The authoritative Swiss Ramble gives his take on Manchester City's ban from Uefa competitions and its likely financial impact. He comments, 'On the face of it, the emails leaked to Der Spiegel are damning, as they appear to show that City sponsorship was mostly funded by the owners, Abu Dhabi United Group, e.g. £57m of the £65m agreement with state airline Etihad, £12m of Aabar £15m deal. FFP limits owner funding.'

The importance of commercial income (and Abu Dhabi sponsors) to City is evident. It has grown by over £200m in the last 10 years from £18m to £230m, more than any other English club, and accounted for as much as 53% of total revenue in 2013.

In the early years under Sheikh Mansour’s ownership, City incurred many significant losses, culminating in a £197m deficit in 2011, due to heavy spending to build a competitive squad. However, figures have steadily improved with the club reporting profits in the last five years.

Missing out on the Champions League would hit City hard financially. The amount obviously depends on how far City progress, but reaching the quarter-finals in 2018/19 was worth £86m, up from £55m the previous season, thanks to a new TV deal. Incidentally, the club's earnings were restricted by the introduction of a new UEFA coefficient payment (based on performances over 10 years), as they received €24m for this element, compared to their neighbours Manchester United, who received €31m based on former glories.

To further illustrate the importance of the Champions League to City, this has provided them with a clear financial advantage over other English clubs. In the last five years, City earned €337m from Europe, way ahead of Liverpool €264m, Tottenham Hotspur €236m, Arsenal €231m, Manchester United and Chelsea both €220m.

It is also likely City sponsorship deals include performance-related clauses, so payment is reduced if do not play in the Champions League, e.g. the United Adidas deal is cut by 30% if they do not qualify for Champions League for two years in a row. If we assume 10% impact, City revenue would be £23m lower.

On the other hand, City have new commercial deals: kit supplier Puma £65m is a £45m increase on Nike £20m; while there is an 'eight-figure' training kit deal with Marathonbet worth a minimum of £10m. The club is also reportedly reviewing replacements for Etihad shirt sponsorship. Similarly, City will benefit from the new Premier League TV deal, especially the change that any increase in overseas rights will be distributed based on where clubs finish in the league. This is estimated to increase City’s distribution by around £20m.

Based on the Swiss Ramble's assumptions, City revenue would fall £119m a year (22% of their total) due to the UEFA ban, though this would be offset by £75m revenue growth, giving a net decrease of £44m. The two-year ban would therefore cut City revenue by gross £238m, but 'only' £88m net.

In theory, this could be offset by a reduction in the wage bill, as players would not receive bonus payments linked to Champions League qualification. However, it is possible that their agents would argue that the ban was not the players’ fault, so these would be paid anyway.

City will point to other cases where UEFA were more lenient, especially PSG, where the organisation ultimately sided with the French club’s appeal to the Court for the Arbitration of Sport, despite clear similarities with City, i.e. allegedly overstating sponsorships, as commercial income rose €222m in seven years.

Similarly, CAS told UEFA that Milan’s two-year ban was not proportionate and they had not properly assessed some 'important elements', resulting in the ban being halved to one year. It is worth noting that Milan have accumulated €543m of losses in the last six years. Last February CAS also ruled in favour of Galatasaray, who had objected to a decision by UEFA to re-open a FFP investigation, though this appears to be more of a technicality, i.e. UEFA had failed to review the case within the prescribed timeline.

The Swiss Ramble notes that PSG’s deal with the Qatar Tourist Authority for a 'publicity campaign' was reportedly worth €200m a year, despite a much lower independent valuation. Either way, PSG’s €381m commercial income in 2018 was more than all the other Ligue 1 clubs combined. 'PSG president Nasser al-Khelaifi also sits on UEFA’s Executive Committee and is the chairman of beIN Media, who have heavily invested in TV rights. An influential man then, but less happily, he had to agree a financial settlement with FIFA before they dropped a bribery complaint.'

'There has clearly been some “creative accounting” at City, who transferred some staff to City Football Group, reducing wages from £233m in 2013 to £205m in 2014. This is a perfectly normal business practice, but rare in the world of football.'

My personal view is that Uefa were determined to make an example of a club and City happened to fit the bill. The more general point is that the legal foundations of FFP are shaky. CAS may be prepared to reduce City's ban to one year, but that will not satisfy the club. It is very likely that this issue will go to the Swiss Supreme Court and ultimately to the European Court of Justice on the grounds that FFP is in conflict with competition law.