Leeds United could face an unexpected financial subplot after Manchester City’s extraordinary guilty verdict.
An independent commission has found City guilty of breaching Premier League financial rules over a nine-season period, and guilty of most charges relating to their alleged failure to co-operate with the investigation. Manchester City have said they will appeal.
The scale of the findings is difficult to get your head around.
One of the most significant conclusions concerned City’s sponsorship income. The commission found that £830.69m of the £949.94m recorded as Abu Dhabi sponsorship revenue during the period examined was actually funding from Abu Dhabi United Group rather than genuine sponsorship payments.
That £830m figure is obviously not money Leeds can simply claim a share of.
But the findings could have significant consequences for clubs who believe they suffered financially because of City’s conduct.
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Leeds could be owed more than £10m
A calculation published by Leeds Live put the club’s potential compensation at a minimum of around £10.3m, based simply on the difference in Premier League merit payments over the relevant period.
That should not be confused with a confirmed payout. It is essentially a starting point for working out what Leeds could potentially claim.
The figure could be considerably larger if Leeds could establish that City’s financial breaches directly affected their sporting and financial position.
That could include lost prize money, European qualification and the additional revenue that comes with playing in UEFA competitions.
And there is already a precedent for Leeds pursuing this sort of argument.
Leed already know how this works
The club reached a confidential settlement with Everton after arguing that Everton’s PSR breach had affected Leeds financially. Burnley subsequently pursued their own claim against Everton and were awarded £26m in principal compensation plus £9.1m in interest, although Everton have appealed.
That does not mean Leeds will automatically receive a similar amount from Manchester City.
The Manchester City case is far more complicated, covering nine seasons and many more alleged breaches. More importantly, Leeds would still have to establish a direct connection between City’s conduct and any financial loss they are claiming.
That is likely to be the difficult part.
It is one thing to demonstrate that a club broke financial rules. It is another to prove that those breaches changed the outcome of a particular sporting competition and caused another club to lose money as a result.
Nevertheless, the potential sums involved explain why this could become an important issue across the Premier League.
Reports suggest several clubs are already taking steps to protect their position if they decide to pursue compensation claims against City.
For Leeds, the potential upside is significant.
The £10m could just be the beginning
The reported £10.3m calculation is only based on merit payments. If the club can show it missed out on additional revenue because of Manchester City’s conduct, the eventual claim could be much higher.
But there is a long way to go before anybody at Elland Road can start counting the money.
Manchester City are expected to appeal the commission’s findings, while any punishment for the breaches still has to be determined. Any compensation claim would then be a separate matter and could involve another lengthy legal process.
So the sensible approach for Leeds is probably to wait and see.
Still, the findings have opened up a fascinating possibility.
Leeds could eventually have the opportunity to recover a significant sum from a club whose financial conduct may have affected the competitive and financial landscape around them.
The immediate figure being discussed is around £10.3m. Whether that becomes the final number, however, could depend on how far Leeds are prepared to take the argument and what they can ultimately prove.
