performance, so the grounds to refuse one are unclear."

The standard grounds for refusing a licence — overdue payments to clubs, players, or tax authorities — do not apply to Manchester City's situation. Match-fixing convictions and multi-club ownership conflicts are also considered, but neither is relevant here.

What punishment could follow

An independent commission found Manchester City guilty of inflating sponsorship revenue by £830 million through fraudulent contracts, as well as concealing additional expenses of £90 million. The commission concluded that without these manipulations, Manchester City would have breached profit and sustainability rules across all nine seasons from 2009-10 to 2017-18.

Manchester City have strenuously denied any wrongdoing, describing the verdict as a "Premier League conspiracy," and last week lodged a formal appeal. A sanctioning hearing — which will determine the level of punishment — has not yet been scheduled.

If the appeal fails, severe consequences are expected: heavy points deductions, significant fines, and transfer embargos are all on the table. A large points deduction could eliminate any possibility of qualifying through league position, but Manchester City might still qualify via domestic cup competitions. Expulsion from the Premier League altogether also remains an option.

UEFA's limited room to act

UEFA cannot intervene while the Premier League's own disciplinary process is ongoing. However, it is understood that the UEFA administration and the UEFA Club Financial Control Body (CFCB) are monitoring potential scenarios closely.

The Premier League found Manchester City guilty of five charges relating to breaches of UEFA's own profit and sustainability rules, which could prompt UEFA to open a separate disciplinary case. Yet there is no certainty here either — Manchester City's offences are historical in nature, and in 2020, the Court of Arbitration for Sport overturned a two-year European ban issued by UEFA, ruling the offences "time-barred" under UEFA's regulations.

Should that precedent hold, any UEFA attempt to exclude Manchester City from the Champions League could once again be overturned. Senior figures across both English and European football acknowledge that the optics of Manchester City competing alongside the continent's elite while facing heavy domestic sanctions would be deeply uncomfortable — but no clear legal mechanism currently exists to prevent it.

It is not only the Champions League at stake. Victory in the FA Cup or the Carabao Cup — Manchester City face Brighton in the fourth round on 28 October — would earn places in the UEFA Europa League or the UEFA Conference League respectively, compounding the dilemma further.