Rival clubs feel relegating Manchester City to Championship would not be enough

The Premier League will face pressure from Manchester City’s rivals to push for a sanction that will result in a prolonged absence from the top flight after the club were found guilty of more than 100 charges of financial rule-breaking.

Executives at a number of Premier League clubs have told the Guardian that a points deduction that would relegate City to the Championship for a single season would be insufficient given the scale of what an independent commission described as the club’s “disguised funding scheme” and “sham commercial deals”, which enabled them to artificially inflate their income by £900m between 2009 and 2018.

While the clubs have no involvement in the sanctioning process, the extent of their ill-feeling towards City illustrates the difficulties facing the Premier League as it seeks to conclude a case it began investigating almost eight years ago.

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The same independent commission that found City guilty of the vast majority of 115 rule breaches will determine their fate at a sanctions hearing pending the outcome of the club’s appeal, which will be heard by a newly convened independent panel.

Under new Premier League rules introduced this season, the appeal hearing must be concluded within 12 weeks of the deadline on Friday for it to be submitted, with the panel given a further 30 days to deliver its judgment, meaning a decision should be reached by the end of January next year.

While not confirmed, the sanctions hearing could take place concurrently during the same time period, although it will not be published pending the outcome of the appeal. City could also subsequently appeal against the sanctions imposed by the commission.

It is also possible that the club could delay the process further by arguing that the Premier League’s new expedited timescales should not apply given they were only introduced this season, whereas the charges against them are historic.

The club has already succeeded in delaying the publication of the commission’s “core decision”, which was finally released on Tuesday following an appeal procedure.

As prosecutor, the Premier League is permitted to petition for its preferred punishment at the sanctions hearing, with City also pleading their case, before a decision is taken by the commission.

The Premier League’s position on sanctioning will be taken independently of the clubs by the board of directors comprising the chair, Alison Brittain, the chief executive, Richard Masters, and three independent non-executive directors: Mai Fyfield, Dharmash Mistry and Matthew Ryder KC.

The commission has a wide range of sanctions at its disposal including points deductions, transfer embargos and expulsion from the Premier League. Given the scale of City’s offences, according to the independent panel, there are no comparable precedents. City say they are “innocent of the accusations made by the Premier League and a comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case”.

In the first successful profitability and sustainability rules prosecution, of Everton three years ago for a £19.5m overspend, the Premier League pushed for the club to be docked 12 points in the sanctioning hearing, with the independent commission ultimately docking them 10 points, which was reduced to six on appeal.

Many of the clubs are calling for a far more severe punishment for City given the commission’s conclusion that without the hugely inflated income they would have breached Premier League and Uefa spending limits in multiple seasons, and will also lobby to ensure that the whole process is concluded before the end of the season.

“Relegation to the Championship for one season would be insufficient,” a club source told the Guardian. “The commission has to arrive at a punishment that is proportionate for years of sustained and deliberate cheating, as well as providing a strong deterrent to it happening again.”

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The Premier League is in a difficult position, as it is also eager to prevent further mass litigation against City by rivals seeking financial recompense. Burnley were awarded £35m at an arbitration hearing earlier this year after suing Everton on the back of their PSR breach, which they claimed led to their relegation at the end of the 2021-22 season, a decision that has set a precedent for clubs claiming compensation following regulatory offences.

Manchester United, Arsenal, Tottenham and Liverpool all reserved their rights to sue City in the event of a guilty verdict two years ago, and have already held informal conversations about whether to pursue a claim now the judgment has been published. While those clubs will all arrive at individual decisions, the extent of City’s punishment could prove critical to their thinking.

Many of the top-flight clubs remain unhappy with the Premier League’s decision to reach an agreed sanction this year with Chelsea of a £10m fine after they self-reported the previous owners making unlawful payments to players and agents during the Roman Abramovich era.