Topline: UEFA’s two-year Champions League ban on defending Premier League champions Manchester City, for allegedly misleading European soccer’s governing body and breaking financial fair play rules, will cost the club around $80 million in revenue in 2020. 

  • Manchester City, which faces off against Real Madrid in the Champions League round of 16 later this month, on Friday was banned from European club competition for the next two seasons and fined $32.5 million.
  • The club reportedly committed “serious breaches” of club licensing regulations by inflating sponsorship revenues, and the team also “failed to cooperate” with an ongoing investigation from UEFA, according to the decision.
  • According to Forbes’ latest estimates, Manchester City made $678 million in revenue last season ($72.6 million in total from playing in the Champions League when it reached the quarterfinals) and is the fifth-most-valuable soccer team in the world, with an overall franchise value of nearly $2.7 billion.
  • Assuming that Manchester City reaches the quarterfinals again this year, the Champions League ban next year would amount to a loss of $77 million (including around $53 million in prize money and $10 million from broadcasting), or 11% of the club’s overall revenue in 2020. 
  • That would translate to a $295 million loss in value, lowering Manchester City’s overall valuation to $2.38 billion, Forbes calculates.
  • Manchester City could miss out on $47 million at the lower end of the prize money range (combined payout for reaching the round of 16) and up to $102.35 million (if they win the Champions League).

Crucial statistic: Manchester City is easily a $2 billion club even without the Champions League, so they’re still going to be one of the most valuable soccer teams in the world despite this ban.

What to watch for: Manchester City will launch an appeal to the Court of Arbitration for Sport “at the earliest opportunity,” the club said in a statement.

Key background: The owner of Manchester City is holding company City Football Group, which is majority owned by Abu Dhabi’s royal family, which has poured a huge amount into the club. Besides Manchester City, the group controls six other soccer clubs on five continents, including Major League Soccer team New York City F.C. Starting in late 2018, Manchester City came under scrutiny after a leak of internal documents revealed that the team had broken UEFA’s club licensing rules by misrepresenting the source of its sponsorship income. That goes directly against the UEFA Financial Fair Play Regulations, which were established in 2009 to prevent clubs from spending more than they earn and getting into financial problems by doing so.

Tangent: In November, City Football Group sold a stake of just over 10% to American investment firm Silver Lake Partners for $500 million. By those numbers, the deal valued City Football Group and all of its holdings at a whopping $4.8 billion. Obviously, Silver Lake knew about the ongoing UEFA investigation, given that regulators have been looking at City’s financial practices since December 2018. They didn’t hesitate to pay up for the stake, indicating they know how valuable the club is even without a Champions League appearance.

Further reading: Manchester City Banned From Champions League, Putting Extra Pressure On Real Madrid Match