Manchester City owner risks EU scrutiny over Abu Dhabi money

A SISTER club of Manchester City, controlled by Abu Dhabi’s Deputy Prime Minister Sheikh Mansour, risks falling foul of the European Union’s (EU) crackdown on unfair competition from foreign-funded firms.

Belgian team Royal Excelsior Virton has filed a complaint with the European Commission, alleging that one of its national rivals got an unfair boost when it was taken over by City Football Group’s (CFG) sprawling international network of clubs.

The complaint, seen by Bloomberg, could be one of the first tests of the EU’s Foreign Subsidies Regulation, which allows the European Commission to screen and potentially block investments or deals deemed to be bankrolled by foreign states such as China. The rules take effect from Jul 12.

In its filing, Virton claims that City’s May 2020 acquisition of Lommel and a subsequent capital injection of about 16.8 million euros (S$24.5 million) helped the team to obtain a professional licence to compete in the Belgium’s second-tier Challenger Pro League. Without the money, Virton alleges, its rival would have been relegated.

While sport wasn’t expected to be one of the EU law’s prime targets, the complaint signals how Europe’s richest teams are coming under more scrutiny, according to Christian Bergqvist, a specialist in antitrust law at the University of Copenhagen.

“There is simply too much money in football,” said Bergqvist. Foreign owners, including from the Gulf region, “flood foreign football teams with cash, which inflates the market and can distort competition.”

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Champions League semi-finalist Manchester City is the centrepiece of Sheikh Mansour’s CFG. Thirteen teams worldwide are backed by CFG cash, also including EU clubs such as France’s Ligue 1 side Troyes, the Spanish La Liga’s FC Girona and Palermo FC, which plays in Italy’s second tier division.

By owning multiple clubs in different regions, the likes of CFG aim to cut costs on scouting and player development and also build global fanbases for their top teams, boosting revenue from merchandise and TV rights.

CFG declined to comment on the complaint. The European Commission in Brussels declined to comment on the case, which was first reported by The Athletic.

Virton also points to Qatar-owned Paris Saint-Germain and Saudi-backed Newcastle United as examples of how foreign funds are affecting football finance – though they aren’t targeted in the complaint. BLOOMBERG