Manchester City have been banned from the Champions League for the next two seasons for "serious breaches" of UEFA's financial fair play regulations.

The Premier League champions will be barred from competing in UEFA club competitions and fined €30m (£24.9m), European football's governing body announced.

UEFA said Manchester City had overstated sponsorship revenue in accounts submitted between 2012 and 2016, and had "failed to co-operate" in the investigation.

Its regulations state a club's outgoings must not be much higher than its earnings.

A Manchester City statement said it was "disappointed but not surprised".


"In December 2018, the UEFA chief investigator publicly previewed the outcome and sanction he intended to be delivered to Manchester City, before any investigation had even begun," it said.

Image: Manchester City deny claims they tried to cheat the financial fair play rules

"The subsequent flawed and consistently leaked UEFA process he oversaw has meant that there was little doubt in the result that he would deliver."

The club added: "Simply put, this is a case initiated by UEFA, prosecuted by UEFA and judged by UEFA."

Manchester City are set to appeal to the Court of Arbitration for Sport (CAS).

"With this prejudicial process now over, the club will pursue an impartial judgement as quickly as possible and will therefore, in the first instance, commence proceedings with the Court of Arbitration for Sport at the earliest opportunity," it said.

City are due to face Real Madrid in the final 16 of this season's Champions League, with the first leg to be played on 26 February at the Bernabeu.

If their appeal is unsuccessful, the club will not compete in the competition again until the 2022/23 campaign.

The club were previously punished in 2014 and accepted a settlement that included a £49m fine, a £49m limit on transfer spending for the current season and a 21-man limit on Champions League squad size, instead of the usual 25.

UEFA launched a fresh investigation in March last year following allegations in German newspaper Der Spiegel.

Image: It could affect the future of some of the club's star players like Raheem Sterling

Der Spiegel alleged that Manchester City had been cheating the rules by injecting millions of pounds from its owner Sheikh Mansour into the club via UAE sponsors.

Experts said a number of the sponsorship deals were around three times more profitable than they were actually worth.

Manchester City has maintained that the allegations are "entirely false".

Analysis: City's punishment could have huge implications

By Nick Powell, Sky News sports editor

Manchester City say they are not surprised.

Nonetheless, most in football have been taken aback by the size of the punishment, in particular the two-year ban from the Champions League.

Half that would have been more in line with expectations - and the suspension might yet be cut to that by the CAS.

Reading between the lines of City's statement, one can detect a plan to appeal to higher courts if necessary.

If they fail, the implications are enormous.

Manager Pep Guardiola prides himself on seeing out contracts (his ends in summer 2021). But these are exceptional circumstances.

And the players? England gem Raheem Sterling, Argentinian hotshot Sergio Aguero, Belgian playmaker Kevin de Bruyne - how keen will they be to stay without playing in the world's top club competition?

As for attracting the world's top talent to the Etihad - an excellent recruitment team will be operating with hands tied behind their backs.