Everything we know about the Manchester City soccer scandal

Open this photo in gallery:Man City has proven to be a key promotional vehicle for the UAE. The name of the national airline, Etihad Airways, is splashed across the team’s stadium and players’ jerseys.Ed Sykes/ReutersFew professional sports teams have enjoyed the kind of success England’s Manchester City soccer club has had since it was purchased in 2008 for about $378-million by Sheikh Mansour bin Zayed Al Nahyan, a member of the UAE’s royal family and the country’s Vice-President. Under Sheik Mansour’s ownership, the club has become one of the best-known teams in the world and has fielded stars such as Erling Haaland, Kevin De Bruyne, Rodri and head coach Pep Guardiola. Since 2008, Man City has won eight Premier League titles and the Champions League, a Europe-wide competition run by the Union of European Football Associations (UEFA).Owning sports teams has become a popular soft power investment among the UAE’s rulers and the sovereign wealth funds of other Gulf states such as Saudi Arabia and Qatar. Sheik Mansour’s group owns interests in 12 other soccer teams around the world. Saudi Arabia’s Public Investment Fund leads a consortium that owns Newcastle United of the Premier League, and the Saudis have also invested heavily in golf, tennis, boxing and Formula One. The Qataris own French soccer powerhouse Paris Saint-Germain and stakes in the NBA’s Washington Wizards, the WNBA’s Washington Mystics and the NHL’s Washington Capitals.Man City lodges ‘comprehensive’ appeal after guilty verdict in financial rule-breaking scandalMan City has proven to be a key promotional vehicle for the UAE. The name of the national airline, Etihad Airways, is splashed across the team’s stadium and players’ jerseys. “This is showing the world the true essence of who Abu Dhabi is and what Abu Dhabi is about,” said Man City chair Khaldoon Al Mubarak, a leading figure in the UAE government, in an interview with The Guardian in 2009. But all that success and goodwill has come crashing down in the wake of a lengthy investigation by the Premier League, exposing the limits, and the perils, of such high-profile sports investments.What did the team do wrong?The investigation found that Man City’s owners violated the league’s and UEFA’s financial rules by engaging in dozens of sham sponsorship transactions between 2009 and 2018. The manipulations distorted the club’s financial statements by more than $1.5-billion and allowed Sheik Mansour to spend far more on players than the rules permitted.The club has appealed the findings, but if the verdict holds up, Man City could be fined and kicked out of the league. Man City guilty of almost all of its 115 financial charges, Premier League says in explosive verdict“Man City has turned into a soft power negative nightmare for Abu Dhabi,” said Christopher Davidson, a British academic and author of Abu Dhabi: Oil and Beyond. Owning the team was never meant to be profitable, Dr. Davidson said, but the financial and reputational hit could prompt Sheik Mansour to sell the club. “What does matter now is the prestige and legitimacy of the Abu Dhabi ruling family, which every time there’s a report published on Man City just drags their name through the the mud,” he said. What kind of money is involved?Sheik Mansour’s private equity fund, Abu Dhabi United Group, has invested billions of dollars transforming Man City from a mid-rung team into a soccer powerhouse. By some estimates the owners have spent about $6-billion over the years acquiring top talent.Unlike North American pro sports leagues, there are no salary caps or player drafts in the Premier League, and trades between teams are rare; instead, clubs buy and sell players in a global marketplace.Man City ready to fight Premier League after reports that club guilty of almost all 115 chargesTop players can cost $100-million or more − and that doesn’t include millions in annual salaries. As a result, teams with deep financial pockets tend to be at the top of the standings. The league and UEFA have introduced financial limits to constrain super-wealthy owners from overspending on players. At the time of Man City’s infractions, clubs were not allowed to lose more than $200-million per year over a rolling three-year period. The league’s investigation found that Man City’s financial manipulation hid annual losses that far exceeded that threshold. What will this all mean for the team, its owners and the city?The fallout from any league sanction could have an impact beyond the playing field. Man City’s success has been an economic boon to Manchester and has led to investments in several civic projects. “They’ve been such a huge partner in the building of modern Manchester − and the building of Manchester City into the global force that it is,” said British Prime Minister Andy Burnham, a former mayor of Greater Manchester. “I would be really concerned to lose them,” he told reporters last week. The negative publicity from any sanctions could also raise questions about other UAE holdings and how the Gulf country’s funds are managed.The chairman of scandal-hit Man City has worked with Trump and Macron as part of the UAE elite“The longer this is allowed to go on can cause immense harm, especially given that the people involved at the top of Man City are also involved in key sovereign wealth funds that are investing around the world. So it starts to enter the sort of territory of failed due diligence,” Dr. Davidson said. The UAE’s three main sovereign wealth funds, including one headed by Mr. Al Mubarak, have about US$1.6-trillion in assets deployed in dozens of countries around the world. That includes Sudan, where the UAE has been accused of supporting the Rapid Support Forces militia in a civil war that has involved allegations of genocide. The UAE has rejected the allegations.What’s at stake for Canada?Last year Prime Minister Mark Carney signed an economic and trade agreement with the UAE’s rulers that included a pledge by Abu Dhabi to invest US$50-billion in Canada. Representatives from several UAE investment funds also attended Mr. Carney’s investment summit in Toronto last month. The Prime Minister views the UAE as part of his strategy to diversify Canada’s trade away from the United States. In 2025, Canada-UAE trade in goods totalled $3.5-billion.Mr. Carney called the trade agreement a “powerful vote of confidence in our economy.”