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Notes -
Two different threads of thoughts not quite coalescing so stay with me for a bit.
Soccer and Cheating
Seismic news in the world of soccer (or football if you're an old-worlder) last Friday where news broke that Manchester City (MCFC) found guilty on almost all Premier League charges relating to financial breaches. On Tuesday, the Premier League released their official statement on Manchester FC, confirming the charges in very strong language (especially if you assume a team of extremely well paid British lawyers reviewed it).
For background, the Premier League (EPL) is highest level of the English professional soccer system, is the most watched in the world and by extension the most revenue, beating the second-in-line La Liga (the soccer league in Spain) by miles. Machester City FC would have been just another random soccer club sharing the same city as Manchester United, rotating in and out of the Premier League, until they were bought out by Sheikh Mansour in 2008. The fifth son of the Emir of Abu Dhabi (the largest, richest, most important emirate of the UAE), Sheikh Mansour is both rich and reasonably politically adept, he would be appointed the deputy prime minister of the UAE the following year in 2009, and then appointed second vice president in 2023.
Since the Sheikh bought MCFC, he pumped a boatload lot of money into it. The club signed top managers. Bought 1.243 billion pounds worth of players between 2009-2018. The club made multiple renovations to the stadium. And with all that money came a lot of success on the pitch itself. They've won the Premier League 8 times, they've won 4 FA Cup and 7 EFL Cup (domestic knockout tournaments parallel to the EPL). And to top it off in 2023, they won the European Champions League, being the second English club to ever completed a "continental treble". The first, btw, is Manchester United.
Now I must explain to you UEFA Financial Fair Play (FFP) and EPL Profit and Sustainability Rules (PSR)(though this has gotten many names and variations over the years). Though the common understanding might be that these rules are to prevent unfair economic advantage on the field, especially since "wages remain the best financial barometer of sporting performance", but actually the rules are meant to prevent clubs from taking on "excessive" debt based on yearly revenue and therefore risk going into bankruptcy. As an aside, for achieving competitive parity, the best example are the US sport leagues, where any team can theoretically win the championship. The charitable take on these rules are to prevent rich owners going on drunken spending sprees then leave the club with debt that cripples or kill the club long term. The uncharitable take is that the rules were created to protect the status quo where big clubs maintain their huge advantages (you will hear the term "red cartel" a lot to refer to the historically important and internationally known clubs Manchester United, Liverpool, and Arsenal). What's especially important to know is that many other clubs have been forced to extreme lengths to avoid these rules such as selling their players, selling their women's team. And if you're in breach, there are fines, embargo on registering full rosters, transfer bans, points deduction.
Between 2016 and 2018, a series of email leaks/hacks and followup news investigations pretty much shows MCFC has never complied with the rules, proactively and systematically engaged in what many consider "financial doping", and with an attitude perfectly summed up in a quote in one of the emails by an MCFC board member: "We can do what we want" (MCFC maintains that this quote is taken out of context). Europe soccer association (UEFA) had their own investigation and initially rule MCFC guilty in 2020, but was quickly overturned on appeal in by the Court of Arbitration for Sports due to essentially statute of limitations. The EPL has no such statute, but was considerably slower as unlike all previous case, MCFC fought every step of the way. The charges span 2009-2018, the investigation didn't conclude until 2023 when it referred its findings to an independent commission, the hearing spanned 3 months in 2024, and it took nearly another 2 years for us now to have a verdict for 114 guilty out of 115 charges. ‘sham contracts’, spending breaches and ‘disguised funding’. Sanctions have not been announced.
The UK Prime Minister had to chime in his concern (btw, his previous office was being the mayor of Greater Manchester)(UK and UAE has close relations). Fans of other clubs are outraged, especially ones that can point to direct monetary harm like losing players to MCFC or losing in the final, losing a spot to the Champions League. Since the EPL is actually the collection of the clubs, many observers note how the tenor of the EPL announcement indicates the emotions of the other owners aren't far off from their club fans. The coaches and players of other clubs are half-jokingly asking about getting their rightful cups and medals and therefore bonuses as well. MCFC released their own statement maintaining their innocence and will appeal "on the basis that the opinion [of the EPL] contains clear material errors, of law, principle and fact, and is unsafe." Etihad Airways (Abu Dhabi-based flagship airliner of the UAE and major sponsor of MCFC) warns of legal action against the EPL. Most MCFC coaches and players are communicating "wait and see until the process fully plays out, we trust the club". MCFC fans range in emotions, but most can at least argue on the immense benefit MCFC has had on Manchester.
Trade and Cheating
The emblematic example of this I can think of is China and its inclusion to the WTO in 2001. I am also not able to muster up the effort to write and collect links about this, but thankfully Information Technology and Innovation Foundation (ITIF) has a part 1 and part 2 on the "false promises" of China: "Nearly 20 years after joining the World Trade Organization, China remains woefully short of meeting a broad range of commitments and responsibilities, to the detriment of both its trading partners and the international economic system.".
Open Questions
What is the best way in which liberal-ish democracy-ish Western-aligned-ish polities should deal with its illiberal-ish totalitarian-ish non-Western-aligned-ish polities? What is the balance?
Is this just the gears of history turning oh so very slowly and that comeuppance will come due?
Personal conclusions
I'm glad I got away from those culture and societies and systems. I'm glad that even though the rich and the ruthless can fuck the small and the naive but at least in Western society there is a realistic way of fucking them back (even if it's hard, complex, slow, etc.). I feel a little guilty that I didn't stay and tried to make an impact or change something. I am reminded of the importance of the rule of law and norms and how this helps in interaction and not harming each other and redress grievances.
Edit 1
I think it was my fault for putting too much energy into the soccer section and making the other sections lopsided. But I really want to draw attention the open questions I have. The rules of the Western order is always breaking down but it seems there is thick molasses with which Western society and the leaders of society are reacting to the present situation of the day. Was the West naive about how a monarch from a monarchical society would not bend or break the rules on his own whims, or at least let his underlings do so? Was the West arrogant and greedy for the labor to think the Communist leadership would be convinced by the power of capitalism and liberal order and therefore would also acquiesce to the same rules and norms?
There is a quote that went around that is really funny and was certainly how I thought about Russia communists:
But after listening to enough Stephen Kotkin, I think I was wrong. Lenin, Stalin, Kruschev, and so on, they really thought they were social scientists, they really believed in it, no hope about it, no pretending about it, they just all thought the previous guy was wrong. They were all delusional, maybe not collectively (heh), but certainly the system led them all to be deluded in the same way. And someone who grew up in and benefit from an absolute monarchy with tribal-autocratic rule would also care not for democratic rules and norms. He certainly never suffered enough consequences. Even now, the EPL makes it very clear that redacted redacted is not guilty and never authorized any of these dealings.
There has been much harm and mistakes with regards to America's policy of the Cold War. Vietnam is probably the canonical example where there were multiple opportunities for Ho Chi Minh to be funded by the US and not Russia. But one can say the containment policy is at least a theoretically sound solution to the tolerance of the intolerance paradox. Say what you will by the EU but they got it right that there are strong rules and requirements about levels of corruption and elections for even looking at admission of a new member.
I'm still not sure what, specifically, Manchester City did wrong. This feels like some trademark European "regulatory superpower" bullshit.
I like the comparison to the Los Angeles Clippers-Kawhi Leonard scandal. The rules in the NBA are relatively straightforward. There is a maximum salary a team can pay a given player. It is against the rules for a team to provide compensation to a player outside of his salary. The NBA found that the Clippers paid third parties to pay Kawhi Leonard tens of millions of dollars in mostly-fake endorsement and sponsership deals, thus breaking the rules.
Uhmm, actually that's exactly the right comparison but instead of one player, imagine every player, and even the coaches too, over nearly a decade.
The rule in a nutshell is pretty simple: a club can only spend what it legitimately earns through ticket sales, TV rights, and legitimate commercial sponsorship, and the owner is not allowed to simply inject hundreds of millions of their own money to buy players if the club hasn't earned it.
Abu Dhabi (Clippers) pretty much had their airline Etihad Airways (their third party) sponsor MCFC with endorsements and sponsorship deals. And the emails showed that the best part is they recorded it down. They were explicit about how much money would Etihad Airways send over (about 10-12% year to year) and how much Abu Dhabi United Group (owner of MCFC) has to give Etihad Airways so that the money can then be sent to MCFC.
I guess it's just weird to me that the regulatory scheme is based on the internal cash flow structure within each club. If the goal is to maintain competative balance, then it would be more effective to regulate compensation paid to players and coaches instead.
Maybe this is my American capitalism-brain talking, but I don't see why it matters whether player salaries are financed by jersey sales or by capital infusion. If the club is a money pit, that is the club's problem.
I mentioned it in the following passage:
So you're exactly right, most people thought the rules are about "maintaining competitive balance", this might be true but it's only secondary importance to "maintaining the club's long term financial solvency". If the club is a money pit, that is the club's problem is true, but usually this means the livelihood and finances of local communities that these soccer clubs are from. In a way, we can have the other example and think about how the Chinese are just smarter and work harder so even though they're communist they're better at capitalism and therefore those industrial heartlands deserve to die, and I think many people would reconsider that calculation now.
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