Manchester City risk Champions League expulsion if they tackle Uefa over FFP punishments

Manchester City will risk possible expulsion from next season’s Champions League if they fight the sanctions Uefa impose on them for being in breach of Financial Fair Play.

City, who can take a giant stride towards the Premier League title by beating Aston Villa tonight, learned yesterday that Paris Saint-Germain have been hit by far harsher sanctions than had been expected for their own breach. It would be surprising if City faced similar tough punishment to PSG, who will receive a €60m (£49m) fine, a reduction from 25 to 21 in their squad for next season’s competition and the stipulation that their wage bill for next season’s competition must not exceed this season’s. It is by no means certain that City will face the same penalty as the French club – even though the PSG settlement reveals that the sanction regime is going to be tough.

City must either reach a settlement with Uefa’s Financial Control Body or a non-negotiable punishment will be put into the hands of the adjudicatory chamber of that body. City’s right of appeal then goes to the Court of Arbitration for Sport, which would consider their case before the start of next season’s competition. Lawyer Daniel Geey, the football law specialist at the firm Field Fisher Waterhouse, who has advised clients and written extensively on FFP, said last night that an appeal did create a “higher risk of expulsion” for City.

“It seems logical that if you settle with Uefa you are going to receive greater leniency from the regulator,” Geey said. “That is the incentive to settle. If you challenge the decision, and in the case of a severe breach, you run the risk that every sanction is available to the FCB including expulsion from the Champions League.”

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City, who go into the Villa game at the Etihad Stadium tonight without the injured Sergio Aguero, appear to have grounds to argue that they should not get the same punishment as PSG, having produced audited accounts which saw them narrowly pass the FFP test in February. City have also halved their losses for each of the last two years.

They do seem likely to face a fine – PSG’s is payable over three years – and a stipulation that they reduce next season’s squad. The fine may not be damaging because it is likely to be excluded from the spending which forms part of future FFP calculations. Effectively that means their Abu Dhabi owners could provide loans to enable them to pay it. Keeping wages at the last financial year’s levels – another of the sanctions – is also eased by the fact that the pay-off for former manager Roberto Mancini and his substantial staff were included under “wages” for 2013. That figure would automatically have been reduced for this year anyway.

However, a demand to reduce their 2014-15 Champions League foreign player component by four – PSG’s punishment – would be more biting. It will make the English component of the squad far more important to manager Manuel Pellegrini, at a time when City are preparing to lose Gareth Barry, Joleon Lescott, Micah Richards and Scott Sinclair from their payroll. The importance of James Milner and Jack Rodwell increases and Pellegrini may need to bring home-grown players back to bolster his squad.

It was unclear last night whether the fine which City must pay to Uefa will affect their spending on wages under new Premier League FFP rules. FFP expert Ed Thompson said that it may limit City, who are only allowed to increase wages by £4m next season unless they increase their revenue, to cover a rise beyond that.

Thompson pointed out that the accounting device by which City included Mancini’s pay-off under “wages” allowed them to limit the damage of wage restrictions. “The pay-off to [Mancini’s predecessor] Mark Hughes was listed as an ‘exceptional item’. The new Premier League spending constraints uses 2012-13 as a benchmark season for wage-increases. Again having Mancini’s pay-off in this category helps,” Thompson said.

City have until the end of the week to reach an agreement with Uefa over the sanctions – but it is understood they are the club furthest away from reaching any final settlement.

Their negotiations with Uefa come as City seek to move closer to a second Premier League title in three years tonight, with Pellegrini expressing hope that Aguero will be fit to face West Ham in the last league game of the season, which City will go into needing only a draw if they can beat Villa.

The Chilean insisted he had not watched Crystal Palace’s extraordinary comeback against Liverpool at Selhurst Park on Monday, which left the away side’s title hopes in tatters, but said the 3-3 draw was a warning for his players. “Always it’s a good lesson for everyone,” Pellegrini said. “No one knows what will happen in football – that’s why it’s the most important sport. It depends on a lot of things, not just what you can do. Liverpool were winning 3-0 but the score changed.”

Pellegrini, who has Yaya Touré fit, predictably refused to respond to Liverpool manager Brendan Rodgers’ claims that City – who have managed only one five-game winning run this season – may struggle to move beyond the three successive wins which Saturday’s win at Everton marked. “We are not thinking about five in a row,” he said, “we just need to win the one game on Wednesday first against Aston Villa. If I try to be calm it’s because I think it’s the best way for the players to play these two games.”

How would City cope with Uefa squad limits?

Ian Herbert

New deal for James Milner?

With four fewer foreign players, the obligatory home-grown component of eight in the 21-man Champions League squad becomes more important. With four of this season’s eight possibly leaving, James Milner becomes a far more significant part of the picture at City. He has a year left on his contract and his negotiating position has now become stronger. The same goes for Jack Rodwell.

Keep Micah Richards?

City may also need to think again about whether to allow English players to leave this summer to be replaced with foreigners. They are on course to have 16 foreign players next season – 19 if they bring in Fernando, Eliaquim Mangala and Bacary Sagna, making it difficult to accommodate all their big names. Keeping Micah Richards seems a more attractive option. Joleon Lescott and Scott Sinclair seem likely to go, however.

Bring back Rekik and Co?

The need for a stronger English component could lead to some of the young, home-grown players they have out on loan coming back. The best is Karim Rekik, who has said that he wants 20 games for City next season, having been out at PSV Eindhoven this season. Marcos Lopes and Emyr Huws, from Patrick Vieira’s Elite Development Squad, as well as John Guidetti, seem more important now.

Rethink transfer targets – to include Cesc Fabregas?

This summer’s prime objective is to bolster their defence. But while Cardiff City’s Steven Caulker is not currently on their radar, despite suggestions to the contrary, the situation City find themselves in make Cesc Fabregas, in whom they have an interest, more of an attractive proposition because he was a home-grown player at Arsenal. The highly-rated Paul Pogba of Juventus is also in the same category – home-grown at Manchester United.

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Stick to prudent wages?

City will not be in a position to splurge wages and that may be a factor in the transfer window – though that has been the case for some time. The new players signed last summer were in the £70,000- to £80,000-a-week basic pay bracket, with contracts now heavily incentivised as City move beyond the “accelerated growth” period when they agreed to pay players like Yaya Touré £220,000-a-week. When David Silva’s contract was renegotiated a year ago, his basic was in a bracket that would have been considered second-grade in the days of big spending.