Exclusive: Manchester City facing new threat of Champions League expulsion

Rivals could challenge their European status if club cuts a Financial Fair Play deal

Manchester City's place in next season's Champions' League could be challenged by rival clubs this summer because of detailed new Uefa rules over Financial Fair Play (FFP).

The news comes as the Chelsea manager, Jose Mourinho, cranked up the debate over football finances ahead of tomorrow's showdown with City by declaring that some clubs are dealing with FFP "in a dodgy way". Although Mourinho did not name City, he was speaking days after they released their 2012-13 financial results last week which showed an annual wage bill of £233 million – £639,000 a day.

City's confidence that their balance sheet will pass Uefa's FFP test is openly questioned in some quarters, with sceptics claiming they have used creative accounting to meet the guidelines, though the club categorically deny this.

Now a new problem has emerged in the obscure though highly significant small print of the new FFP rulebook. If City fail to meet FFP, a "directly affected party" has 10 days to appeal against any attempt by the club to then cut a deal with Uefa to reduce their sanction of a likely Champions League ban. City would then be exposed to a Uefa tribunal.

The governing body may deliver their verdict on clubs' finances as early as May. Arsenal and Liverpool have made it clear they expect strong enforcement of FFP by Uefa and both clubs could make the challenge – putting them in a state of open conflict with City – if either miss out on a Champions' League place.

Liverpool's principal owner, John W Henry, said in his first meeting with British newspaper journalists in 2010, that it did not matter he lacked a "'Sheikh' in front of my name" because FFP would deliver a level playing field and he had that in mind when buying Liverpool. Henry's managing director at Anfield, Ian Ayre, said in 2012 that "the rules are rules and should be hard and fast. What will kill the initiative, or certainly stifle it, is people easing themselves into it rather than the rules applying and everyone operating within them," he said.

City's status in next year's competition could only be challenged if they are first ruled a FFP defaulter and then reach a "settlement agreement", which is effectively a plea bargain. The existence of such a system has surprised FFP analysts.

The European Commission has a similar procedure which provides incentives for companies to admit to competition-law breaches in exchange for a lower fine. Thus settlement usually results in a reduced penalty as a carrot to settle in the first place. But, in football terms, it would be double edged. While it might allow FFP defaulters to escape a full Champions' League ban by effectively being put on probation to get their finances in order, it also opens up a legal process by which their rivals could challenge their Champions' League place.

Daniel Geey, the football law specialist at the firm Field Fisher Waterhouse, who has advised clients and written extensively on FFP, said: "The new procedural rules and in particular Article 15 regarding settlement give the [Club Financial Control] Uefa body the power to settle before an infringement decision is made. This new rule has been implemented only months before the first break-even decisions are taken and it will take some time to understand the instances where settlement may be used."

The new rules state that settlement agreements will take particular account of mitigating factors which Manchester City will draw heavily on, such as wages of players signed before June 2010, which the Abu Dhabi-owned club put at £80m.

The revelations will provide an intriguing backcloth to tomorrow night's top-of-the-table clash between City and Chelsea at the Etihad Stadium.

Under the rules, which cover the most recent two years of annual accounts, Chelsea would meet the criteria by virtue of their £1.4m profit in 2012, even though they then lost £49.4m in 2013.

When a journalist said to Mourinho at his Friday press conference: "You talked about dodgy financial fair play, and have spoken about City before..." he interrupted to reply: "There are clubs that are following exactly the project of the financial fair play and there are other clubs doing it in a dodgy way," he said. "That for me is very clear. I don't [name] the clubs, that's not my job.

"If I was a journalist interested in football, and football entourage and whatever, it would be something interesting to do and it's not very difficult to do, but that's when financial fair play, the name, the meaning has to be fair financial fair play, not dodgy financial fair play because if it's dodgy, take the fair and put just dodgy financial fair play."

Life and Style
A nearly completed RoboThespian robot inside the Engineered Arts workshop is tested in Penryn, England. The Cornish company, operating from an industrial unit near Falmouth, is the world's only maker of commercially available life sized humanoid robots
techSuper-intelligent robots could decide destroying the human race is the kindest thing to do
News
The current recommendation from Britain's Chief Medical Officer, is that people refrain from drinking on at least two days a week
food + drinkTheory is that hangovers are caused by methanol poisoning
Life and Style
techConcept would see planes coated in layer of micro-sensors and able to sense wear and tear
News
Patrick Stewart in the classiest ice bucket to date
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
newsComedian Lee Hurst started trend with first tweet using the hashtag
News
scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
News
newsRyan Crighton goes in search of the capo dei capi
Life and Style
Customers can get their caffeine fix on the move
food + drink
Extras
indybest

Arts and Entertainment
Actors front row from left, Jared Leto, Jennifer Lawrence, Meryl Streep, Ellen DeGeneres, Bradley Cooper, Peter Nyongío Jr., and, second row, from left, Channing Tatum, Julia Roberts, Kevin Spacey, Brad Pitt, Lupita Nyongío and Angelina Jolie as they pose for a
film
Sport
sport
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
Life and Style
Horst P Horst mid-fashion shoot in New York, 1949
fashionFar-reaching retrospective to celebrate Horst P Horst's six decades of creativity
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
What happens to African migrants once they land in Italy during the summer?

What happens to migrants once they land in Italy?

Memphis Barker follows their trail through southern Europe
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Frank Mugisha: Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked

Frank Mugisha: 'Coming out was a gradual process '

Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Florence Knight's perfect picnic: Make the most of summer's last Bank Holiday weekend

Florence Knight's perfect picnic

Polpetto's head chef shares her favourite recipes from Iced Earl Grey tea to baked peaches, mascarpone & brown sugar meringues...
Horst P Horst: The fashion photography genius who inspired Madonna comes to the V&A

Horst P Horst comes to the V&A

The London's museum has delved into its archives to stage a far-reaching retrospective celebrating the photographer's six decades of creativity
Mark Hix recipes: Try our chef's summery soups for a real seasonal refresher

Mark Hix's summery soups

Soup isn’t just about comforting broths and steaming hot bowls...
Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'

Tim Sherwood column

I would have taken the Crystal Palace job if I’d been offered it soon after my interview... but the whole process dragged on so I had to pull out
Eden Hazard: Young, gifted... not yet perfect

Eden Hazard: Young, gifted... not yet perfect

Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
Tim Howard: I’m an old dog. I don’t get too excited

Tim Howard: I’m an old dog. I don’t get too excited

The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

Tom Peck on Match of the Day at 50

The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition