German newspaper Der Spiegel released leaked documents, including emails allegedly exchanged among top Manchester City executives, some of whom still work at the City Football Group. These documents suggested the club inflated sponsorship revenue from state-owned entities such as Etihad and Etisalat by masking direct investments from their holding company, Abu Dhabi United Group (ADUG), as sponsorship income. This method purportedly enabled City to comply with Financial Fair Play (FFP) regulations introduced by UEFA in 2011 and Profitability and Sustainability Rules (PSR) enacted by the Premier League in 2012, which limit allowable club losses.
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Further allegations arose regarding financial misreporting, with documents claiming that secret 'off-the-books' payments were made to former manager Roberto Mancini through consultancy fees from an Abu Dhabi-based club. Additional accusations indicated that players received more compensation than officially recorded, resulting in understated spending.
City has consistently stated that ADUG is a private fund, not a state apparatus, and they rejected the validity of the leaked emails, labeling them as illegal and an attempt to tarnish the club's reputation. Despite these denials, UEFA and the Premier League initiated investigations, responding to the claims.
The timeline of events includes several key moments: in November 2018, allegations emerged through Der Spiegel regarding Manchester City's potential FFP violations. By March 2019, UEFA began a formal investigation, which prompted City to criticize the process and file an appeal in May 2019. The Court of Arbitration for Sport (CAS) deemed this appeal inadmissible in November 2019.
In February 2020, UEFA handed City a two-year ban from European competitions and a €30 million fine, which was later overturned in July 2020 following an appeal to CAS. However, in July 2021, City lost a jurisdiction ruling allowing media to report on the ongoing Premier League investigation into the club's financial practices.
By April 2022, Der Spiegel reported that the Premier League had been conducting a three-year investigation, detailing its findings. This culminated in February 2023 when the Premier League charged City with 115 financial breaches. Currently, a 10-week hearing is set to begin in September 2024 regarding these charges. City manager Pep Guardiola noted that a verdict is expected in February 2025, while reports in September 2026 suggested that City had been found guilty of a majority of the charges.