A former financial advisor to Manchester City says Chelsea‘s punishment from the Premier League will give ‘very useful precedent for City in their worst case scenario’ of their 115 rule-break charges case.
Stefan Borson, who advised City whilst a banker at Investec between 2002 and 2007, says Chelsea’s record-breaking fine of £10.75million, a nine-month academy transfer ban and a suspended year-long first-team transfer ban are ‘extremely lenient’ punishments from the Premier League.
Chelsea have accepted the historical charges, with their owners having self-reported issues spotted from under the previous regime of Roman Abramovich including ‘undisclosed payments by third parties associated with the club made to players, unregistered agents and other third parties.’
‘Extremely lenient settlement with the Premier League,’ Borson wrote.
‘Serious questions about the PL’s approach. Not once does ‘sporting advantage’ appear in the sanction agreement despite the acquisition of numerous players in competitive situations.
‘Very useful precedent for City in their worst case scenario.’
Former Manchester City financial advisor Stefan Borson says Chelsea’s punishment is soft
City still have their 115 charges hanging over them – but Borson sees positive signs
‘Points deduction deemed ‘not appropriate’ due to the mitigating factors. Again a very favourable outcome for Chelsea.
‘The usual approach is that mitigation reduces the already established sanction i.e. discounts the points amount.’
It has been eight years after the allegations of financial wrongdoing against Man City came to light.
City were handed 115 charges after a four-year investigation and the Premier League allege that the club breached PSR rules by disguising payments from ownership as sponsorship and giving undeclared salary or bonuses to players and managers.
The hearing into the case ended more than a year ago but there remains no sign of a judgment, with City maintaining their innocence and the football world awaiting an outcome.
Chelsea’s £10.75million fine and other sanctions come after the club’s current owners BlueCo voluntarily self-reported their financial irregularities to the footballing authorities, having discovered them while doing their due diligence amid their May 2022 takeover.
Occurring under the Roman Abramovich regime, the Premier League’s investigation found that between 2011 and 2018, undisclosed payments by third parties associated with the club were made to players, unlicensed agents and other individuals. It previously emerged that their signings of Eden Hazard, Samuel Eto’o and Willian were among those transfers investigated.
Crucially, the Premier League found Chelsea would not have breached their PSR rules during the relevant periods, had those in charge of the club at the time reported these payments legitimately rather than try to hide them.
Chelsea’s £10.75m fine beats the Premier League’s previous record of £5.5m issued to West Ham in 2007. The Blues will also pay the full costs of the league’s investigation and disciplinary processes.
Chelsea co-owners Todd Boehly and Behdad Eghbali self-reported to the Premier League
Chelsea said in a statement: ‘During an extensive Premier League investigation, the club proactively disclosed many thousands of documents. Also, when requests for information were made by the Premier League, the club promptly provided comprehensive responses and facilitated all lines of inquiry to support a complex and extremely thorough process.
‘Furthermore, during the investigation, additional evidence was provided to the club by a third party regarding potential breaches of Premier League rules committed by a former employee in a small number of historical academy transactions. This information was immediately and proactively self-reported to the Premier League.
‘The club wishes to make clear that following robust financial analysis by the Premier League, it was concluded that “in no scenario would the club have exceeded the maximum allowable loss of £105 million over the three-year assessment period in the rules.”
‘Accordingly there is no scenario in which the club could have been in breach of the applicable limits in the Premier League’s Profitability and Sustainability Rules during the applicable seasons historically.
‘From the outset of this process, the club has treated these matters with the utmost seriousness, providing full cooperation to all relevant regulators. The club welcomes the recognition from the Premier League of its “exceptional cooperation” and that “without those voluntary disclosures and the act of self-reporting, a number of the Premier League rule breaches may never have come to the attention of the league”.’
Chelsea added: ‘We are pleased that the matter is now concluded.’