Section E of the commission’s decision details how City’s owners, the Abu Dhabi United Group (ADUG), were accused by the Premier League of inflating £949.94m worth of sponsorship deals by £830.69m between 2009-10 to 2017-18.
That would leave just £119.25m of the deals paid by actual sponsors from Abu Dhabi [AD].
The commission’s decision includes a section headlined ‘The Disguised Funding Scheme’ which outlines how shareholder funding would be paid by owners ADUG as ‘commercial partner revenue’ in order to meet financial rules. It says that the £830.69m should actually have been recorded in the club’s annual financial statements as equity contributions from ADUG. By using the ‘Disguised Funding Scheme’ for the 2009-10 season, City were said to have avoided “breaking the record for the largest single season loss in [Premier League] history”. This loss could have seen City fail financial fair play regulations at the time.
The Premier League’s case, and outlined from page 16 of the decision, had been that the sponsors were liable to pay just a fraction of the recorded sponsorship fee.
It was argued by the Premier League that “each of those AD Sponsorship Agreements were (as a matter of law) shams and/or arrangements whose economic substance was very different to the appearance given in the AD Sponsorship Agreements themselves”.
City contended that Abu Dhabi Sponsors had sometimes applied for financial assistance from the Abu Dhabi Government towards their liability and that such applications had been granted, with financial assistance provided to the sponsors by the Government via the Crown Prince Court of Abu Dhabi.
Page 21 of the commission’s findings details how the explanation was rejected. Page 22 then says that “AD Sponsorship Agreements were shams and/or did not reflect the economic substance of the arrangements that the Club in fact had with its AD Sponsors”.
