Der Spiegel and MediaPart, in conjunction with Football Leaks as part of the European Investigative Collaborations network, has alleged that both Manchester City and Paris Saint-Germain have broken a number of rules in a bid to circumvent UEFA's Financial Fair Play regulations.
City have released one statement in light of the claims, insisting "the attempt to damage the club's reputation is organised and clear," while PSG stress they have "always complied strictly with the laws and regulations in force and strongly denies the allegations."
Since the revelations were made, fans of all clubs have wondered how likely it is that sanctions will be meted out, and speculated about anything from transfer bans to stripped titles.
To examine the possible investigations that City and PSG could face, and explore the likelihood of eventual punishments, Goal has spoken to two experts in relevant fields.
Rob Wilson, a football finance expert, and Dr Borja Garcia, a lecturer in sporting policy and specialist in European law, have provided insight into what comes next for City, PSG and UEFA.
WHO COULD INVESTIGATE?
UEFA, as European football's governing body, whose regulations are alleged to have been broken, has the remit to investigate.
"UEFA has the powers, there are regulations in place, and at the end of the day Manchester City still needs to comply with the break-even rule and FFP regulations, if they want to play in the Champions League," Dr Garcia explains.
So far there has been no public comment beyond the following statement: "We cannot comment on specific cases due to confidentiality obligations which UEFA must respect."
THE EUROPEAN UNION
La Liga told Reuters earlier this week that it will complain to the EU Commission if UEFA does not take action against City and PSG.
“Should UEFA fail to act, we will do what we have said before: launch a complaint with EU competition authorities.”
THE PREMIER LEAGUE
The Premier League also has its own set of Financial Fair Play regulations. There have been no allegations made that City have broken local spending rules, but the information obtained by Football Leaks could lead to an investigation.
The Premier League is yet to make its intentions clear, though it is understood to be "observing" the situation.
UK OR FRENCH GOVERNMENTS
Rob Wilson says there is a chance the UK government could be moved to look at Manchester City.
"They’re likely to at some point get on the train that says we should have an investigation but I don’t think they can formally do anything," he says. "They might raise it, they might have a chat in the House of Commons about it, you might get one of the Manchester MPs saying it’s harsh or otherwise."
WILL AN INVESTIGATION ACTUALLY HAPPEN?
"I think UEFA is the most likely, because other types of challenges are more unlikely or more difficult to see come to fruition," Dr Garcia says. "That would be the most likely."
"I think there’s a good chance," Wilson agrees. "There’s going to be a lot of public pressure now to investigate both."
THE EUROPEAN UNION
"I think it’s a bit of posturing," Wilson says of La Liga's threat.
Dr Garcia believes it is unlikely, although there could be several routes La Liga could take. "It is difficult. It’s all very well and good to say they are going to the EC but they didn’t actually say what it is that they are going to go to the EC with. What is it that they are going to challenge? Who are they going to challenge? Under which legal base would they challenge? So it’s lacking in details.
"Now, could they challenge the clubs for anti-competitive behaviour or abuse of dominant position? I cannot see how you can argue that. You can try, you can say that they have anti-competitive behaviour or they are having an impact on economic activity, you have all those tests under different articles, which would be really, really difficult to prove, I think. Can they go and argue that UEFA not enforcing FFP is actually distorting competition? That’s difficult but perhaps I could see that, as an argument.
"All in all I think it is difficult to see a successful challenge. However, the simple threat of a legal challenge might empower UEFA to act differently. My take on that is what La Liga is trying to do is to put political pressure on UEFA."
THE PREMIER LEAGUE
"In the Championship we’ve seen a number of transfer embargoes, the [£40m] fine to Queens Park Rangers, but on the evidence we have no rules have been broken," Dr Garcia says. "The Premier League may decide to do something similar but I think it’s really difficult to see that."
In any case, Premier League regulations allow for clubs to make losses of up to £105 million, whereas UEFA requires clubs to at least break even.
"I would say it's unlikely in terms of formal input," Wilson says. "Because these are all private sector businesses, ultimately, the [UK] government doesn’t actually have any jurisdiction over what they should and shouldn’t do. Damian Collins [MP for Folkestone & Hythe, Chair of the Digital, Culture, Media and Sport select committee ] a couple of years ago complained about Leeds United and Ken Bates and saying this is in the public interest, but this is essentially a privately owned company, what right do the government have to say how they should or shouldn’t be running their business?”
COULD CITY OR PSG GET TRANSFER BANS?
UEFA dropped transfer embargo proposals related to FFP in 2011, on the grounds that they were legally unenforceable. FIFA and the Premier League are responsible for player registrations, meaning the Premier League could mete out a transfer ban if they investigate, although there is no such precedent.
UEFA, however, could restrict the size of clubs' 'A lists', which is the roster of players eligible to play in European competition. Both City and PSG were given this punishment when they were found to be in breach of FFP in 2014.
UEFA's FFP regulations state: "The A list restriction is further supported by the restriction on the number of new registrations that clubs can add to the A list." This, in theory, means UEFA could ban new signings from being eligible for the Champions League or Europa League.
It is regarded by experts as highly unlikely that either City or PSG would be stripped of domestic titles by their respective leagues.
UEFA does not have the power to levy such punishments.
Fines are likely to be handed out in the event of an investigation and guilty verdict. Both City and PSG were fined around £50m (as well as the aforementioned restrictions on their European squads) when they both accepted their FFP punishment in 2014.
Should a case be successfully brought against City and PSG by the EU Commission - which is regarded as unlikely - neither club would face any sporting penalties but Dr Garcia warns they could face significant fines.
"Fines in the European Commission on competition policy issues are very, very heavy," he says. "It could be 10 per cent of the turnover. [City's turnover was over £500m in their most recent accounts, PSG's €486.2m].
"There are some very heavy fines in the history of the EC, like the one they imposed on Google [£3.9 billion] and Microsoft [€900m and €561m]. The commission has the power to impose very, very heavy fines, which would not strip Manchester City or PSG of any titles but which would severely, severely damage the economy of the companies."
EUROPEAN FOOTBALL BANS
A ban from the Champions League or Europa League is regarded, under current FFP regulations, to be the most serious punishment for breaching UEFA's spending rules. Both City and PSG avoided bans in 2014 but any new investigation by the European football's governing body could lead to tougher measures.
WOULD IT EVER GET TO THAT?
The chances of City and PSG ultimately being punished depends on many factors, one of which would be the admissibility of the evidence gathered by Football Leaks. Investigations could be launched but without hard evidence to back up the allegations, punishments will not be levied.
COULD MAN CITY & PSG CHALLENGE?
In the event sanctions are handed out or merely threatened, both Wilson and Dr Garcia believe City and PSG would have grounds to challenge the very principles of UEFA's Financial Fair Play regulations either in the Court of Arbitration for Sport or the civil courts.
Wilson says: "I think what we will find now is if these allegations are proven and the evidence formally comes to light then what we’ll see is UEFA having to take a much stronger position on the sanction because of the breach, but then you will also see Man City and PSG then challenge the legality of Financial Fair Play at its very core."
Dr Garcia concurs: "UEFA knows that Financial Fair Play is on shaky legal grounds and then UEFA has a decision to make, do they lower the penalty or do they impose the full penalty and then go to court and defend the full system."
Next week, Goal will take an in-depth look at how City and PSG could challenge FFP in court, and whether such a challenge would be successful or not.
This article is based on questions put to professionals on the presumption that Der Spiegel and MediaPart allegations are true and accurate. Goal recognises that no evidence of such breaches has been presented to the appropriate authorities at the time of writing.