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I think if they did that, City would go legal and the whole FFP concept could be questioned...
I think UEFA would run scared of that, because whilst there are clearly examples of non-compliance, for the most part it's working. Many legal scholars have argued that the FFP rules are in breach of several EU laws, and at some point, it's going to be tested in court. Consequently, I think UEFA are more likely to go down the fine route again, albeit much higher than last time.
Champions League ban?
If you can't dive with the sharks, get outta the ocean