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Man City, PSG Pay Record $82 Million Fine For Rule Breach

Paris Saint-Germain and Manchester City were each fined a record 60 million euros ($82 million) for breaching financial rules imposed on teams competing in European soccer tournaments.

The French and English league champions will also each forfeit 10 million euros in earnings from next season’s Champions League as part of the sanctions imposed by UEFA. The clubs may get 40 million euros back should they fulfill “operational and financial measures” agreed with UEFA.

The European ruling body’s financial rules aim to reverse a trend of clubs spending beyond their means on player transfers and salaries to chase trophies and prize money. City and PSG were among nine teams that agreed on settlements for breaking rules that prohibit them from spending more than they earn.

“In normal circumstances, the club would wish to pursue its case and present its position through every avenue of recourse,” City said in a statement on its website. “However, our decision to do so must be balanced against the practical realities for our fans, for our partners and in the interests of the commercial operations of the club.”

The purchase of elite clubs by sovereign wealth funds or billionaires has caused a surge in spending in European soccer. Sheikh Mansour bin Zayed Al Nahyan owns Manchester City and the Qatar Investment Authority controls Paris Saint-Germain.

Squad Cuts

City and PSG have also been ordered to reduce their Champions League squads to 21 players from 23 next season and have been limited to spending 60 million euros on new players this off season.

“Paris Saint-Germain has taken the decision to accept the measures imposed on it, in spite of the tremendous handicap they represent in terms of the club’s ability to fully compete on an equal footing against Europe’s biggest teams,” the French champion said in an e-mailed news release.

Under UEFA rules, clubs can’t lose more than 5 million euros a season unless shareholders cover the amount. The maximum covered loss over the past two seasons was 45 million euros.

Manchester City had an accumulated loss of 174.7 million pounds over the past two seasons, according to a filing at Companies House in London.

In France’s Ligue 1, Paris Saint-Germain may have offset its losses with a sponsorship deal from the Qatari state tourism authority, which is worth about 200 million euros a year, according to Le Parisien.

Settlement Procedure

UEFA allows clubs to deduct wages of players signed before June 2010 along with items such as training and stadium investment costs.

In February, UEFA announced it would allow a procedure for teams to settle cases outside the disciplinary process. UEFA General Secretary Gianni Infantino told reporters at the time that its intention is “to bring clubs on the right way rather than to punish them.”

Teams can appeal the sanctions in June and take their case to sport’s highest tribunal, the Lausanne, Switzerland-based Court of Arbitration for Sport, in July and August.

Nyon, Switzerland-based UEFA is looking to trim costs as other European sports authorities have backed away from the challenge. The Paris-based Federation Internationale de l’Automobile has twice dropped plans for a cap on Formula One spending since 2009 amid team opposition.

Soccer’s new rules helped to cut club debt by 35 percent to 1.1 billion euros in 2012, from 1.7 billion euros a year earlier, UEFA said last year.

Turkish clubs Bursaspor, Trabzonspor and Galatasaray have also agreed settlements, as have Russia’s Anzhi Makhachkala, FC Zenit, Rubin Kazan and Bulgaria’s Levski Sofia.

To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.net

To contact the editors responsible for this story: Christopher Elser at celser@bloomberg.net Peter-Joseph Hegarty

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