From the Etihad to the boardroom: governance, compliance and compensation (Premier League v Manchester City)

The recent decision regarding Manchester City Football Club has the potential to become one of the most significant regulatory moments in the history of professional sport.

On 29 September 2026, the Premier League announced that an independent commission had found the club guilty of all bar one of the 115 charges relating to serious breaches of the league’s financial rules over a nine-season period. The charges ranged from involvement in sham agreements designed to hide equity investment as sponsorship income, to its failure to cooperate with the league’s investigation. Manchester City has rejected the findings and confirmed its intention to appeal. The ramifications of the decision will undoubtedly be scrutinised through a footballing lens by fans and pundits.

However, the broader significance extends far beyond sport. The proceedings raise important questions about financial reporting, corporate governance, regulatory compliance and the increasing willingness of regulators to pursue organisations which are perceived to have circumvented rules designed to ensure transparency and fair competition.

The decision

The independent commission found that Manchester City had created a disguised funding scheme whereby it entered into a series of ‘sham’ commercial arrangements which artificially increased revenues and reduced costs over a prolonged period. The commission reportedly concluded that these arrangements inflated the club’s financial position by more than £830 million and resulted in misstated accounts being provided to regulators and auditors. It further found that the club would have exceeded both Premier League and UEFA financial fair play spending limits by a substantial margin had the relevant agreements been reported accurately. The size of the financial mis-reporting dwarfs the €212 million and €188 million financial losses recorded by PSG and Manchester City respectively in UEFA’s investigation into the 2009-2011 seasons, against the €45 million limit. In that case City accepted a £49 million conditional fine.

The findings are astonishing not simply because of their scale, but because they strike at the foundation of modern football regulation.

Financial controls such as Profitability and Sustainability Rules (PSR), salary restrictions and Financial Fair Play (FFP) regimes depend upon the accuracy of information supplied by clubs. If financial reporting cannot be relied upon, regulators face considerable difficulty in enforcing competitive safeguards designed to maintain a level playing field across competitions.

A compensation battle may only just be beginning

Much of the public conversation has understandably focused on possible sanctions. Points deductions, transfer restrictions, and even expulsion from competitions have all been widely discussed. Yet one of the most commercially significant consequences may arise elsewhere.

The Premier League’s disciplinary framework contains provisions permitting compensation awards against clubs found to have breached league rules. Those provisions potentially allow claims from clubs that can establish they suffered financial loss as a result of proven breaches. The scale of potential exposure could be substantial.

A club that narrowly missed a league title, qualification for the UEFA Champions League, or European competition generally by only a small margin might justifiably seek to argue that compliance with the rules would have produced a different sporting outcome. Those clubs may then seek compensation for lost prize money, broadcasting revenue, sponsorship income, commercial opportunities and associated financial losses that would have accrued to them but for the breach.

Such claims in the civil courts would face not insignificant evidential hurdles. Establishing that an alleged sporting advantage directly caused a particular financial loss would be a complex exercise involving issues of causation, probability and quantum. Football seasons are influenced by countless variables, and the courts are traditionally cautious when asked to speculate on hypothetical outcomes. The commission has tended to take a more pragmatic approach, and has awarded compensation to clubs affected by a breach of rules by a competitor on the basis of a realistic assessment of what might have happened had a club complied with the rules, and the losses suffered by the competitor club most closely affected by their failure to do so (Burnley Football & Athletic v Everton Football Club Company Limited).

Manchester City’s appeal will be heard by an appeal board comprised of three new members, separate from those on the independent commission. Under the Premier League’s rules, which may be varied by agreement, the appeal is to be heard within 12 weeks of being made, with a decision expected within 30 days thereafter. The commission may, in the meantime, also determine the sanctions that may apply in relation to the findings. The appeal is the final limb of the disciplinary process, short of a party taking it to the public courts. In terms of seeking to minimise harm to the integrity of the sport, the timing of the current season will clearly be a material consideration here. Therefore, following the commission’s findings and subject to the outcome of the appeal, one might expect that the focus of any future dispute may shift away from proving that breaches occurred and towards proving what losses flowed from them.

A lesson in governance rather than football

For organisations outside professional sport, the most important aspect of the decision may have little to do with football at all.

Increasingly, regulators are focused not only on whether wrongdoing has occurred but on whether adequate systems and controls existed to prevent it from occurring in the first place.

This trend is reflected across multiple sectors and is perhaps best illustrated by the UK’s new corporate offence of failure to prevent fraud under the Economic Crime and Corporate Transparency Act 2023. Since September 2025, large organisations have faced potential liability where an associated person commits fraud intended to benefit the organisation, unless the organisation can demonstrate that it had reasonable procedures in place designed to prevent such conduct. Those procedures include risk assessments, board-level engagement, due diligence processes, training, monitoring and ongoing review.

Although football clubs are subject to a distinct regulatory regime, the underlying principles are strikingly similar. Organisations are increasingly expected to create compliance cultures that prioritise transparency, accountability and robust internal controls. The question is no longer simply whether a rule has been breached. Regulators are increasingly asking whether reasonable steps were taken to prevent misconduct arising in the first place.

Reputational consequences can outlast legal proceedings

One of the clearest lessons from the Manchester City proceedings is that regulatory investigations can carry consequences long before any final sanction is imposed. The underlying allegations have been investigated, debated and litigated for several years. During that period, the matter has generated significant scrutiny from supporters, commercial partners, regulators, the media and the wider football community.

Looking ahead

The Manchester City proceedings remain ongoing and any sanctions, appeals or compensation claims will take time to unfold. However, regardless of the ultimate outcome, the case is likely to become a landmark in sports regulation.

From a broader legal and commercial perspective, the case provides a powerful reminder that regulatory compliance is no longer concerned solely with avoiding punishment. Modern regulators increasingly expect organisations to demonstrate proactive compliance, robust governance and effective internal controls. Where those systems fail, the consequences may extend far beyond cards, fines and disciplinary action into compensation claims, reputational damage and litigation.