Will Guardiola stay? Could two-year ban be overturned? How Monday's CAS verdict will affect Man City

Manchester City are due to discover the outcome of their appeal against a two-season European ban from Uefa on Monday at 9.30am, when the Court of Arbitration for Sport (CAS) returns its verdict on the landmark case. Telegraph Sport looks at three potential scenarios facing City, and the consequences for the club and beyond.

1. City’s two-year ban is upheld by CAS

This is City’s worst nightmare, one that could have severe repercussions from a financial, sporting and reputational standpoint.

The club earned £83 million in television and prize money from the Champions League last season, when they reached the quarter-finals, plus a further £10m in matchday income.

No Champions League football for two seasons could cost the club in excess of £200m once Uefa’s €30m fine is also factored in. There is an added threat of sponsors, deprived the huge exposure that comes with Champions League football, activating clawback clauses in their contracts if City are not competing in Europe.

The timing for City could not be worse, coming on the back of the Covid-19 crisis, which has already decimated matchday income and forced rebates to broadcasters.

Pep Guardiola has planned a rebuild of his squad this summer after a meek surrender of the Premier League title to Liverpool, the £45m sale of Leroy Sane to Bayern Munich and the impending departure of David Silva, 12 months after Vincent Kompany left. But the City manager could find there is significantly less money to spend and may even be forced to sell one of his star players.

Kevin De Bruyne, City’s midfield talisman, said in May that he would consider his future if the ban is upheld, although reports in Belgium in recent days suggested the player was happy at the club and would not agitate for a move. There are also questions about who could afford a large fee and the 29-year-old’s £350,000-a-week wages. England forward Raheem Sterling, who has attracted interest from Real Madrid, may assess his options.

Such a scenario could also weaken City’s attempts to keep hold of Guardiola. The Catalan has vowed to see out the remaining year of his contract, regardless of whether there is Champions League football at the Etihad next season. Yet he might be reluctant to extend his deal beyond 2021 if asked to work under much tighter financial constraints and with no European football on offer.

The problems may not end there. The Premier League has also been investigating City’s finances and seems to have been waiting for CAS to return its verdict before announcing its position. The Premier League has its own Financial Fair Play (FFP) rules and permits far greater losses than Uefa, who accused City of “serious breaches” of its FFP rules by overstating sponsorship income between 2012 and 2016.

But if CAS rejects City’s appeal and determines that they deceived Uefa, the club could be at risk of a points deduction from the Premier League if they are deemed to have breached section J7 of the competition’s handbook covering “Uefa Club Licence Applicants”. A points deduction, if applied next season, would deal a potentially fatal blow to City’s hopes of wresting the title back from Liverpool.

If CAS side with Uefa, City would only be able to appeal to the Swiss federal courts and generally only if a CAS arbitration panel made a clear error in law or the proceedings were deemed unfair.

2. CAS reduce the suspension to one season

This is what many have guessed may be the likely outcome, even if the reality is no one truly knows what decision a panel comprising Portuguese lawyer, Rui Botica Santos, Professor Ulrich Haas, a law professor from Germany, and the Paris-based QC, Andrew McDougall, will arrive at after hearing evidence via video link over three days last month.

Some of the same headaches will still apply whether a ban is one year or two but a shorter suspension would be much easier to stomach financially given the wealth of City’s owners, and certainly improve City’s prospects of persuading Guardiola to sign a new contract.

City’s Abu Dhabi hierarchy could redirect funds generated from the sale last November of a £389m stake in their City Football Group empire to the US private equity giant, Silver Lake, to help cover any cash shortfalls brought about by an absence of Champions League football. They have already been doing that to help them through the coronavirus crisis, not least after attempts to strike wage cuts with players were abandoned.

Guardiola may find that, with a reduced budget, he will be unable to sign the three to five players he has been targeting and instead have to settle for a centre half and left back only as he prioritises the reconstruction of a fragile defence. Whether City have a harder time trying to recruit with no Champions League football to offer remains to be seen. It was not an obstacle when they bought David Silva and Yaya Toure in 2010 and City may be able to argue to potential suitors that their prospects of winning back the Premier League title would be enhanced with no European distractions.

A ban would increase the pressure on City to deliver the European Cup this season although Guardiola might also seek to exploit any perceived injustice as an added means of motivation for his squad. City are due to play Real Madrid in the second leg of their Round of 16 tie next month.

The obvious beneficiaries of City being denied entry to the Champions League next season would be their Premier League rivals. With City likely to finish second behind Liverpool, their Champions League spot would go to the fifth-placed team in the Premier League, which is currently Manchester United. That, in turn, would likely create an extra Europa League placing.

3. The ban is overturned

City have long insisted they have no case to answer and, certainly on the basis of the bullish stance they are adopting in public, this is the outcome they are expecting. A successful appeal would be a bitter blow to City’s domestic and European rivals — on and off the pitch. Fifth place would no longer bring with it a Champions League spot this season and Guardiola, armed with the finances to oversee a full rebuild of his ageing squad, may feel re-energised and more inclined to sign a new contract. Top players would see no need to leave and others might be eager to be part of a Guardiola revamp.

Manchester United and Chelsea are hoping to mount serious title challenges in the next season or two but a new, improved City would represent by far the biggest threat to Liverpool. Whether such news would assist City’s Champions League prospects is impossible to determine now but it would come as a significant boost and only improve morale among the squad. It could also severely reduce or even end the prospects of City being hit by heavy sanctions from the Premier League once they conclude their investigation.

The biggest losers would be Uefa. A City victory could deal lasting damage to the credibility of their FFP rules and potentially undermine the European governing body’s standing.