Manchester City face potential £800m damages claim as rivals prepare legal action

Manchester City could face a bill of more than £800m if rival clubs pursue compensation after the Premier League published a 40-page legal document detailing allegations that the club breached spending rules.

Arsenal, Manchester United, Liverpool and Tottenham have already reserved the right to sue by issuing legal notices beyond the expiry of the statute of limitations. Other clubs are also understood to be considering action, with the possibility that several could join a collective claim.

The Premier League case accuses City of using “sham” contracts, inflating deals worth £900m and engaging in “widespread” deception. The fraud allegations could allow clubs to pursue claims covering an earlier period.

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Potential damages could relate to clubs missing out on Champions League qualification, European football or commercial opportunities. Relegated sides could also argue they would have survived in 18th place had the Premier League acted sooner.

Sports barrister Yasin Patel, of Church Court Chambers, said: “Four teams have stated they will take legal action but other teams are likely to follow suit.

“In 2013-2014 and 2014-2015, Norwich and Hull finished 18th respectively. They could argue that, had the Premier League taken action, they may not have been relegated. This is a complex argument, but it illustrates how some clubs may seek compensation.

“If these two clubs were to make this argument, it could be said that Manchester City should not have to pay both as only one could possibly have benefitted had City been ultimately relegated.

“The clubs would have to prove that Man City’s alleged actions caused them to ultimately suffer losses due to relegation and the financial implications that followed.

“It would probably be easier for teams who were relegated to make this argument collectively rather than individually.”

Patel said clubs could also pursue the Premier League, arguing that a faster investigation and hearing would have prevented Manchester City from continuing the alleged breaches.

He added that clubs denied European football could also seek compensation. That could include teams who missed out because City occupied a Champions League place, as well as sides who failed to qualify after losing cup competitions.

“In 2010-2011 and 2018-2019 this was Wigan and Watford: they too may seek compensation,” Patel said.

Arsenal, Manchester United, Liverpool and Tottenham could each claim about £200m in damages linked to lost sporting success, commercial deals and Champions League qualification.

The total compensation could be significantly higher than in previous individual cases. Everton were ordered to pay Burnley £35m after Burnley were relegated following Everton’s breach of the Premier League’s Profit & Sustainability Rules.

“The appeal is due to be heard in January,” Patel said. “But that involves just one club. If we have 10 to 15 clubs seeking compensation, Manchester City could be looking at paying vast sums to other clubs in addition to all the legal costs that could follow.”