The elephant in the room after the financial investigation into Manchester City is the pressing need for other clubs to carefully calculate risks before jeopardising everything they’ve worked for.
For years, financial regulations in the Premier League have resembled a complex game of financial accounting. Clubs have been redistributing losses, amortising transfer payments over lengthy contracts, selling academy graduates for immediate profit, negotiating dubious sponsorship deals, restructuring corporate frameworks, and squeezing every permissible pound from current norms.
The case against the Citizens has starkly highlighted the potential pitfalls when a regulator deduces that a club has crossed the line of acceptable creativity, presenting a manufactured financial reality while operating under a vastly different one.
As Manchester City finds itself teetering on the brink of relegation and facing severe sanctions, a wealth of essential lessons opens up for Arsenal, Chelsea, Liverpool, Manchester United, and other Premier League representatives.
What exactly were the accusations against Manchester City?
On September 29, 2026, an independent Premier League commission found Manchester City guilty on all significant financial counts from the 2009/10 to the 2017/18 season, as well as three out of four categories related to a refusal to co-operate with the investigation.
The commission determined that the Manchester club employed a Disguised Funding Scheme through sponsorship agreements, misrepresenting owner contributions as commercial revenue. The findings concluded that reported revenue had been artificially inflated by over £830 million while operating costs had been understated. Overall, these manipulations inflated revenue and deflated expenditure by over £900 million.
The club categorically denies the commission’s conclusions and maintains its innocence. On October 1, Manchester City submitted an appeal, arguing that the verdict contains gross errors in law, principles, and factual determination. An appeal process is still on the horizon, with punitive measures pending in a separate proceeding.
To truly understand the situation, it’s crucial to set aside the talk of “115 breaches” — a figure that complicates the overall narrative. This number stemmed from an initial count of individual supposed incidents. The independent commission consolidated the case into four key blocks, akin to four substantial volumes rather than 115 separate penalties.
The first block addressed the fundamental accuracy of the reporting: Did the accounts reflect the real situation? The answer was a resounding no. The main takeaway was that several sponsorship contracts did not correspond to actual financial sources. While sponsors were officially billed for vast sums, they were, in reality, only paying a fraction of that. The remaining flagged funds originated from the owner’s investment company, Abu Dhabi United Group. Instead of openly accounting for these as owner infusions, they were disguised as commercial revenues. The crucial issue is that shareholder capital and commercial revenue are not interchangeable under financial sustainability rules; owner’s money makes a club wealthier, but it doesn’t render it self-sufficient for the regulator.
The second block pertained to UEFA. Upon recalculating the initial figures, the commission found that City significantly breached UEFA’s financial fair play regulations in the specified seasons. The third dossier covered the profitability and sustainability measures (PSR) within the Premier League itself. The fourth document chronologically addressed the investigation process: the commission acknowledged that club representatives made systematic attempts to stall and disrupt the Premier League’s investigation. This is why the scandal expanded into such a catastrophic proportion, far exceeding standard overspending issues.
Are wealthy owners a burden for clubs?
Observing Manchester City’s rise, one might mistakenly conclude that clubs should steer clear of ultra-rich owners. This is a misconception, as wealthy owners run the majority of Premier League sides. Financial regulations have never prohibited the investment of personal funds into infrastructure development.
When Sheikh Mansour acquired City in 2008, the club was no commercial giant. The case materials describe a loss-making venture requiring immense resources for an ambitious leap. The problem lay in subsequent actions. Understanding that direct owner input does not meet regulatory requirements as market revenue does, the club attempted to artificially boost commercial figures through disguised schemes. The main lesson for other teams is to clearly understand the nature of each pound — its true payer and how regulators would interpret the deal versus the club narrative.
Lesson 1: Genuine commercial growth is vital
This is the key takeaway from the entire saga. Premier League clubs have every right to pursue aggressive commercial expansion. Liverpool’s commercial revenue hit £323 million in the 2024/25 season. Arsenal has significantly boosted its figures in recent years. Even during periods of poor form, Manchester United remains a commercial powerhouse in global sport.
Growing sponsorship income isn’t illegal, but risks arise when a club becomes reliant on agreements that are indefensible in independent scrutiny. This is especially critical as the Premier League transitions to a Squad Cost Ratio (SCR) system. From the 2026/27 season, the spending limit on squads is set at 85% of total football revenue, with a transitional threshold of 115%, while UEFA’s cap stands at 70%. Revenue becomes the primary fuel for squad construction. Executives must directly question any sponsorship agreement: Would this contract maintain commercial sense if the owner were to leave the club?
Lesson 2: Don’t confuse accounting profit with real financial health
A glaring example here is Chelsea's reporting. For the 2024/25 season, the Blues’ revenue stood at £490 million, yet they also faced substantial overall losses, as salaries approached £359 million and player contract amortisation hit £212 million. While the club’s figures showed significant losses on paper, they still complied with Premier League regulations thanks to permissible write-offs and exceptions.
Such calculations aren’t violations, but they create a dangerously misleading impression of wellbeing. The new SCR system aims to simplify oversight by evaluating direct costs: player and coaching salaries, agent fees, and transfer amortisation. Clubs need to craft squads they can sustainably support, rather than manipulating their accounts around temporary loopholes.
Lesson 3: Player trading is an unreliable bedrock for a business model
The modern Premier League has created an economic paradox: a footballer simultaneously serves as an athlete and an accounting asset. Acquiring a new player for £60 million on a six-year contract evenly distributes the cost at £10 million per year. Selling a homegrown talent for £40 million registers as an instant profit, given the academy player's book value is zero. This markedly improves accounts, even if the actual cash flow is different.
In the 2024/25 season, Arsenal recorded an approximate profit of £81 million from player sales, Liverpool around £53 million, and Manchester City roughly £95 million. Smart sales are beneficial, but risks emerge when this practice becomes habitual refinancing of deficits. This is especially precarious for clubs with extreme amortisation; Chelsea's has soared to £212 million, exceeding Arsenal's £172 million and Manchester City's £170 million. Lengthy agreements impose obligations for years to come. Management should consider not a hypothetical resale but the scenario where an expensive player remains on the books without Champions League access.
Lesson 4: A cautionary tale evident in Newcastle’s experience
The Manchester City saga creates the false impression that rules exist solely against uber-wealthy clubs. Newcastle United’s experience proves otherwise. After the influx of Saudi investors in 2021, the Magpies faced strict financial constraints at a time when historic giants had already carved out colossal revenue streams. At City, they had years to convert investments into trophies, and trophies into global popularity, translating that into commercial income.
Newcastle had no such luxury. In their first three years, the new owners spent £404 million on transfers but only made £50 million in sales. The pressure from PSR rules was so intense that the club had to sell their academy product Elliot Anderson to Nottingham Forest in 2024 just to maintain balance. Financial regulations assess compliance with criteria, not the overall wealth of owners. Consequently, the club reached a settlement with UEFA, incurring a €3 million fine for exceeding squad spending limits.
Lesson 5: Acknowledging mistakes can save a reputation
Chelsea’s strategy post-leadership change in 2022 showcased an opposite approach. The new owners proactively alerted the Premier League to potential historic breaches under previous management. Investigations uncovered unreported payments from 2011 to 2018 involving players and unregistered agents. The Londoners accepted penalties of £10.75 million, a nine-month ban on registering academy players, and a conditional transfer ban for the first team lasting one year. Re-calculations indicated that the club would not have breached historical PSR limits, even had they fully disclosed those sums.
Chelsea demonstrated the value of trust. Voluntarily disclosing information and fully cooperating with the investigation significantly mitigated the punishment. In Manchester City's case, attempts to counteract the regulator yielded a contrary result: the worst strategy when faced with questionable records is to force the investigation to prove their authenticity over several years.
Lesson 6: Openness and cooperation are not mere formalities
The accusations against Manchester City were divided along two timelines: reporting violations spanned from 2009 to 2018, while charges regarding non-cooperation pertained to subsequent investigations. Regulators made it clear that the effectiveness of financial rules directly hinges on access to authentic documents.
The scale of the Citizens case proved unprecedented: millions of documents examined, hundreds of pages of witness testimonies, 42 days of hearings, and around 7,000 pages of transcripts. For any finance director in the Premier League, this precedent serves as a strict warning: complicated schemes demand transparency before the league, and upon request, clubs must provide original contracts, payment routes, and economic justifications for deals.
Lesson 7: Increased caution required for Manchester United
The Mancunians have never suffered from a revenue shortfall. In the 2025/26 season, Manchester United recorded a record income of £677 million, an adjusted EBITDA of £216 million, and an operational profit of £22 million after cost reductions.
However, the flip side remains the club's balance sheet: significant debt obligations and reliance on the global commercial appeal of the brand. A crucial lesson for the Old Trafford hierarchy is not to confuse colossal revenues with unlimited opportunities. Assuming that future Champions League earnings will invariably cover today’s transfer miscalculations poses an unjustified risk. Given the current commercial scale, the Mancunians can shape a sustainable football model without risky financial assumptions.
Lesson 8: Adherence to rules protects legacies
The Premier League and UEFA rules are designed to ensure the sustainability of the entire football ecosystem. Chelsea’s example proved that concealing missteps only exacerbates the situation. Manchester City has earned worldwide recognition for its dominance in English football over the past decade, including trophies like the treble and a string of championship titles.
Yet, when faced with exclusion from the league, past trophies pale in comparison. Sporting success is devalued if achieved through financial documentation manipulation. Public attention mercilessly fixates on negativity, and the reputation of a hegemon risks being irreparably tarnished, regardless of attempts to smooth over the aftermath with financial resources.
