Manchester City, Mix Diskerud and Financial Fair Play loopholes
Manchester City have enjoyed a productive transfer window, but some of their deals deserve more scrutiny than others.
UEFA adopted Financial Fair Play regulations in 2009 and put them in place in 2011. The goal of the regulations, according to the BBC, is to “prevent professional football clubs spending more than they earn in the pursuit of success and in doing so getting into financial problems which might threaten their long-term survival.”
Many thought these regulations would prevent clubs like Manchester City and PSG from buying trophies. However, these regulations have had little effect on the richer clubs because the richer clubs usually generate the most revenue, allowing them to spend more without violating FFP regulations.
What FFP has done is prevent smaller clubs — particularly ones who get new, rich owners — from spending beyond on their means and ending up in a situation like QPR or, even worse, Portsmouth.
Big clubs haven’t been able to avoid FFP only due to their revenue streams, however; they’ve also discovered loopholes which allow them to spend more than they make. City are particularly savvy at exploiting these loopholes, as we’ve seen during this January transfer window with their purchase of Mix Diskerud and Jack Harrison, two players who may very well never play a game for the club.
Last Sunday, Umbro announced City’s signing of American midfielder Mix Diskerud from their MLS sister club, New York City FC, on a free transfer. Diskerud had most recently played on loan for IFK Goteborg, and last made headlines for being voted the most overrated player in MLS by his peers. Needless to say, the signing raised a few eyebrows.
But this is a proven method City use to bypass regulations: the use of sister clubs to facilitate transfers. This is a luxury afforded to very few, and one City are able to benefit from because the Abu Dhabi United Group own multiple clubs, administered by the holding company City Football Group.
The Diskerud transfer was a way for City to help out NYCFC, who were paying the wages of a player they didn’t use — not ideal for a league with a salary cap. Transferring him to City, who have no such cap, was an easy fix.
Diskerud signed a four-and-a-half year contract with City, but ESPN reported that the club has no intention of loaning him to any of the clubs within their network, having him play or train with the City first team, or even seeing out the entirety of his contract. ESPN stated that City plan to sell or loan Diskerud.
This is an astute financial move. Transferring his wages away from NYCFC frees up a lot of cap space for the club. Moving him to Manchester City, where they could potentially sell him, gives the club the opportunity to count his sale on their books. Even if it’s a small fee, it all adds up in the end.
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City made use of NYCFC again a couple of days later, announcing the signing of midfielder Jack Harrison, who was immediately loaned to Middlesbrough. The 21-year-old is unlikely to feature in Pep Guardiola’s star-studded team any time in the near future, but if he improves sufficiently at Boro, he could prove a useful player. The problem, of course, is that he will be a useful player even if he doesn’t improve sufficiently, as City will able to sell him on and add the profits to their already sizable revenue.
This isn’t the first time CFG have done something like this. In 2016, Australian midfielder Aaron Mooy moved to Manchester City from sister club Melbourne City on a free transfer. Shortly after he was loaned to Huddersfield, who he helped win promotion to the Premier League. In the summer, Huddersfield signed Mooy permanently from Manchester City for £10 million.
As far as UEFA knows, the fee went to Manchester City, because it’s written on their books that they’re the club who owned the player. In reality, CFG can do as they please with the money and funnel it into the club he actually played for, Melbourne City.
This loophole is relatively new, and City haven’t been able to exploit it frequently. In time, however, their sister clubs will develop more players City can sign on free transfers and then transfer to other clubs to keep their books clean.
FFP has done a big part of what it was meant to do: keep clubs, specifically smaller ones, from entering a state of crisis. But as City have shown again this window, it has failed completely in preventing the rich from getting richer.