Man City Faces EU Investigation Over Financial Rule Violations: La Liga President Tebas Takes Action

La Liga president Javier Tebas has formally reported Manchester City to the European Commission, alleging significant breaches of financial rules related to state-owned companies. Tebas made the announcement at the FT Business of Football Summit, stating that the complaint was filed in 2023 and is now under investigation by the European Commission.

Key Allegations

Tebas claims that Manchester City has structured its operations to circumvent financial rules, particularly through a network of companies outside the City Football Group (CFG) in the United Arab Emirates. He argues that this structure provides the club with an unfair competitive advantage in both domestic and European competitions.

Financial Transparency

"City have a lot of companies in their group which lie outside the City Football Group structure, extra companies where they put their expenses," Tebas said. He added that these companies absorb financial losses, shielding the club itself from such liabilities. "We have the facts and figures," he emphasized, advocating for stricter financial transparency across all clubs.

Legal Context

The complaint was made under the Foreign Subsidies Regulation, which came into effect on July 12, 2023. This regulation empowers the EU to investigate state-controlled foreign subsidies that may distort competition within the European market.

City’s Response

Manchester City has declined to comment on the allegations. However, sources close to the club have dismissed Tebas’ claims, pointing to the club’s publicly available financial records as evidence of compliance with all regulations.

Ongoing Challenges

This is not the first time Manchester City has faced scrutiny over financial practices. The club is currently awaiting the outcome of a hearing related to 115 charges of Premier League financial rule violations. If found guilty, the club could face severe penalties, including a points deduction or relegation.

Historical Context

In 2022, La Liga filed a similar complaint with UEFA regarding what it termed "irregular financing" at Manchester City and Paris St-Germain. Tebas has consistently criticized both clubs, labeling them as "state clubs" benefiting from external financial support.

The European Commission has yet to comment on the ongoing investigation, but the case highlights growing tensions over financial fairness in European football.