Manchester City could play in next season’s Champions League even if the club is relegated from the Premier League over financial breaches.
The issue centres on the possibility of City winning the Champions League, which would qualify them for the competition as titleholders regardless of their position in the English football pyramid.
BBC Sport reported that there is no automatic mechanism to remove a club from a European competition if it qualifies on sporting merit.
An independent commission found City guilty of charges relating to the inflation of sponsorship revenue by £830 million through sham contracts and the concealment of another £90 million in expenses.
The commission said City would have breached profit and sustainability rules in all nine seasons between 2009-10 and 2017-18 without the alleged financial adjustments.
City have denied wrongdoing, describing the outcome as a “Premier League conspiracy”. The club also lodged an appeal against the verdict last week.
Several senior figures within English football had reportedly expressed concern about the possibility of City qualifying for the Champions League next season.
The immediate issue is the UEFA licence required by clubs to compete in European competitions.
One source said the issue of City’s licence “had been raised”, adding that a solution “would require the sort of joined up thinking that’s been a bit lacking so far”.
The licences are issued by the Football Association, although the process is delegated to the Premier League.
According to the report, the licences are based on current information and do not take into account sanctions or breaches relating to historical offences.
A licence cannot be refused if a club meets all the minimum admission criteria.
The main grounds for failing to meet the criteria include overdue payments to other clubs or players and outstanding tax liabilities. Match-fixing convictions within the previous 10 years and integrity conflicts involving multi-club ownership are also considered, but do not apply to City.
Another source said: “Licences are awarded on the basis of current financial performance, so the grounds to refuse one are unclear.”
If the commission’s verdict is upheld on appeal, City could face sanctions including a points deduction, a substantial fine and transfer embargoes.
The hearing to determine the punishment has yet to be scheduled.
A points deduction could prevent City from qualifying for the Champions League through their league position, but qualification could still come through a cup competition.
Expulsion from the Premier League also remains an option.
The report said senior figures in English and European football were concerned about the prospect of City facing significant sanctions while still competing in the Champions League.
There are also doubts over whether the disciplinary process, including any appeal against the eventual sanction, will be completed before the end of the season.
The Premier League introduced new regulations in the summer setting time frames for disciplinary processes and appeals. If applicable to the City case, a judgment on the sanction would have to be made by January, although there is no confirmation that the provision applies to the case.
City could also qualify for another European competition through the domestic cups.
Winning the FA Cup would provide a Europa League place, while winning the Carabao Cup would provide qualification for the Conference League.
UEFA cannot take action while the Premier League disciplinary process is ongoing, but potential scenarios are expected to be considered by UEFA’s administration and the UEFA Club Financial Control Body.
The Premier League commission found City guilty of five charges relating to breaches of UEFA’s profit and sustainability rules.
UEFA could open a disciplinary case to determine whether there is a basis for removing City’s European eligibility, although the historical nature of the alleged offences could complicate such action.
In 2020, City successfully overturned a two-year UEFA ban from European competitions.
UEFA had imposed the ban after finding the club guilty of “serious breaches” of financial fair play regulations between 2012 and 2016.
However, the Court of Arbitration for Sport overturned the ban, ruling that the offences were “time-barred” under UEFA rules.
If City lose their appeal and subsequently win the Champions League, the Club Financial Control Body would have to determine whether there was a disciplinary measure capable of preventing the club from competing in the following season’s competition.
City’s previous successful appeal against UEFA through the Court of Arbitration for Sport remains a factor in the situation.
