Skip to main content


Financial Doping: when fraud is not treated as fraud?

Update - S
ince the publication of this blog, Manchester City were cleared of breaching the Financial Fair Play rules by the Court of Arbitration for Sport, but fined £10,000,000 for failing to cooperate with the UEFA investigation.


Saracens Rugby Club and Manchester City Football Club are currently the two most successful English teams in their respective sports. Both have recently been found guilty by their regulatory bodies of serious financial breaches.

Saracens are being demoted out of the English rugby premiership and fined £5.36million. This followed an adjudication by the Independent Sports Resolutions Disputes Service (SRDS).  The 106 page judgment can be found here.

Meanwhile, UEFA have fined Manchester City £25million (football being in a different financial orbit) and banned them from the lucrative European Champions League for the next two seasons. Manchester City maintain their innocence and are appealing to the Court of Arbitration for Sport.

Both Saracens and Manchester City were accused of committing what we might loosely term “financial doping”, i.e. cheating the financial rules which are designed to protect the financial probity of elite sports clubs.

Saracens - the wages disguised as investment

In the case of Saracens, the English Rugby Premiership operates a maximum wage cap. Each club is subject to a limit on how much it can pay its squad. That limit is reviewed annually and applies to all Premiership teams. The purpose of a wage cap is to stop a rugby club being exposed to an unmanageable wage bill that it cannot actually afford - particularly in the event that a philanthropic owner realises his pockets are not quite as deep as he once thought. In this way, the wage cap is designed to promote the long term financial stability of the clubs.

Saracens were found to have been 'topping up' the wages of its top players using investment deals amounting to little more than financial gifts and were therefore akin to salary. The club’s owner, Nigel Wray, entered into joint financial ventures with players Billy Vunipola, Mako Vunipola, Maro Itoje, Richard Wigglesworth, and Chris Ashton. All were hugely important players at the club, with the majority still currently playing there. As a result, Saracens were adjudged to have exceeded their salary cap as follows:-

Exceeded by £1.134m in 2016-2017 (total cap was £6.5million)
Exceeded by £98,250 in 2017-2018, (total cap was £7 million)
Exceeded by £960,505 in 2018-2019, (total cap was £6.4million)

These were not small margins, nor insignificant errors of judgment. Mr Andrew Rogers, the club’s Salary Cap Manager concluded that:

“There has been a concerted effort and deliberate attempt to create structures that supposedly take that reward outside the ambit of salary.”

Saracens Rugby Club have won five English Premiership titles and thee European titles in the last nine seasons. They have done so as a direct result of using these devices to avoid the wage cap rules of the Rugby Premiership.  As one BBC journalist put it “That’s a lot of trophies, a lot of laps of honour, a lot of triumphant finals”.  It also means of a lot of second and third place teams feeling rightly cheated out of their legacy.  The Chief Executive of such a rugby club, Exeter, Tony Rowe said in November 2019:-

"They (Saracens) should be relegated. It just leaves a sour taste in your mouth when you go to Twickenham and we just didn’t have enough firepower…. And that’s because we didn’t break the salary cap and pack our squad full of international players”.

Are teams like Exeter simply the victims of bad luck? Or are they victims of a crime?  Is ‘crime’ too strong a word?  If so, why?  The Saracens owner, Mike Wray, conducted personal financial deals which were limited to his team’s best-performing players.  Details can be found here.

Mr Wray said all his investments were purely for financial reasons.  One former Saracens player who benefited, winger Chris Ashton, said much the same about a joint venture to buy his house with the help of a £280,000 'investment' from Mr Wray and a fellow Director.  This was deemed by the panel to be a loan, and not a true investment. Another example was that of lock forward Maro Itoje, a huge star with Saracens and England. Mr Itoje was paid lump sums over three years of £30,000, £30,000, £35,000 by a company based at Saracens which did all the hospitality at their home ground. It was run by Mr Wray's daughter, Lucy Wray. The SRDS Panel noted that there was no evidence Mr Itoje had attended any hospitality events. They concluded the annual sums were a salary benefit, and not a bona fide commercial arrangement.

Also, there appeared to be a conspicuous absence of any financial deals between Mr Wray and his minor Saracens players, such as a journeyman substitute, or a young utility player.  Instead, Mr Wray’s financial nous appears to have been drawn only to 'investing' alongside his most valuable players. Mr Wray has denied that his intention was to subvert the salary cap rules. But these deals were deemed by the SRDS Panel as consistently generous in favour of the player, essentially a method of boosting their salaries whilst describing it as something else. When one looks at these dealings collectively, perhaps the old adage “If it looks like a duck and quacks like a duck, it is a duck” is appropriate.

Mr Wray resigned as Club Chairman in January 2020, after Saracens failed to demonstrate that it could meet the salary cap rules for the current season.

Manchester City and the Sheikh’s gift disguised as sponsorship

In the Manchester City case, the position is rather more simple, and (assuming UEFA is correct) rather more blatant. Manchester City have been owned by Sheikh Mansour, via his company the Abu Dhabi United Group, since 2008. There is no wage cap in professional football but there are Financial Fair Play (FFP) regulations, which are enforced by UEFA. These rules are designed with a similar purpose as in rugby i.e. to stop a club becoming so dependent on its owner’s donations that it would become unstable should the money tree suddenly be pruned. For this reason, in football, it is possible to pay massive salaries provided the club has a specified proportion of legitimate commercial revenue to justify this, rather than simply replying on the benevolence of its owner. So, unlike in Premiership rugby, Premiership football clubs can pay their players whatever they like, provided they make a specified proportion from match day revenue, television rights, merchandise sales and so forth.

This month, after an investigation lasting well over a year and beset by legal challenges from Manchester City, UEFA’s Club Financial Control Body concluded that Manchester City had cheated the FFP rules by falsely inflating their reported sponsorship revenues. UEFA said in a statement:-

“The Adjudicatory Chamber, having considered all the evidence, has found that Manchester City committed serious breaches of the UEFA Financial Fair Play Regulations by overstating its sponsorship revenue in its accounts and in the break-even information submitted to UEFA between 2012 and 2016. The Adjudicatory Chamber has also found that in breach of the regulations the club failed to cooperate in the investigation of this case by the CFCB.”

It had been reported by Der Spiegel in 2018 that Manchester City had declared £67.5m in shirt sponsorship from Etihad, the Airline of Abu Dhabi. In fact, leaked e-mails suggested that only £8m of that money came from Etihad, with the remaining £59.5milion coming from the club's owner Sheikh Mansour’s company, the Abu Dhabi United Group. In this way, the source of this money was disguised to make it look like genuine sponsorship income, when in fact it was just further support from the owner. As such, the false declaration concealed breaches of the Financial Fair Play regulations.

If UEFA are correct, there are two real mischiefs here. Firstly, should Sheikh Mansur suddenly turn off the financial taps, then Manchester City would face immediate financial turmoil. This scenario is what the FFP rules are intended to prevent - rules which all elite football clubs signed up to in 2011.

The second mischief is that, in a stark analogy with Saracens rugby, Manchester City have won nine English football trophies since 2011. Four of those were Premiership titles. That is a lot of hard won, often closely-fought trophies, defeating many arch rivals. On many occasions the margin of victory has been fine, with pivotal pieces of skill from highly-paid players. Meanwhile, millions of football fans have been perched on the edge of their (increasingly expensive) seats, watching it all unfold with a mixture of heartbreak and joy.

On the face of it, Manchester City's rival clubs have all obeyed the Financial Fair Play regulations whilst City stole a march on them, using little more than creative accounting. Indeed, Manchester City had already been fined, back in 2014, for breaching the very same rules

It should be stressed that, in the current matter, Manchester City have not yet exhausted their appeal process. Unfortunately that appeal is expected to take several months, and so may not be resolved before next season's Champions League begins.

Looking at the potential criminality, both Saracens and Manchester City have each been found to have repeatedly filed misrepresentations about their financial position to their regulatory body:- Manchester City misrepresented the source of its income, whilst Saracens misrepresented the full scope of its wages. All this was done, it is has been concluded, with the intention to cause a gain for the club itself, i.e. to maintain eligibility for elite sporting tournaments, which both clubs regularly went on to win. There were multi-million pound pay-offs for these victories. In law, are the rivals of Saracens and Manchester City not the victims of a crime, such as fraud? And, if not, why not?

Perhaps the truth is that criminal sanctions are avoided only due to the culture of enforcement, rather than the law itself. Hugely popular sports clubs tend to be spared full-scale fraud investigations. Nobody expects to see the CEO of Manchester City or Saracens being led into the dock any time soon. But perhaps that is the problem. On the current evidence, so-called ‘Financial Doping’ seems to get results. It seems to produce winners, trophies, and legions of fans. All of this boosts revenue. And, with no real prospect of criminal sanctions, it means that regulatory bodies end up punishing the club mostly by issuing fines. Therefore, with only money at stake, the wealthiest benefactors will ultimately bail out their massively wealthy clubs. And so round we all go again.  Hence the need to start banning these offending clubs from big tournaments. This is really the only sanction left because, in the ‘Financial Doping’ of rugby and football, it seems a criminal prosecution just wouldn’t be cricket.


Click here to find out how our regulatory and defence solicitors can help you if you or your organisation has have been accused of fraud, dishonesty or regulatory breaches.


Legal Disclaimer

Articles are intended as an introduction to the topic and do not constitute legal advice.