Due to UEFA’s rules on multi-club ownership, the two Manchester clubs – Manchester City and Manchester United – must both exercise a blind trust option.
City Football Group (CFG) is the majority shareholder of Manchester City and Girona, along with several other clubs around the world. City and Girona will both make the UEFA Champions League, so they are coming into violations of UEFA’s rules. The same is true for INEOS, who owns United and Nice. Both qualified to the Europa League and INEOS owns the majority of shares in each club.
UEFA’s rules on multi-club ownership state that no one can have control or a decisive influence over more than one club in the same competition. It means that both CFG and Ineos could be in trouble due to multiple clubs being under their umbrella.
What counts as a decisive influence?
UEFA defines decisive influence in four ways.
UEFA says that a club can hold decisive influence over another if they have transferred three or more players to the other, or if they share the same scouts and facilities. Midfielder Yangel Herrera, star winger Savio, and right-back Yan Couto were all sold to Girona under CFG’s leadership.
They also say a club can hold a decisive influence if a club provides ‘financial security’ to another club by lending money, or if one club’s revenue is at least 30% of the other club’s total revenue.
UEFA defines decisive influence through the people in charge as well. If an individual has a position in the clubs’ governing bodies — CEOS, sporting directors, CFOs, etc. — then they hold decisive influence. If a member of one club hires and fires members of another club, that’s also a decisive influence.
And finally, the final definition of decisive influence, and arguably the most important, is the allocation of shares. If an owner holds 30% of shares in both clubs or if the owner holds at least 10% of shares AND is a leading shareholder, that is a decisive influence. CFG holds a 47% stake in Girona and a majority stake at City.
What is a blind trust?
A blind trust is where a party assigns shares to an independent third party. A blind trust allows the majority shareholder to satisfy UEFA’s shareholder rules while maintaining a heavy influence over the club.
UEFA recently announced that blind trust would be offered to clubs based on whether the shareholder has a ‘decisive influence’ over the clubs. Clubs accepted will need to provide evidence that they don’t hold a decisive influence through financial aid or club governance — which INEOS hasn’t yet.
“We might have to change some things, but what UEFA recognizes is that the multi-club model, in many circumstances, benefits the smaller club quite a lot. It says you have to change the ownership structure,” United shareholder Jim Ratcliffe said.
“So it’s all about influence and positions on the board and that sort of thing. So, a) the rules are changing, and, b) there are shades of grey, not black and white.”
The consequences of violating UEFA’s complicated rule mean only one of the two clubs could play in the same competition. The team that places higher in their league would play in the higher competition. The lower team would play in the lower competition.
United finished eighth in the Premier League, while Nice finished fifth in Ligue 1. If INEOS couldn’t prove a lack of decisive influence nor agree on a blind trust option, United would play in the Europa Conference League. Chelsea would take United’s spot in the Europa League.
Clubs have until June 3 to rearrange their ownership structure and show UEFA their plans. While the investigation goes on, United can’t make any transfers through Nice, and City can’t make any transfers through Girona. It means a City move for in-demand winger Savio will have to wait.
