It seems that Terry's main defence was that he did say it however it was in response to something he thought he heard Ferdinand say. The FA will continue an investigation so Terry must be weary, this shows a sign that the FA have major intent in cutting out racism.
The magistrate Howard Riddle said he had 'heard plenty of evidence to suggest Mr Terry was not racist' however it seems that it might hasve been more to do with the fact that he didn't hear enough convincing evidence.
Here is the accusations and evidence:
On the pitch
The game took place at QPR's Loftus Road ground in London on 23 October 2011.
Chelsea were down to nine men in the game, and Mr Ferdinand and Mr Terry began trading insults over a penalty claim, the court heard.
The QPR defender said he was angry at Mr Terry trying to get a penalty and "he barged me in the back for no reason".
Mr Ferdinand told the court Mr Terry insulted him with sexual swear words and made a gesture as if to say his breath smelled.
"I was very angry and I was upset”
John Terry
Mr Ferdinand said he asked how Mr Terry could say that,
because "you shagged your team-mate's missus" and he then swore back at the
Chelsea player.
This was a reference to Mr Terry's alleged affair with Wayne Bridge's ex-girlfriend, Vanessa Perroncel.
The court heard that Mr Ferdinand then jogged down the pitch, while making a fist gesture, intended for Mr Terry, to imply sex.
It also heard that Mr Terry has accepted how, when both players were around the half-way line of the pitch, he used the words "f***ing black c**t".
But the court also heard that Mr Terry maintains he was only sarcastically repeating what Mr Ferdinand incorrectly thought he had said.
During Mr Terry's testimony in Westminster Magistrates Court, he said that as the pair traded insults, he heard Mr Ferdinand using this racist phrase.
Mr Terry told the court he thought Mr Ferdinand was accusing him of using the phrase.
"I was very angry and I was upset. I replied 'a black c***, you f***ing kn**head'".
After the match
After the match, Mr Ferdinand told the court, Chelsea defender Ashley Cole told him: "You can't talk to JT [John Terry] like that."
George Carter-Stephenson QC, defending Mr Terry, gave the court further details about the exchange between Mr Cole and Mr Ferdinand.
This included Mr Cole asking Mr Ferdinand: "Did you think JT called you a black c***? You know he isn't like that."
"It's handbags, innit - it's what happens on the pitch”
Anton Ferdinand
Immediately after the match, Mr Ferdinand did not think
that Mr Terry had used racist words, the court heard.
Later, Mr Terry asked a steward to get Mr Ferdinand from the QPR dressing room.
"Mr Terry said, 'Do you think I racially abused you?'. I was like, 'No'," Mr Ferdinand told the court.
"I said 'No, that never came out of my mouth'. Then Ashley Cole popped his head round and said: 'Yeah, didn't you say that to me?' I said: 'I didn't say that at all'."
Mr Ferdinand told the court: "It's handbags, innit - it's what happens on the pitch," and said he shook hands with Mr Terry.
Video footage
Later still after the match, Mr Ferdinand's then-girlfriend showed him a clip of the exchange with Mr Terry, which was posted on YouTube. It was then that he believed Mr Terry had used a racist term.
Mr Ferdinand told the court that if he had realised this at the time he would have told officials.
He said: "I would have been obviously very hurt and I probably wouldn't have reacted at the time because, being a professional, you can't do that. I probably would have let the officials know what happened and dealt with it after the game.
"When someone brings your colour into it, it takes it to another level and it's very hurtful."
Terry's statement
Mr Terry made a statement to police last November, in which he said he was offended by the accusation that he had used racist language.
He said his words to Mr Ferdinand were meant to make it clear that he had not used a racist insult.
The statement read: "Whilst footballers are used to industrial language, using racist terms is completely unacceptable whatever [the] situation.
"I was completely taken aback by this remark as I have never been accused of something like that and I did not take his remark lightly at all, and took strong offence to his suggestion."
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