Chelsea vs Manchester City: why their financial cases are not the same

With Manchester City confirmed guilty of all 115 charges brought against them by the Premier League, many have wondered how Chelsea were able to “get away” with their crimes without major consequences for the club, such as a points deduction, relegation, or a transfer window ban.  To understand this, you have to realise these two cases are similar because they broke financial rules, but they differ greatly in scale and impact.

Chelsea were found to have broken rules relating to remuneration payments and financial disclosures, while City charges centred on systematic financial breaches. Chelsea used unlicensed intermediaries, failed to declare certain agent commissions and payments accurately, and allowed third parties to hold economic interests in players. The offences occurred between 2011 and 2018, while Manchester City's span was from 2009 to 2018, so two years longer. Chelsea's total illegal agent payments totalled around £47 million, with the players connected in this period including Eden Hazard, Ramires, and Willian. 

The City's “sham contracts” artificially inflated commercial revenues and disguised owner funding. City inflated their financial position and made it seem they earned more so they could spend more, as Profitability and Sustainability Rules state that a club's overall profit is calculated by including all revenue and costs, but only allows allowable losses of up to £5 million per season. City lied about their profits to spend more and bring in more players. They inflated their revenue by more than “£830 million to £900 million”, and when the league wanted to investigate, City failed to cooperate, adding another charge they have been found guilty of.

Chelsea’s £47m of undisclosed payments were serious rule breaches. Still, the source says that even if the payments had been included in Chelsea’s financial figures, the club still would not have breached PSR or FFP during the relevant periods. Chelsea’s offences related to agents, payment declarations and third-party interests rather than exceeding permitted financial-loss limits.

Manchester City, by contrast, were found to have breached PSR between 2015 and 2018, alongside other financial and reporting offences. Manchester City's financial misgivings were 19 times Chelsea's.

While both clubs concealed their financial issues, Chelsea's were not concealed to make the club appear financially stronger, while City's involved commercial arrangements that allegedly inflated the club's reported revenue. They did this by creating illegitimate sponsorship contracts connected to Abu Dhabi sponsors to misrepresent the club's financial position and make it look better than it was.

A big difference was the club's response to the investigations. While Clearlake reviewed Chelsea's books, they found financial discrepancies and reduced their offer by the difference, setting it aside to pay any fine. After taking over, Chelsea reported the issues to regulators, provided extensive documentation (around 200,000 documents), and continued to support the investigation they self-reported. While their self-reporting does not excuse Chelsea's prior behaviour, their cooperation helps show the differences between the cases, especially as Chelsea explicitly states they were not innocent and took responsibility for the offences committed.

City contested the allegations and fought the investigation for several years, which led to their conviction on 35 charges of failing to cooperate, including failures to provide documents and financial information.

For Chelsea, all these offences occurred during the Roman Abramovich era, not under the new owners of Clearlake, so it would be unfortunate to punish them significantly for the previous owners' misgivings, especially as they did the right thing by reporting the historical irregularities.

This explains and helps justify the outcome and punishment Chelsea received: a £10.75 million fine by the Premier League, £10 million by the FA, and a suspended one-year first-team transfer ban, meaning that if they commit such crimes in a year, the punishment is imposed; they will receive a transfer ban. There was no points deduction or stripping of historical titles.

While an independent commission found City guilty on all 115 charges, the club intends to appeal; given the magnitude, amount, and severity of the crimes, the potential punishment could be endless. Many are debating whether a large fine would be enough, but it would not be comparable and would be seen as a slap on the wrist, rather than a points deduction, relegation, or other sporting sanctions.

Both teams had major success during the periods in which the crimes were committed. Chelsea have seven major trophies, including two Premier Leagues and a Champions League. Before the illegal acts took place, the club had won 13 trophies, including six since 2018, when the crimes stopped. The Blues won five trophies in the previous seven years, including two European trophies between Abramovich buying the club and becoming a big team in Europe and the league. In contrast, before the current owners took over in 2008, they had not won a trophy since 1970 and had not played in European competition. This suggests that City's modern success is more closely connected to the current ownership and the timeline of when the crimes were committed.

Rodri’s defence that “What we did, they cannot take out of us” and “everything was deserved” focuses on the players’ performances, but it does not address how the team was built. Nobody is saying the players did not earn their results on the pitch. The issue is whether City’s alleged financial manipulation gave them greater financial capacity to assemble and maintain an elite squad. Chelsea’s £47m of undisclosed payments were different because, even if included, they did not put Chelsea outside the relevant PSR/FFP limits. So Rodri can defend what the players achieved on the pitch, but that doesn't answer whether the financial advantage helped build the team that achieved it. 

Ultimately, to compare these two cases is like comparing Spurs and Real Madrid trophy cabinets. It's not comparable or similar in any way. While both involved financial issues and breaking rules, the severity of the rules City broke systematic manipulation of commercial revenues, PSR breaches and extensive failures to cooperate is far more concerning, larger and more impactful.