How Manchester City will adapt to new Financial Fair Play rules in 2025

Financial Fair Play (FFP) regulations were introduced by UEFA back in 2013 as a response to the growing concerns about a small portion of wealthy clubs overspending on players and getting a competitive advantage over other teams.

Since then, those rules have been adopted by leagues – such as the Premier League – in a bid to improve the financial health of clubs and ensure an equal playing field. Clubs like Manchester City, which have not been shy in spending big on transfer targets, have been heavily impacted by such policies.

So, with new movements surrounding the FFP rules in 2025, let’s check out how Manchester City will adapt and the possible ramifications.

The Current Profitability and Sustainability Rules in the Premier League

At the moment, Manchester City must adhere to the rules of the Premier League Profit and Sustainability Rules (PRS). In a nutshell, they dictate the amount of money that clubs can spend over a specific period, so they must toe the line for balancing the books and expenditures.

Although similar, these rules are not the same as the Financial Fair Play regulations, which specifically apply to teams that play in competitions such as the Champions League and Europa League.

In its basic form, PSR allows clubs in the Premier League to lose:

• £105 million in three seasons

OR

• £35 million per season

Nevertheless, this is based on a requirement through secure funding from owners, such as buying shares, which should cover £90 million. Without it, the allowed losses for a three-year period stand at just £15 million. Youth development and infrastructure projects don’t fall under these requirements.

New Proposed Standards

Over the past few years, it became clear that the PSR introduced in 2013 is not fit for today’s market due to the rising inflation and the evolving football market that made mid-table teams unable to keep up the investing pace with the big boys in the league.

Moreover, clubs such as Manchester United and Aston Villa were on the brink of breaking these rules, which saw them increase ticket prices.

In 2024, Premier League clubs have agreed in principle to introduce new financial fair play rules. These stipulate that the PSR will be replaced with a similar squad cost control, which will see clubs only allowed to spend a set percentage of their annual turnover on salaries for the first team and the coaching staff, as well as the amortised costs of transfers and fees for players’ agents. Clubs agreed that any team that breaches these rules will face serious points deductions.

Manchester City’s Legal Issues

Manchester City’s legal issues began in 2018 when Der Spiegel published leaked emails that proved the Citizens’ owners were knowingly breaking UEFA’s financial fair play regulations through false sponsorship deals.

These charges spun across nine seasons – allegedly, sponsorship deal fabrications started in 2009 and went on until 2018. What is more, Manchester City were charged with failing to cooperate with the Premier League during its investigation into their finances.

During the alleged period, Manchester City won three Premier League titles. Among the charges against City is that there was a secret contract with one manager who was earning much more than officially stated.

A Delay to the New Initiative

Premier League clubs were quick to express their support for the new proposed rules, but they also agreed that their implementation must wait, for now.

This means that the PSR will continue for another year. The Professional Footballers’ Association is against the new rules, saying that they were not consulted. Moreover, Manchester City is still in a legal battle against the Premier League, for which clubs don’t think it makes sense to implement a new system until legal disputes are resolved.

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The Effects of the New Legislation on Manchester City

As stated above, PSR restricts Manchester City and all club losses to £105 million over three years, but the new Squad Cost Ratio (SCR) limits clubs to spending 85% of their revenue on football-related costs.

However, UEFA’s financial fair play rules are akin to this, so there shouldn’t be any issues for Manchester City in this regard.

On the other hand, SCR features a rule so-called ‘anchoring’, which restricts how much clubs can spend on player wages and transfers. That amount is five times the revenue the bottom Premier League club received in broadcast deals and prize money.

Now, this is where big teams like Manchester City may face some problems. Over the years, the Citizens used to pump their wage bill with players like Erling Haaland, but it now seems like such transfers won’t be possible.

On the other hand, the Professional Football Association understandably is against these rules. It noted that they may take legal action against SCR’s ‘anchoring’ rules, as they are essentially a salary cap in disguise.

All these new rules will also need to comply with the new UK Soccer Governance Bill which requires clubs to prove that they are financially self-sustainable. There is also an independent regulator and its operating costs Manchester City will need to worry about.

Recent reports stated that the UK government has recommended teams in the Premier League to contribute at least 80% of the new regulator’s operating costs over the first 10 years.

This sum can reach around £132.8 million, while top-flight clubs like Manchester City must pay back the majority of the regulator’s startup expenses – which will initially be financed by the government itself.

The other 20% of the operating costs will be shared between 72 EFL clubs and 24 outfits in the National League, proportionally. This sum is expected to reach £2.6 million.

Time Will Decide

Given Manchester City is one of the clubs with the biggest revenue in English football, they shouldn’t have any problems with the football-related costs. Salaries and transfers are another issue which will probably be strongly opposed by Manchester City and other top-flight teams in the Premier League.

But, before all that, we must all wait to see what the verdict is on City’s alleged sponsorship deal fabrications. All those 115 charges are no joke, and it seems like all options are in play.

The punishment can really be unlimited and far-reaching. City can get a financial fine, a point deduction, or they can even be expelled from the Premier League – if found guilty, of course.

If the last scenario happens, then the SCR will be the least of the worries among City owners and supporters.

So, there is no way to tell how Manchester City will react to the new SCR rules until we hear a verdict on the club’s charges.

That verdict is expected to come in the first quarter of 2025, and everyone eagerly awaits it. Other top teams and managers have made their feelings clear about the City’s ongoing legal battle, so it seems like the Citizens are up against everyone in this case.