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Nicolas Sarkozy and Manchester City’s great FFP escape

The following is a report from Mediapart on former French President Nicolas Sarkozy’s involvement in enabling Manchester City to escape harsh Financial Fair Play sanctions based on new Football Leaks allegations. Football News takes no responsibility for the authenticity of the content.

Midnight on the 2nd May 2014 and UEFA General Secretary Gianni Infantino has sent an email to Khaldoon Al Mubarak, the President of Manchester City.

The email went as follows: “My apologies for writing to you so late on a Friday night. Thank you for your trust in me. You can also trust me.”

Infantino’s tone was somewhat surprising, as on this very day an investigation into Manchester City concluded that Sheikh Mansour of Abu Dhabi, the club’s owner, has heavily subsidised his club, in direct violation of Financial Fair Play regulations. As a result, the Citizens’ should have been facing a potential exclusion from the Champions’ League.

Infantino took a different approach however, writing in the same report: “of course, this must remain between us three.” Who is the third person you may ask? None other than former President of France Nicolas Sarkozy.

Sarkozy, the well-known PSG supporter and friend of Qatar, who at a now infamous lunch on the 23rd November 2010 is alleged to have urged Michel Platini, then UEFA President, to vote for the Middle Eastern country as the 2022 World Cup host nation.

What was however unknown, until today, is that Sarkozy also helped, in great secrecy, Qatar’s greatest rivals, Abu Dhabi, who also managed to escape UEFA’s wrath, according to documents obtained by Der Spiegel and analysed by Mediapart.

Sarkozy pulled this off by keeping a good relationship with both Emirati families. In 2009, he sanctioned the creation of a French military base in Abu Dhabi. When he lost the election in 2012, he allegedly tried to launch an investment fund, before giving up on that. In February 2013, he travelled to Abu Dhabi to raise money with the head of the UAE’s Mubadala sovereign wealth fund, Khaldoon Al Mubarak, who is also the president of Manchester City.

Just a year later, Al Mubarak sought out the assistance of Nicolas Sarkozy relating to UEFA’s proceedings against Manchester City. The Football Leaks documents do not offer more detail, but the intervention of a former French president, who is neither a finance nor a football expert, raises questions.

Sarkozy was of course perfectly entitled to his own opinion, but the case against Manchester City is astonishing, according to Football Leaks documents, which indicate that Abu Dhabi have allegedly injected €2.7bn into the club over the last seven years, thanks to its shareholders and supposedly overvalued sponsorship contracts, even more than the €1.8bn injected by the Qataris into PSG. This practice has been prohibited since 2010 by Financial Fair Play, first introduced by Michel Platini to prevent oligarchs from distorting football.

Football Leaks documents show that Gianni Infantino uncovered Manchester City’s FFP infringements in 2016, but chose to directly negotiate an agreement with Manchester City and bypass the investigating chamber of UEFA, also known as the CFCB Investigatory Chamber.

Mediapart allege that as early as May 2013, Manchester City were aware that FFP was going to be big problem, with the club having made a €451m loss between 2009 and 2011.

In early 2014, the CFCB Investigatory Chamber mandated accountancy house PriceWaterhouseCoopers (PwC) to go through City’s accounts. The auditors are understood to have uncovered that the club was seeking to conceal €35m in expenses by attributing them to satellite companies.

Manchester City were caught red-handed, but their strategy, according to Mediapart, was to counter-attack with legal threats, with the club implying that: “The PwC report is completely biased and contains many errors.” City’s legal counsel seeks to pressure PwC into deleting entire sections of their report, which they refuse to do, an action that infuriates the Citizens.

In mid-March of 2014, in an memo, the club’s legal counsel is alleged to have indicated that if a “reasonable agreement” was not found with the CFCB Investigatory Chamber, then Manchester City “would have no choice but to fight, against UEFA on all possible legal fronts.” The club was understood to be only willing to receive a formal warning, without paying any penalty.

More evidence then came to light, according to Mediapart. They claim that UEFA at this point has a myriad of questions regarding the seemingly overweight sponsorship deals with four companies in Abu Dhabi, which make the Citizens up to €140m a year, including a €78m-a-year deal with the airline Ethiad.

In April 2014, sports marketing agency Octagon evaluated these contracts and found that they should be worth no more than €70m a year overall in accordance with market value. Mediapart have obtained a document from the firm, which they themselves have published, clearly indicating this.

For some reason, the CFCB Investigatory Chamber seemingly ignores Octagon’s advice and only devalues the two smallest of the four deals, seeing Manchester City lose €23m in balancing books, roughly 20% of what they should have seen taken away from them, according to Mediapart.

This was a small victory for Manchester City, as in the grander scheme of things, the investigation concludes that the Citizens recorded a €233m loss between 2011 and 2013, five times over the limit set by FFP.

On May 2nd, 2014 the president of the CFCB Investigatory Chamber recommends that sanctions should be made against Manchester City, including their exclusion from the Champions’ League. For several weeks however, Gianni Infantino was posturing to negotiate a deal. At the beginning of April 2014, City’s general manager, Ferran Soriano and Infantino agreed on a meeting between lawyers. The UEFA council suggested to Manchester City that they come up with their own FFP sanction, according to Mediapart.

On the 15th of April, Soriano informed Manchester City boss Al Mubarak that another meeting with UEFA’s lawyers was schedule for the following day: “I had a very good phone call with Gianni, and we agreed on how to brief the lawyers.” The way forward: “Negotiating an agreement that is more than a warning and may appear to be a deterrent, but one that does not fundamentally affect Manchester City’s business.”

But Sheikh Mansour did, according to Mediapart, not want to give any concessions away at all – the strategy was clear: “Apply as much pressure as possible, but still leave a way out for UEFA.” The Sheikh allegedly totally refuse to pay the $60m fine that UEFA were proposing they pay.

Football Leaks cites a club executive as saying “Khaldoon said he would prefer to give €30m to the world’s top 50 lawyers to sue them for ten years.”

2nd May 2014 was a crucial day, when clubs who were viewed to have infringed FFP regulations were all due to be announced on the same day, a total of 9 teams were concerned. As feeble as the sanctions might have been, the footballing body was determined to prove that FFP will work and exist.

On the evening of May 2nd, all the clubs had signed the agreements, except one: Manchester City. And that was the evening that Infantino sent a midnight email to Al Mubarak and Sarkozy (through intermediary Consuelo Remmert). In this email, Infantino made a last minute concession: the fine drops down to €20m, and the remaining €40m will only be payable to UEFA if Man City reoffend.

Infantino wrote: “You can see that sometimes I have taken stances that seem stronger. Please read this document in that spirit. Let’s be positive!”

On 8th May, Al Mubarak and Soriano are said to have met with Infantino secretly in London, to help them prepare for their hearing the next day in front of the CFCB Investigatory Chamber. However, the hearing the day after did not go as planned, as the CFCB refuse to validate the new agreement.

Mediapart claim that Secretary Simon Cliff at that point was considering drowning UEFA in paperwork at trial, with the intention of suing Platini and Infantino in a Swiss court for abuse of power and conflict of interest. Cliff is also alleged to have consider a procedure against PwC which could “destroy the entire company in a few weeks.”

At this point, another spanner entered the works. The size of Manchester City’s fine was leaked to the press, provoking outrage on the part of PSG, with geopolitical tensions between Abu Dhabi and Qatar continuing to escalate. The club’s Director General, Jean-Claude Blanc, complained directly to Michel Platini.

The UEFA President then swore to PSG that their fine would not be more than Manchester City’s, only before promising the exact opposite to Patrick Vieira: “Tell your Abu Dhabi owners that they must trust me. We understand and love what they do for the club, and their fine will be much smaller than that of PSG,” according to a internal email at the club uncovered by Football Leaks. The Manchester City leaders were apparently satisfied by this, but Platini is understood not to have kept his word. On the 16th May, just a few hours before signing the agreement, PSG also obtains a reduction of their fine from €60m to €20m.

The fine ends up being nominal for both parties, and totally not in line with the extent to which they were alleged to have infringed upon FFP regulations. In an email to other Manchester City executives, Ferran Soriano concluded that the deal “does not materially affect them.”

Since their agreement with the UEFA in 2014, Manchester City have spent €700m on new players, including Kevin De Bruyne (€75m), Benjamin Mendy (€57m) and Aymeric Laporte (€65m).

Thanks to Infantino’s help, Manchester City were able to overcome the seven-man strong CFCB Investigatory Chamber. Mediapart claim that an email from Secretary General Simon Cliff is indicative of how much he despised them. In an alleged email from May 15th 2014, a day before signing the agreement, former Belgian Prime Minister Jean-Luc Dehaene, who had chaired the investigation chamber until his illness in early 2014, died. Cliff is alleged to have written: “One has fallen, there are six left.”

Mediapart note that nobody accepted their request for comment at Manchester City: “The information that has come out may have been hacked or stolen… The attempt to damage the reputation of the club is organised and clear.”

 

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