It was late morning on Tuesday 12 April 2011, when a senior executive within Etihad Airways’ sports sponsorship team wrote an email to a business contact in Manchester City’s partnerships department.
It took a month for Manchester United under Sir Alex Ferguson to win their 19th English Premiership title, surpassing Liverpool’s record of 18. Chelsea would be second that season with 71 points, just ahead of City, also with 71.
City, then managed by Roberto Mancini, had extended the wait for a first title since 1968 to 43 years, but with a core of influential players including Joe Hart, Vincent Kompany, David Silva, Yaya Toure, Gareth Barry, James Milner and Carlos Tevez – together with Dimitar Berbatov winner of the Golden Boot in the Premier League – they seemed to be knocking on the door of a real renaissance.
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The director of Etihad started their email: ‘Dear [XXX] … there seems to be some confusion about an outstanding sponsorship balance for the 2010/11 season.”
The Mail on Sunday knows the identity of both the sender and main recipient of the email, but neither of them work for the same company anymore and both have moved to different industries.
‘As you know,’ the writer continued, ‘Etihad’s pledge is £4 million and the remaining balance (£8 million) is handled separately by the [UAE] Executive Affairs Authority. Could you please clarify this with your accounting department and collect it directly from the EAA in due course. Kind regards.’
To put this into context, The Mail on Sunday has been told – and has seen corroborating paperwork – that Manchester City have billed Etihad £12 million for the 2010-11 shirt sponsorship deal, but the bill had a handwritten note that Etihad itself was only to blame. paying £4m that year.
Manchester City billed Etihad for £12million for the 2010-11 shirt sponsorship deal – not £4million
In addition, sources say, and documents show, the City-Etihad shirt deal at the time – signed by then City CEO Garry Cook and Etihad CEO James Hogan – would cost Etihad £4 million in the 2010 season. -11, which had cost them £3 million the season before, and then £4.5 million in 2011-12.
The EAA, which picked up the difference between the £12 million headline in 2010-11 and the £4 million paid Etihad, is, according to their website, “a specialist government agency empowered to provide strategic policy advice to the Abu Dhabi chairman.” Executive Council, His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.
Correspondence seen by the MoS and supported by contemporary paperwork suggests that Etihad did not in fact pay the amounts City billed, but a UAE entity serving Sheik Mohamed.
City has reportedly benefited from abnormally high sponsorship data from entities in the UAE, in deals that appear to violate FFP rules. If money were funneled into City to artificially boost their income for years, that would be a problem.
In fact, Etihad did not pay the amounts the city billed for, but an entity in the UAE did
And several emails and documents obtained by Football Leaks and/or this newspaper suggest that this has happened. The Premier League announced an investigation more than two years ago, but it has so far been delayed by City’s actions in court. The city has declined to clarify multiple issues about this.
Fast forward to the early summer of 2014 and a source close to City emailed the MoS, claiming that Etihad’s 10-year £340 million sponsorship with City was in fact funded not primarily by Etihad, but rather by Etihad and that a government agency is the largest part of the tab.
WHAT HAPPENS NOW?
City’s legal battle with the Premier League could still end in vastly contrasting ways, from a full acquittal of any offense to a severe penalty, including points deductions and fines.
Scenario 1: City finally fully complies with the PL probe and hand over all requested documents and information and this relieves them of any wrongdoing. No punishment.
Scenario 2: City are still not cooperating and the Premier League has insufficient evidence to do anything but punish them. CAS has imposed a fine of 10 million euros for this in the UEFA case.
Scenario 3: City is fully compliant with the Premier League’s investigation and handing over all requested documents and information and it helps the PL hold them accountable for wrongdoing and they are punished.
Scenario 4: City is not cooperating, but the PL is getting evidence from other sources. They accuse City of breaking the rules and a disciplinary procedure ends in acquittal or punishment.
Around the same time – and then City was just found guilty of violating UEFA Financial Fair Play [FFP] rules for the first time — the Mail on Sunday was informed of some unrest within Etihad’s sports sponsorship team over the airline’s relationship with City. A source known to an employee of that team said the airline’s targeted sports sponsorship deals had followed the same formula until then.
This involved relatively low spending on partnerships with teams or venues where sports franchises were either on Etihad flight paths to major airports (Harlequins rugby, both codes, on the Heathrow flight path; and in Melbourne, in football and Aussie Rules, on the Melbourne flight path), or would be in flight paths (tie-ups in New York football and three sports teams in Washington, which all happened).
Although Manchester airport is an Etihad destination, there have been private concerns that Etihad would not have to make a big money deal with one club if the envisaged strategy was consistent so far, sources say.
The MoS spoke to City about the allegations in the summer of 2014 and was told they could not be confirmed by the club. The sources refused to make public and no story came out.
Fast forward to the summer of 2020 and City had been banned from the Champions League for two seasons by UEFA, including for ‘disguised financing’ of sponsorship deals, in other words, saying a sponsor paid 100 percent of an agreed endorsement while in fact another entity picked up part of the tab.
The case was now on appeal before the Court of Arbitration for Sport (CAS) and among those testifying on City’s behalf was Simon Pearce, who holds multiple positions within the entities that ultimately govern City.
Pearce is a non-executive director of City and sits on the board of parent company City Football Group (CFG), which also owns Melbourne City, where he serves as vice chairman. He is also a director of several City subsidiaries and a senior advisor to the Executive Affairs Authority of the UAE.
At the CAS tribunal last year, Pearce was asked: ‘Have you ever arranged payments to Etihad in connection with its sponsorship obligations to Manchester City Football Club?’
He replied, “Absolutely not.”
Non-executive city administrator Simon Pearce (right) testified to the CAS CAS . last year
The official CAS verdict document stated: ‘Mr Pearce did not find the panel an unreliable witness and to uphold UEFA’s allegations would necessarily find that his testimony was false. The panel does not consider such a conclusion justified in the absence of evidence provided by UEFA that Mr Pearce in fact represented ADUG [a company controlled by Sheik Mansour].’
But days after the CAS verdict acquitted City of ‘disguised financing’ and fined them €10 million for non-cooperation with UEFA, German magazine Der Spiegel published hitherto unseen material suggesting Pearce had evidence. delivered to CAS which conflicted with previous allegations .
The whole case against City by UEFA had started with the publication in 2018 of a series of emails from Der Spiegel claiming to show wrongdoing by City. The ongoing Premier League investigation into City is based on the same material from Der Spiegel.
The e-mail from the football archive at Der Spiegel, as seen by the Mail on Sunday
The post-CAS bombshell email published by Der Spiegel last year is dated December 16, 2013, from Pearce (with his EAA email address) and sent to Peter Baumgartner, then Etihad’s chief operating officer (COO). . As our chart shows, Pearce appears to be admitting that he had in fact arranged a payment to Etihad in connection with his sponsorship obligations to City.
The email details how ‘we’ (City) should receive ’99 million pounds – of which you [Etihad] will bring in £8 million. I should therefore have forwarded £91 million and sent you only £88.5 million instead. In fact I owe you £2.5 million.’
The MoS asked the club a series of questions arising from this correspondence and they declined to answer specific questions. Instead, they pointed us to previous statements.
Regarding Pearce’s email, they said, “The questions and cases appear to be a cynical attempt to publicly re-litigate and undermine a case that has been fully tried by the Court of Arbitration for Sport.”
City tried last week to appeal the publication of the judges’ findings in the investigation
The club also claimed for years about Der Spiegel’s reports: “The attempt to damage the club’s reputation is organized and clear.” Asked to confirm who organized this, a city spokeswoman did not respond.
Following last week’s rulings by three of Britain’s leading judges that City thwarted the Premier League’s investigation, City said: “We respect the decision of the Court of Appeal in the arbitration case. This decision relates to ongoing proceedings and we cannot comment until these proceedings have been completed.”
City’s position is that they have not broken any rules. But it can now be revealed that, in an argument the club has taken to court, they have admitted that the Premier League apparently suspected there was evidence of wrongdoing. “The Premier League states that the… [media] reports contain information suggesting that the rules are being broken,” City’s legal team said.
The Premier League declined to respond to questions and their latest comment on the subject, in 2019 and still applicable, is that their investigation is ongoing.