Free-spending Manchester City, PSG hit with heavy UEFA penalties

English Premier League champion Manchester City and French club Paris Saint-Germain have both been hit with heavy penalties by the Union of European Football Associations for violating UEFA’s Financial Fair Play rules.

The teams were fined more than $80 million and will have their rosters reduced by four, to 21 players, for next season’s UEFA Champions League tournament, among other sanctions. Afterward UEFA and City tried to make nice through competing statements although it was obvious there was little agreement over the UEFA actions.

A UEFA statement said that City had agreed to “significantly limit spending in the transfer market for seasons 2014-15 and 2015-16.” And in a statement of its own the club, winner of two of the last three EPL titles, said it remained on course to break even for the current financial year and continues to operate without debt.

In the seven years it has been under the ownership of Abu Dhabi’s royal family, City has increased its spending drastically. This season it had the highest payroll of any sports franchise in the world with each of its first-team players making an average of $8 million.

Paris Saint-Germain has undergone a similarly expensive transformation since being bought in 2011 by the Qatar Investment Authority, which spent more than $335 million on players in less than two years. As a result PSG has won the last two Ligue 1 titles.

“Manchester City Football Club can confirm that at the end of the current financial year [May 31] it is on course to financially break even, as planned,” the club said in its statement. “Operating with no debt, the club is realizing its football and commercial opportunities whilst continuing unprecedented investments in both youth development and the local community.

“From the outset, the club has engaged with UEFA in its introduction of the Financial Fair Play regulations in good faith and without prejudice and in a transparent and collaborative manner. The club’s position is that it is beholden upon UEFA and the European football establishment to ensure the same.

“In normal circumstances, the club would wish to pursue its case and present its position through every avenue of recourse. However, our decision to do so must be balanced against the practical realities for our fans, for our partners and in the interests of the commercial operations of the club.”

Seven other clubs -- Zenit St Petersburg, Rubin Kazan and Anzhi Makhachkala of Russia; Turkey’s Galatasaray, Trabzonspor and Bursaspor; and Bulgaria’s Levski Sofia – were hit with lesser fines.

The teams all exceeded the $63 million in losses permitted by UEFA in the last two seasons.

The Financial Fair Play regulations were first agreed to in principle in September 2009 at a time when more than half the 655 European soccer clubs surveyed reported they were losing money. The intent of the rules was to keep teams from spending more than they earned in the pursuit of success while producing a more level playing field among clubs with wealthy owners, such as City and PSG, and others that are run on a more sustainable business model.