Manchester City Faces Fresh Financial Allegations from La Liga President Javier Tebas

Manchester City has once again found itself at the center of financial controversy, with La Liga president Javier Tebas accusing the club of engaging in deceptive financial practices akin to the infamous Enron scandal.

Speaking at the Financial Times Business of Football Summit, Tebas revealed that La Liga filed a formal complaint against City with the European Commission in the summer of 2023, alleging financial misconduct. The complaint is now reportedly under investigation. While City has yet to officially comment, sources within the club strongly deny the allegations.

Tebas claims that City has been utilizing related companies in the United Arab Emirates to obscure financial losses, thereby presenting a healthier financial outlook on paper. Drawing parallels to Enron’s fraudulent accounting practices, he suggested that the club channels significant expenses through affiliated companies that do not fall under the City Football Group umbrella, ensuring that these losses do not appear on the club’s official balance sheet.

“Manchester City has a network of companies outside its formal ownership structure where they place expenses,” Tebas stated. “These businesses incur the losses, while the club itself appears financially stable. It’s a system that resembles what happened in the Enron case.”

The Enron scandal, one of the largest corporate fraud cases in history, involved executives creating a complex web of partnerships to conceal debt and inflate profits, deceiving investors and regulators. Tebas suggested that City employs a similar strategy to sidestep financial regulations, maintaining a competitive edge in the transfer market and securing sponsorship deals that may not align with fair market value.

According to details from La Liga’s complaint, seen by the PA news agency, the league alleges that City’s financial framework distorts the internal market of the European Union. The complaint, filed under EU regulations governing state subsidies, claims that City has received financial backing from the UAE government, which has provided the club with an unfair advantage over competitors.

Tebas further elaborated on the issue, stating, “They have marketing companies, scouting companies—entities where they report significant expenses but invoice City at lower rates. This setup effectively lowers the club’s operational costs, giving them an advantage that other teams cannot match.”

The European Commission has acknowledged receipt of La Liga’s complaint but has not provided further details on the status of the investigation.

This latest development comes as City awaits the outcome of a separate inquiry by an independent Premier League commission. In February 2023, the club was charged with over 100 breaches of Premier League financial regulations, allegations that City has vehemently denied.

Club sources maintain that their accounts are transparent and publicly available, dismissing Tebas’ claims as part of an ongoing campaign against them. City officials have pointed to the club’s financial records as evidence of compliance with all relevant regulations.

This is not the first time La Liga has taken issue with state-backed football clubs. In 2022, the Spanish league filed complaints with UEFA over what it deemed “irregular financing” at both Manchester City and Paris Saint-Germain. Tebas has long been vocal about his opposition to what he describes as “state clubs” operating beyond conventional financial constraints.

With investigations now reportedly underway at both the Premier League and European Commission levels, Manchester City’s financial dealings remain under intense scrutiny. The club’s response, and the eventual rulings from these inquiries, could have significant ramifications for its future in domestic and international football.

Featured Image Credit: Pexels / Yoohaina Edwards, Unsplash / Braden Hopkins