This could be one of the last cases of overspending and winning a major trophy with a star-studded team that is financially not sustainable. Artificially created teams full of superstars might soon become history in the world of football, and the United Arab Emirates royal family owned Manchester City was the first to face sanctions.
Manchester City didn't get to celebrate their Premier League title for long before it got bitter. After failing UEFA financial play rules, which undoubtedly played a role in City coming out of anonymity to eventually dominate the BPL and win two titles in three seasons, UEFA sanctioned the English title winner for their breach of financial fair play (FFP) rules in the past two seasons.
Manchester City can only name a 21-man Champions League squad next season, only £49m can be spent on players during the Summer transfer window, and the wage bill must stay the same. City issued a statement which is basically saying they're fine with those decisions - that they used 21 men this season in CL anyway, that they weren't planning to spend more than £49m anyway, and that their wage bill would be lower anyway.
The reason for the fine is that Manchester City repeatedly spent more than their generated revenue, and UEFA is sanctioning such behavior in order to 'save the clubs from themselves', preventing them from making suicidal moves which might result in the collapse of the club, all in an effort to win the trophy. Manchester City has by far the most expensive squad in the BPL according to Transfermarkt, £368m, while their main competitor for the title, Liverpool, is valued at only £230m, ranking fifth in the league. Incidentally, the difference of £138m is almost the exact amount by which City was in breach of FPP.
City posted combined losses of almost £150m for the past two seasons - £97m in 2012 and £52m in 2013. Under this monitoring period, past two seasons - 2011-12 and 2012-13 - total losses of £37m are permitted as long as clubs have owners who can cover such amounts, which means City spent £113m too much.
Until 2009, Manchester City were constantly in or around the bottom part of the BPL table, even struggling against relegation on occasions. In August 2008 the club was purchased by the Abu Dhabi United Group, and the takover was immediately followed by bids for high-profile players. City quickly broke the British transfer record by signing Robinho for £32.5m. Over the course of three seasons, City spent £370m on reinforcements, including fees received for outgoing transfers.
This decision was fruit of negotiation between UEFA and Manchester City, and City accepted the sanctions mentioned above. If they hadn't, they would be facing a much harsher and a non-negotiable decision from UEFA independent adjudicatory panel. Contrary to what most news sites wrote, there was no £49m fine involved, the £49m is the limit City can spend on new players. It wouldn't make sense to fine a club for being in debt. All the UEFA sanctions are directed towards making City spend less.
Liverpool wasn't under UEFA investigation as they didn't participate in European competitions, but also might be facing sanctions in the future as they're also spending well beyond their means.
Arsene Wenger, the Arsenal manager, thinks a ban from European competitions would be the only fair punishment for clubs such as Manchester City that breach the financial rules of the competition.