The Premier League‘s lucrative race for the Champions League places faces the prospect of being engulfed in legal warfare in the coming months as clubs brace for the imminent verdict on Manchester City‘s 115 charges.
After the international break and FA Cup quarter-finals, top flight fixtures resume on Tuesday but the elephant in the room remains a resolution to the biggest issue hovering over the Premier League at the moment.
Clubs expect it to come “imminently” but the process is shrouded in mystery, with nothing given away at last week’s Premier League shareholders meeting and Richard Masters refusing to say anything about the case during media rounds earlier this month.
But there’s an expectation from those in the game that the verdict will arrive before the end of the season, raising the possibility of a scenario where a City guilty verdict on a substantial number of the charges – along with a sizeable points deduction as punishment – significantly changes the complexion of the race for the top five and even the relegation battle.
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The matter is further complicated by the prospect of a lengthy appeal process after the commission’s verdict on City which could take several months to be resolved. With so much uncertainty surrounding the case, The i Paper has even been told of a scenario City could be playing Champions League football next season while an appeal is being fought out off-the-field.
Experts say the Premier League finds itself in a “crazy situation” and have told The i Paper there’s a feeling that the league could become “incredibly litigious” in the coming months, with legal bills easily hitting nine figures, if the Manchester City case is proven.
Carlos Hurtado, a sports lawyer with Baker McKenzie, believes the threat to City of multiple compensation claims is “real and serious” and says all eyes will be on a parallel compensation case brought by Burnley against Everton. Burnley are arguing they are entitled to compensation for revenue lost after being relegated at Everton’s expense in a period the Toffees were found to have breached Premier League Profit and Sustainability Rules (PSR). While it may sound as if they have a “compelling case” it is “hard to prove”, admits Hurtado.
City, of course, have been strident in maintaining their innocence on all of the 130 charges but rivals have begun the complicated process of “war gaming” possible responses to the verdict. “For everybody in the Premier League it is just a waiting game at the moment but retrospective compensation is something that is being considered by everybody,” well-connected football finance expert Kieran Maguire says.
From a footballing perspective it makes the next few weeks fascinating. While the title and relegation issues look sewn up, the Champions League spots are up for grabs with just five points separating fourth-placed Chelsea from Bournemouth in 10th. But will the league table end up with a huge asterisk against it – and legal claims running into tens of millions?
West Ham broke Premier League rules in signing Carlos Tevez (Photo: Getty)
Not quite. Way back in 2009 Sheffield United successfully brought legal action against West Ham after the Hammers broke Premier League rules over their acquisition of Carlos Tevez – which resulted in a fine but no point deduction.
Derby County also reached out-of-court settlements with Middlesbrough and Wycombe Wanderers over breaches of EFL financial fair play rules that the respective clubs argued prevented them from being promoted and staying in the Championship in successive seasons.
Perhaps more relevant, though, is Burnley’s upcoming compensation case against Everton over their PSR breach. The Clarets’ case – which is due to be heard by an independent commission featuring a three-person panel this summer – is that the delay in applying a points deduction despite breaches that covered the season when they were both fighting relegation had an impact on who stayed up. It is a case being watched eagerly by clubs in the Premier League.
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Sports lawyer Hurtado says the case is “complex and unprecedented”. “It would first need to determine if Burnley are entitled to compensation and whether there was causation which would largely be a direct cause-and-effect relationship between Everton’s PSR breach and Burnley’s relegation. In addition to this, the tribunal would have to consider the fairness of the case and the real impact of Everton’s PSR breaches on the competition.
“Burnley’s allegations may also pivot around the doctrine of ‘loss of chance’ which is largely if damages are due for the loss of Burnley’s opportunity to have fought avoiding relegation.
“To determine a potential compensation, the tribunal would consider the loss of revenue and loss of opportunities; while also factoring mitigating facts such as the parachute payments received by Burnley after relegation.”
Why does the Burnley and Everton case matter so much?
Burnley were relegated from the Premier League in 2022 (Photo: Reuters)If Burnley are successful, legal experts feel it opens a potential Pandora’s Box for the sport.
As well as clubs suing other clubs, aggrieved parties could look at taking action against the league itself for the way the rules are being applied.
And – Hurtado suggests – players could even look at taking action if their salaries have been reduced because they have suffered relegation.
In the short-term, though, it will give us an idea of whether Premier League rivals who missed out on Champions League qualification or titles during City’s era of success may have a case.
“It is possible that the Burnley and Everton case could serve as a precedent for clubs which seek to take action against Manchester City should they be found guilty of the multiple charges against them as teams that believe they were at a disadvantage as a result of Manchester City’s alleged charges may seek compensation,” he says.
“Just like relegation, failing to qualify for European competitions and a league standing can impact club revenues and all the potential claims in Manchester City’s case should they be found guilty of the alleged charges would be based on the same concept – a loss of revenue and opportunities due to breaches of sustainability rules.”
A verdict is expected any day now. While City’s recent actions – renewing Pep Guardiola‘s contract and a January spending spree – project confidence the truth is no-one really knows.
“It’s strange and it’s frustrating. I’ve been put on stand by about 10 times because ‘We’ve heard something is coming today’,” Maguire says.
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Read More“I was out with somebody a little while ago who is quite senior and he said ‘Everybody will be blindsided by it when it comes out’.
“He believes there is a very, very tightly run regime at present so anybody who claims to be ‘in the know’ or who has heard something is talking nonsense.”
There has been suggestions that the commission may deliver its verdict in two parts: first a lengthy judgement with reasons and then any punishment. Again, that would cause huge uncertainty over what the final Premier League table might look like.
“We could still have the crazy situation of the judgement coming out but the tariffs being delayed, which would be incredible,” Maguire says.
It feels like we are heading into unchartered end-of-season territory.
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