An independent commission has found Manchester City guilty of serious breaches of financial rules spanning nine seasons, revealing a sophisticated scheme that disguised more than £830 million in owner funding as legitimate sponsorship income.

The scale of the problem

When Abu Dhabi United Group purchased Manchester City in 2008, the scale of investment required became clear almost immediately. By the 2009-10 season, the club's owners recognised that total losses would surpass what was then the record single-season financial loss by any Premier League club — Chelsea FC's £140 million deficit in 2006 — a milestone City's owners were determined not to reach.

Compounding the pressure, the club projected large losses for at least five further seasons, all while UEFA and the Premier League were introducing financial fair play regulations. The only viable solution, the commission found, was to dramatically inflate commercial revenues.

The disguised funding scheme

Beginning in early 2010, City entered into sponsorship agreements at figures well above fair market value. Each deal was structured in two parts: a base fee, paid by the sponsor, and a tagged sum, paid by the club's owners. Of the £949.94 million in recorded commercial income between 2009-10 and 2017-18, the commission found only £119.25 million represented genuine base fees. The remaining £830.69 million came directly from the owners.

The ruling stated that this arrangement gave a misleading impression to regulators, auditors, and financial fair play authorities — making it appear that City's commercial revenues were far greater than they actually were. When scrutiny threatened to expose the scheme, it was periodically adjusted to, in the commission's words, "assist with continued concealment" and reduce the likelihood of awkward questions being raised.

One striking example: in May 2013, less than a week before the close of the financial year, City discovered a £9.9 million shortfall against UEFA's financial fair play requirements. Within days — without sponsors being approached — modified agreements were generated to backdate bonus payments and charge for a US tour. The shortfall was eliminated.

Project Longbow and the Fordham arrangement

In 2012, City launched an internal initiative known as Project Longbow. While much of it involved legitimate efforts to grow revenue, one component — the Fordham Arrangement — was found to be little more than a front. Owner funds were used to enable a third party called Fordham to purchase City's entitlement to player image rights at an artificially inflated price, allowing the club to record those funds as operating income. A total of £24.5 million was wrongly recorded as income, and £49.414 million was improperly excluded from operating expenses.

Hidden wages and third-party payments

The commission also identified three separate instances in which remuneration for players and managers was paid through third parties rather than appearing in the club's accounts — effectively concealing the true cost of those contracts. Payments of £8.866 million, £7.4 million, and £0.5 million were routed this way, recorded instead as consultancy fees.

Witnesses found to have lied

Perhaps the most damaging finding concerned the conduct of the club during the investigation itself. The commission concluded that City made concerted efforts to obstruct and frustrate the Premier League's inquiry. Evidence submitted by a number of key witnesses was found to be false in several material respects, with the panel concluding that certain individuals had provided testimony they knew to be untrue.

The ruling also found that City was aware its annual accounts did not present a true and fair view of the club's financial position, and that the club was reckless in allowing those misrepresentations to stand. In doing so, City failed to act with the utmost good faith owed to the Premier League and breached its duties of co-operation with the investigation.

Manchester City have denied the findings and maintain that the Premier League misunderstood the nature of the sponsorship agreements. The commission rejected that explanation outright, describing it as having been concocted well after the event in an attempt to conceal the realities of the scheme.