European Commission turns up the heat on Manchester City to play fair

Uefa and the Commission’s competition department released a joint statement on Wednesday expressing several “concerns” relating to the financial framework of the club game. The statement focused on the compatibility of state aid with European policy and the new Financial Fair Play [FFP] rules Uefa is introducing for clubs in its competitions.

In a letter to Uefa’s president, Michel Platini, the Commission’s competition commissioner, Joaquín Almunia, wrote: “The European Commission has expressed concerns that clubs in the short term pay inflated transfer fees and wages for players, even when their true financial position should not allow them to do so, thus gaining an advantage on the field.

“In my view, such policy seems particularly unjustified in the context of the current economic downturn where austerity measures are being introduced in all member states.

“Against this background, I consider of paramount importance to fully support the objectives of the FFP, recognising the value of robust licensing systems, including cost-control mechanisms, to promote good governance in sport.

“The central objective of FFP [namely to ‘live within your means’ or ‘break even’] ensures prudent economic management that will serve to protect both the interests of individual clubs and players as well as the football sector in Europe as a whole.”

Neither the Commission nor Uefa would comment on individual cases. But it is clear City are chief among the clubs who are sustained only by shareholder support, without which they would be hopelessly insolvent.

Last November, Manchester City announced an annual loss in the 12 months to May 31, 2011, of £197 million. It meant the club’s Abu Dhabi owners had plunged £800 million into the club since taking over in 2008. While this has transformed City into title contenders, one of Uefa’s concerns relates to the way such investments distort competitive balance.

Platini wrote in his response to Almunia: “The current economic climate requires, now more than ever, strong financial discipline and prudent economic management in order to secure a healthy and competitive football sector in Europe. There is, in my opinion, no more important subject for the future health of European football than the effective implementation of Financial Fair Play.”

City did not respond to a request to comment on the statement and accompanying correspondence. But there is a strong view within the Premier League that its most extravagant clubs are not alone in Europe in drawing succour from outside sources.

Famously, Real Madrid sold their training ground to the local authority, receiving hundreds of millions of pounds to spend on team strengthening.