Manchester City secretly paid Roberto Mancini £1.75m into offshore account, leaked documents claim

Manchester City secretly paid Roberto Mancini £1.75m into offshore account, leaked documents claim

Man City: How damaging are the Football Leaks allegations?

It is unlikely that many of the Manchester City fans who attended the clubs match against Shakhtar Donetsk will have been too concerned about a third day of revelations and leaked emails published by German news magazine Der Spiegel.

With their team the reigning Premier League champions, top of the league, and known for playing some of the best football that the English game has seen, most City supporters will refuse to allow allegations that their club deceived Uefa over financial fair play (FFP) rules to detract from pride in their club.

Nor will claims – however concerning – that executives ignored internal warnings about the reputational risk of striking a sponsorship deal with a Dubai-based construction company accused of mistreating migrant workers, and that a director sought to delay a response to a Freedom of Information request from a respected human rights expert over a commercial deal with the city council, have spoiled the fans enjoyment of yet another convincing victory.

Sportsmail understands there are certain challenges facing UEFAs legal team, the main concern being the method by which the allegedly genuine documents were obtained by Football Leaks. If they were indeed seized illegally, that could present its own challenges in a potential legal battle with Citys lawyers.

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City supporters are used to such scrutiny of course. They have grown accustomed to the suggestion that owner Sheikh Mansours spending spree over the past 10 years has devalued their on-field achievements and enabled them to buy success. That their club is being used as a form of soft-power, to improve the image of a repressive regime in the United Arab Emirates that continues to be accused of human rights abuses.

Many therefore, will be dismissing the current scrutiny – and the criticism it has sparked – as the latest manifestation of jealousy and hypocrisy, and some will no doubt have jeered the Champions League anthem even louder than usual in defiance.

But every club is subjected to an annual break even assessment and sources in Nyon seem to think that could well be where City could run into serious difficulties with FFP regulations, given that the sponsorship deals that have allegedly been financed by club owner Sheik Mansour remain in existence.

Others however, may not find it quite so easy to excuse a controversy that is rapidly becoming one of the most serious in the decade of Abu-Dhabi ownership at City, and which threatens to cast a shadow over the dominant force in English football.

We have known since 2014, when City reluctantly accepted a settlement with Uefa that included a £49m fine (two-thirds of which was suspended and avoided) along with restrictions on their European squad and incoming transfers, that the club were found to have breached the FFP rules. What Der Spiegels revelations claim to have shown for the first time however is how it was done, and the extent of the alleged deception.

In the latest chapter in the football leaks series, City are also accused of striking a legally-binding third party player ownership deal to cream off the best African talent from a Danish feeder club. In the agreement signed May 26, 2016, Tom Vernon, the British president of FC Nordsjaelland, is alleged to have committed his club to giving up West African talents from the clubs lauded Right to Dream Academy in Ghana. 

Manchester City alleged to have ignored warnings about deal with company accused of mistreating migrant workers

So far the claims of financial malpractice fall into two broad categories; firstly, that sponsorship deals were artificially inflated and not valued fairly or independent (as City previously insisted), with tens of millions of pounds thought to have been paid by commercial partners, actually coming directly and discreetly from the clubs owner. And secondly, that City under a scheme called Project Longbow set up a shell company to pay players for image rights, saving millions more from the wage bill.

The BBC has not been able to verify the leaked emails published by Der Spiegel, and City have refused to comment, beyond saying that the documents are “purportedly hacked or stolen” and an “organised attempt” to smear the club. But crucially, nor have they denied they are genuine. If they are authentic – (and Der Spiegel insist that their source – purportedly the founder of the Football Leaks whistleblower website – has assured them that he did not hack or steal the documents) – then many will inevitably conclude that they do not reflect well on the club, and raise serious questions over its integrity and its respect for the rules.

FC Nordsjaellands Vernon told Politiken: "We are confident that we are in compliance with all relevant football regulations in our running of Right to Dream and FC Nordsjælland. No student was ever, and never will be, prevented from transferring from Right to Dream by any third party club, including Manchester City – and such a situation has never been discussed." 

What is not yet fully known is how much of this Uefa was already aware of, and how much it really cares.

Jose Mourinho was appointed by United with the intention of halting Citys charge and to return the club to the glory years overseen by Sir Alex Ferguson. However, they are lagging well behind City in the league this season.

Remember that as far back as 2014, Uefa had concerns over the value of Citys shirt and stadium sponsorship with airline Etihad, and deals from image rights and intellectual property. Eighteen months ago, the Independent newspaper claimed that City was making millions of pounds from image rights deals, three years after saying they were forfeiting that income to secure a lump sum to help comply with the FFP rules.

The investment of Sheikh Mansour has turned City into a football juggernaut over the last decade, culminating in winning the Premier League title last season in record-breaking fashion.

Uefa is now under mounting pressure to act again and demonstrate that such apparent disregard for its rules cannot be tolerated. So far it has refused to comment “due to confidentiality obligations” which it says must be respected, and it may well conclude that its own rules do not allow for City to be sanctioned for a second time after the 2014 settlement.

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But given the new claims and details, most of which Uefa are unlikely to have been aware of originally, doing nothing will make it look weak, especially when City always maintained they had acted within the regulations. Such a denial now appears undermined.

The latest revelations of leaks published by the German magazine Der Spiegel alleges that the bulk of Mancinis salary was paid to him for being an adviser to the Al Jazira Sports and Cultural Club in Abu Dhabi, also owned by Sheikh Mansour.

La Liga are leading the calls for a fresh investigation into Citys finances, threatening to lodge a complaint with the EU competition authorities.

Mancini signed two contracts on the same day – one a base £1.45 million a year for City, before bonuses, and the other a base £1.75 million with the Abu Dhabi, paid into an offshore shell company in Mauritius called Sparkleglow Holdings.

The revelations are likely to anger the fans and owners of smaller teams from the likes of Eastern Europe that were excluded from Uefa competitions over other breaches. But anyone expecting City to be kicked out of the Champions League is likely to be disappointed.

Manchester City have been alleged to have hidden more than half the salary to their former manager Roberto Mancini when he joined the club in 2011.

Uefa are understood to be wary of the threat of a legal challenge by clubs with the resources of City and PSG, and reluctant to weaken their competitions by excluding some of the worlds best players. Let us not forget that in 2014, rather than make an example of City and ban them from Europe, Uefa instead struck a deal that saw one of the richest clubs in the world handed a fine of just £17m. That does not suggest a governing body that is too bothered about getting tough.

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It is also aware of the hypocrisy that exists in football, mindful of the fact that Real Madrid was one of seven Spanish clubs ordered to repay tens of millions of euros of state aid in 2016 after the European Commission ruled that preferential loans to the clubs and deals on tax and property constituted illegal government help. La Ligas condemnation of City and PSG will therefore be viewed in that context.

Der Spiegel reported last week City and PSG breached FFP rules by €188 million (£164 million) and €215 million respectively in 2014, and tried to cover up the breach using vast sponsorship deals connected to their oil-rich owners that far exceeded their true market value. City have subsequently been accused in more leaked documents of an array of attempts to inflate and backdate sponsorship deals to deceive Uefa.

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Some have suggested that Citys apparent attempts to circumvent FFP are nothing more than a canny and understandable exploitation of various loopholes in the rules, and should be viewed with some sympathy, given the controversy surrounding FFP.

According to the latest claims from the Football Leaks whistle-blowers published by German magazine Der Spiegel, City pushed ahead with a £7 million-a-year regional sponsorship contract with Arabtec, a controversial Dubai-based construction company, despite club staff expressing concerns about the morality of such a deal and the potential impact it would have on their reputation.

Established in 2011 to prevent clubs spending more than they earned and getting into financial problems which might threaten their long-term survival, FFP originally limited clubs to losses of £26m over a three-year period. Critics argued it was a restrictive and crude attempt to entrench the status quo, favouring the established clubs with the biggest incomes, and making life difficult for ambitious challengers, contributing to a lack of competition in some leagues.

They pointed out that the system allowed for a club like Manchester United to be saddled with hundreds of millions of pounds of debt and interest repayments by its Florida-based owners the Glazers – who also take tens of millions out of the club for themselves each year – yet punished City.

Uefa has yet to comment publicly but Tebas, despite claiming everything is crystal clear now in relation to the alleged dirty tricks of City and PSG, fears the European governing bodys links with broadcaster beIN Sport, who have committed billions of pounds to televise Champions League matches and other competitions, present an obstacle to Uefa acting.

This despite the club earning praise for the way it has invested £1.45bn of Abu Dhabis sovereign wealth since Sheikh Mansours takeover in 2008, achieving an annual profit in each of the past four years of accounts, developing a respected youth system, and regenerating parts of east Manchester.

“And then it [the agreement] is approved by an independent body of absolute professionals, so you could have refused or tried for x number of changes. Fifty top people from clubs, lawyers and so on looked at the cases – you mean, could I make something [a secret deal] in the background? Impossible.”

The fact that a new FFP system was adapted earlier this year, meaning clubs are now prevented from running a deficit of more than £90m/season purely on transfer spending, suggests an acceptance that the original rules were flawed.

FIFA president Gianni Infantino says it was his job to “seek solutions” instead of kicking clubs out of competitions following accusations UEFA let Manchester City and Paris Saint-Germain avoid more severe Financial Fair Play (FFP) sanctions when he was the organisations general secretary.

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While City, PSG and other clubs appear to have made a mockery of FFP, Uefa stands by its regulations, arguing that they have made club finances healthier and more stable than ever, with 1,700m euros of combined losses across professional European leagues in 2011 transformed into 600m euros of profit last year.

You can agree with the principle of FFP or reject it. And while some observers will be dismayed by Der Spiegels rare and fascinating insight into the murky underbelly of the football industry, and the decisions apparently taken by Citys hierarchy as they plotted their assault on English footballs established order, others will merely view it as reinforcing their suspicions and their perceptions of a game already tainted by a series of financial controversies.

Another claim from Football Leaks suggested Bayern Munich were hoping to found a breakaway European Super League with other major clubs, though Infantino is adamant he has no concerns of this ever happening.

Fifa president Gianni Infantino explains his role in Man City FFP deal

Only last month HMRC revealed that it was investigating the tax payments of 171 players, 44 clubs and 31 agents.

Man City secretly paid Roberto Mancini over double his contracted wage

Earlier this year, Cristiano Ronaldo reportedly agreed to accept a £16.4m fine and a suspended jail term to settle tax evasion charges that he denies. And who can forget the 2015 corruption scandal that brought Fifa to its knees?

These examples are entirely unrelated to Der Spiegels current revelations, but it is increasingly hard to be shocked when it comes to football and money.

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This is not to say that we should not care of course, or that the media should stop asking tough questions. Quite the opposite. Der Spiegel should be applauded for its brilliant and important journalism. Given their cultural influence and importance to their communities, it is absolutely right that big clubs like City are held to account. But football surrendered the moral high ground a long time ago, and many observers therefore have become jaded as a result. Combine that fatigue with fans tribalistic loyalty to their team, and it is easy to see why sport seems so able to withstand such controversies.

What is certain is that this story has once again highlighted the challenge that the authorities – regulators like Uefa – face when dealing with their clubs.

Clubs that are backed these days not just by private investors, but by the rulers of entire petro-states, armed with sovereign wealth funds. Whether it is top clubs jostling for a bigger share of TV money, La Liga staging matches overseas, a proposed new Saudi-backed club World Cup, or the threat of a breakaway European Super League, or City apparently flouting FFP, the rules and the established order, seems to be under threat. Footballs complex balance of power, politics and money may be approaching a tipping point.

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