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Why it could be now or never for Pep Guardiola to win Champions League with Manchester City

‘Champions of Europe/You’ll never sing that,’ echoed around Stamford Bridge at the weekend as Manchester City fell to their first Premier League defeat of the season. After all, it’s traditional for arrivistes among the Premier League superpowers to be taunted for their lack of history, a point that surely won’t be lost on Chelsea fans now that they are filling the role of Liverpool supporters, who were once so aghast at the threat of being surpassed by newly-enriched Chelsea.

Still, even as the Chelsea fans gloried in their deserved victory on Saturday and their membership of a historic club which City can’t join at present, part of what inspires those chants is the fear that City will actually sweep all before them.

Chelsea manager Maurizio Sarri described City as the ‘best team in Europe’ after the game and few could make a stronger case over the past three months: Barcelona and Juventus might but Real Madrid and Bayern Munich couldn’t on the basis of current form. (Obviously second-half-of-the-season Real Madrid might be a different proposition).

Pep Guardiola has Europe seemingly at his feet with Manchester City – but that could change

On Wednesday against Hoffenheim, City can take it easy; they have at least made qualifying for the last 16 a formality, even if the real tests lie ahead. But collecting the big trophy some day seems inevitable for City and Pep Guardiola: they have the A-list coach, the awe-inspiring squad and the demand for it from the owners. Rather like Chelsea did. Sooner or later money gets what money wants.

Yet it may not be quite so simple. At the start of the season we highlighted how even with a combined net spend of £1billion over the last four years, City and Paris Saint-Germain have managed just one Champions League semi-final between them since 2014, and that a damp squib of a contest City never looked like winning; Real Madrid, despite their profligate reputation, have actually made a net profit of £21million on transfers in the same time and have won the trophy four times in those five years. So history still matters.

That said, City surely will be at least semi-finalists this year? The balance and maturity of the squad would suggest that they are heading for the latter stages. The sting in the tail for Guardiola is that this may be his best chance. After this year, it looks as though it will get an awful lot harder. Among the weekend’s stories was one suggesting that City were baulking at the £66m fee that Ajax were asking for Frenkie de Jong and had gone cold on the deal. Ajax believe it is because City aren’t yet sure that they will be spending that kind of the money this summer. Which is curious, when money has previously been no object.

Also last week respected French newspaper L’Equipe reported that PSG were preparing to sell either Neymar or Kylian Mbappe in a bid to avoid a UEFA Financial Fair Play penalty. (PSG are so angry about the story that they are banning L’Equipe from asking questions at press conferences.)

Sponsorship deals involving owner Sheikh Mansour's (right) companies are under scrutiny 

Sponsorship deals involving owner Sheikh Mansour’s (right) companies are under scrutiny 

The two stories are of course related. UEFA president Aleksander Ceferin’s intervention last week, indicating that there was a ‘concrete case’ of a breach of Financial Fair Play rules by City and that there would be an outcome ‘very soon’, has changed the game. And Ceferin insisted that he wasn’t just relying on the leaked emails revealed by Der Speigel, which uncovered the ruses City seem to have applied to get around UEFA’s rules. (PSG already have a current case of a potential breach under investigation.)

WHAT ARE UEFA’S FINANCIAL FAIR PLAY (FFP) RULES? 

Financial Fair Play was approved by UEFA in 2010 and first brought into play in 2011. It ensures that clubs who have qualified for UEFA competitions must prove they do not have overdue payables towards other clubs, their players and tax authorities throughout the season.

In short, clubs can spend up to €5m (£3.9m) more than they earn per assessment period, although total losses of £35m are permitted for clubs like City with the wealthiest of owners.

Assessments are now made over a three-year period. In 2014-15, losses were still be limited to £35m. In 2015-16, the limit dropped to £25.5m. The pattern was then repeated in 2016-17 and 2017-18.

Money spent on stadiums, training facilities, youth development or community projects is exempt, but clubs must balance ‘football-related expenditure’ – things like transfers and wages – with television and ticket income.

All of this is overseen by The Club Financial Control Body (CFCB), which was set up by UEFA.

Seemingly the most-damning City email (though there were several) was the one sent in 2015 by chief financial officer Jorge Chumillas to board member Simon Pearce. That year, City’s core sponsor, Etihad, chipped in £67.5m. Chumillas wrote: ‘Please note that out of those £67.5m, £8m should be funded directly by Etihad and £59.5 by ADUG [Abu Dhabi United Group, the holding company owned by Man City’s owner, Sheik Mansour].’

Guardiola says City chairman Khaldoon Al Mubarak has assured him City won’t be banned. And maybe he’s right. A ban would be a nuclear option. But even if they avoid a ban, it seems pretty likely that the best-case scenario still means the club would be subject to severe financial restrictions.

Going forward, it is now unlikely that UEFA will accept that the value of that sponsorship is actually worth £67.5m a year. Another of City’s current sponsors, a UAE investment firm called Aabar, was paying £15m to City but only £3m came from the company, according to emails. City sponsors with links to Abu Dhabi include Etisalat, Visit Abu Dhabi, Healthpoint, First Gulf.

UEFA’s Club Financial Control body has the right to challenge what is the fair value for any sponsorship deal – this is what is happening to Paris St Germain’s sponsorships deal at present. They previously slashed PSG’s valuation of their deal with the Qatar Tourism Authority, claiming it was inflated. City can expect all these deals to come under scrutiny and if necessary re-valued.

As such, it is unlikely City will be allowed to operate at their current budget with a wage bill of £259.6m for the next few years. Cutbacks seemed inevitable. The days of simply spending £128m to fill the gaping hole in the full back positions in your squad look like they may be over. 

City could even have to sell the likes of Bernardo Silva (centre) if punished by UEFA over FFP

City could even have to sell the likes of Bernardo Silva (centre) if punished by UEFA over FFP

If punished, City would have to economise to meet UEFA’s rules. One option would be to sell squad players such as Ilkay Gundogan, Danilo, maybe even the likes of Bernardo Silva. So this could be very good news for Phil Foden. But Vincent Kompany might have to forget about his playing contract being renewed this summer.

It is commonly argued that that Financial Fair Play rules would crumble under legal challenge. The retort to that would be that if City were so confident, they would have tried this in 2014 when UEFA fined City £49m for their initial breach of Financial Fair Play regulations.

The first hurdle would be to get the Court of Arbitration for Sport to do that; but they have already thrown out that argument when Galatasary tried it after being banned from the 2016-17 Europa League. CAS upheld the ban saying that UEFA’s rules are in line with the European Court of Justice.

City could go straight to the ECJ for a ground-breaking judgment but would then be up against the entire football governing establishment. And before setting up Financial Fair Play, UEFA went to the trouble of negotiating with the European Commission, the law-making body of the European Union, that sport could have exemptions from certain rules in specific cases as long as it was pre agreed.

It has been speculated that PSG might have to sell either Kylian Mbappe or Neymar due to FFP

It has been speculated that PSG might have to sell either Kylian Mbappe or Neymar due to FFP

Of course, if UEFA go nuclear and ban City from the Champions League, as they tried to with AC Milan and the Europa League this season, they would put a further dent in City’s revenues, making it harder for them to recruit players and maintain the current squad. Last season City earned £54.6m from Champions League TV money alone and they would lose match-day income and possibly some sponsorship income as well.

The good news for City is that AC Milan got their ban from the Europa League overturned in CAS. The bad news for City is that CAS backed the Club Financial Panel’s Adjudicatory Chamber’s authority in the matter. In summary, it ruled that a ban was disproportionate in that case but underlined its right to do so in the future.

Ultimately, AC Milan got off because it was a first-time offence and because clubs like City and PSG had previously been allowed financial settlements in similar circumstances. That argument won’t be open to City this time around.

Whatever transpires, it’s hard to see a scenario where City simply carry on as before. At City, you would imagine all eyes are on the Wanda Metroplitano and June 1. It looks like being Pep Guardiola’s best chance.

 

Read more at DailyMail.co.uk