Football Association says Man City verdict carries 'major implications for sport's integrity

KUALA LUMPUR, 2 OCTOBER 2026 —

Manchester City’s Financial Scandal Deepens as FA Signals Action, with £830m Funding Scheme and Tax Liabilities at Stake

The Football Association (FA) has warned that Manchester City’s conviction for breaching Premier League financial regulations over nearly a decade poses "significant implications for the integrity of the game", while leaving open the possibility of further disciplinary action against the club.

The independent commission’s verdict—delivered after a two-year investigation—found City guilty of all charges, including the use of "sham contracts" and "disguised funding" to the tune of £830.69 million between the 2009-10 and 2017-18 seasons, a sum that allowed the club to evade financial fair play rules while appearing compliant.

The FA’s measured but firm response—"We are carefully considering the decision and its implications and will take action where appropriate"—comes as the club faces mounting pressure, including potential tax liabilities of up to £24 million, legal threats from its sponsors, and a looming appeal deadline of Friday.

The scandal has also drawn scrutiny from UK lawmakers, with the Treasury Committee demanding clarity from HMRC on whether it has sought the redacted documents from the commission’s report, which could expose further financial irregularities.

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A Decade of Financial Manipulation: How City Evaded Rules The independent commission’s findings paint a picture of systematic deception, with City accused of structuring commercial deals to mask the true source of funding—primarily from Abu Dhabi United Group (ADUG), the sovereign wealth fund controlled by Sheikh Mansour bin Zayed Al Nahyan, the UAE’s vice-president and deputy prime minister.

While Premier League rules permit state-owned bodies to sponsor clubs, the commission concluded that City exploited loopholes to inflate sponsorship values artificially, ensuring compliance with financial fair play while secretly receiving £830.69 million in undisclosed support.

Among the most damning revelations was the use of "sham contracts" with commercial partners, a tactic that not only distorted the club’s financial accounts but also potentially cost the UK exchequer millions in unpaid taxes.

A report by Tax Policy Associates—an independent research group—claims City underpaid income tax and National Insurance by as much as £12 million due to a "sham" agreement with former manager Roberto Mancini, who was allegedly paid through a £10 million "consultancy fee" that may have been misclassified to avoid tax liabilities. If proven, this could trigger penalty charges, pushing City’s total financial exposure to £24 million.

The club’s appeal strategy, as hinted by BBC Sport sources, will likely centre on arguing that key sponsorship deals—including those involving Etihad Airways, its principal sponsor—were funded directly by the Abu Dhabi government, not ADUG. However, this defence risks further complicating the case, as it would require proving that state funds were funneled through third parties in a way that misled regulators.

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Etihad Denies Involvement, Threatens Legal Action Etihad Airways, which has been categorically rejected any wrongdoing in the scandal, has accused the Premier League of damaging its reputation by releasing findings that implicate the airline without naming it directly. In a statement, the UAE’s state-owned carrier said it "rejects any finding, conclusion or implication that suggests the airline has ever been involved in improper commercial arrangements."

The airline’s threat of legal action against the Premier League underscores the high stakes for all parties involved. Etihad is owned by L’Imad, a sovereign wealth fund chaired by Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and son of the UAE president.

The airline’s involvement—whether direct or indirect—remains a critical question, as the Premier League’s rules distinguish between private and state-backed funding, and any breach could have broader implications for how foreign governments interact with English football.

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Malaysia’s Stake: Sponsorship, Tax and Reputation Risks While the Manchester City scandal is primarily a UK football story, its global financial and regulatory implications could resonate in Malaysia, where state-linked sponsorships, tax disputes, and corporate governance remain sensitive issues. Malaysian clubs, including Kelantan, Johor Darul Ta’zim, and Terengganu, have in the past secured sovereign-backed deals, particularly from Middle Eastern investors, raising questions about transparency and compliance with FIFA and AFC financial fair play rules.

The case also serves as a warning for Malaysian businesses with international operations, particularly those involved in sports sponsorship or cross-border transactions. The £24 million in potential tax liabilities for City—stemming from sham contracts and misclassified payments—highlights how aggressive tax planning can backfire when scrutinised by regulators.

In Malaysia, where LHDN (Malaysian Inland Revenue Board) has increasingly targeted transfer pricing and tax evasion, the City scandal could prompt greater scrutiny of high-profile sponsorship agreements, especially those involving government-linked companies (GLCs) or foreign state entities.

Additionally, the reputational damage to Etihad—one of the world’s largest airlines—could have indirect effects on Malaysia, where the carrier operates a major hub at Kuala Lumpur International Airport (KLIA) and has invested in low-cost carrier AirAsia. If the Premier League’s legal battle with Etihad escalates, it could disrupt commercial relationships, including potential joint ventures or sponsorship deals involving Malaysian partners.

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What’s Next for Manchester City? Relegation, Expulsion, or a Financial Settlement? City now faces three major risks: 1. Premier League Action – The FA’s "take action where appropriate" statement leaves open the possibility of points deductions, fines, or even relegation, though the Premier League has historically avoided such drastic measures. However, the scale of the breach (£830m over nine years) suggests that any penalty will be severe. 2.

Tax Investigations – The Treasury Committee’s intervention signals that HMRC may launch a deeper probe into City’s tax affairs, particularly regarding the Mancini consultancy fee and other potential sham transactions. If the UK tax authority finds evidence of deliberate misclassification, City could face backdated assessments, penalties, and criminal charges under fraudulent tax evasion laws. 3.

Sponsor Backlash – Etihad’s legal threats and denials indicate that the airline is preparing for a public relations and legal battle, which could weaken City’s commercial partnerships. Other sponsors, including Nike, Castrol, and Etihad Credit Card, may reassess their involvement if the scandal deepens, leading to lost revenue for the club.

City has until Friday to lodge an appeal, but legal experts suggest that winning on technical grounds (e.g., arguing that Abu Dhabi funds were state-backed rather than private) may not fully absolve the club of financial penalties. The Premier League’s next steps—expected within weeks—will determine whether this becomes a landmark case in sports governance, potentially leading to stricter oversight of foreign ownership in European football.

For now, the most immediate fallout will be financial: City’s £24 million tax exposure, combined with potential Premier League fines, could strain its balance sheet, especially as the club prepares for next season’s wage bill and transfer targets. The UAE’s political sensitivity—given Sheikh Mansour’s close ties to Manchester City’s ownership structure—means that any resolution will likely be negotiated behind closed doors, but the legal and regulatory pressure is only increasing.

The FA’s warning that the case has "significant implications for the integrity of the game" suggests that this is far from over. The next chapter will be written in courtrooms, tax offices, and boardrooms—not just on the pitch.