UEFA FFP investigation - CAS decision to be announced Monday, 13th July 9.30am BST

[roxy]

Interestingly, as a private company City aren't even obliged to release their accounts publicly but they do in the interests of transparency. As a publicly quoted company United are so obliged but keep a shedload of murky financial secrets hidden inside a Cayman Islands bank which will never see the light of day. Oh the irony.

All companies have to file accounts at Companies House.

 

[MillionMilesAway]

All companies have to file accounts at Companies House.

I thought that.
Also it would be a bit strange to have to supply them for FFP but not UK law.

 

[laserblue]

All companies have to file accounts at Companies House.

You're right but what I was driving at is that private companies aren't obliged to release the accounts publicly themselves. City announce their results to the world.

 

[Asa's left peg]

I was just reacquainting myself with the make up of the City board and there is some serious legal and accounting weight on there, as well those that are well know to us fans - Galassi particularly sounds an interesting guy. The one that surprised me was Mohamed Al Mazrouei, who is Chairman of Etihad Airways. I am still trying to work out whether that will work to our advantage or not in the investigations to come, if they ever get past procedural issues.

 

[Blue Feather]

Wasn’t it on early afternoons if i recall haha yeah the ropey acting and wooden sets ahh those were the days ..

Yeah, 1.30pm...ish? One of those progs watched when off school

 

[KS55]

I was just reacquainting myself with the make up of the City board and there is some serious legal and accounting weight on there, as well those that are well know to us fans - Galassi particularly sounds an interesting guy. The one that surprised me was Mohamed Al Mazrouei, who is Chairman of Etihad Airways. I am still trying to work out whether that will work to our advantage or not in the investigations to come, if they ever get past procedural issues.

That would depend on whether Etihad was represented on our board at the relevant time. I thought that they were not, but I could be wrong. If they were, it might call into question whether the sponsorship were related, but Uefa ruled at the time that it was not.. What is called into question by the current enquiry is who paid the sponsorship. We and Etihad said it was Etihad from their own resources. Leaked emails suggest otherwise. Hence the accusation of deception.

 

[Gremlin]

That would depend on whether Etihad was represented on our board at the relevant time. I thought that they were not, but I could be wrong. If they were, it might call into question whether the sponsorship were related, but Uefa ruled at the time that it was not.. What is called into question by the current enquiry is who paid the sponsorship. We and Etihad said it was Etihad from their own resources. Leaked emails suggest otherwise. Hence the accusation of deception.

it's pretty common for top people to be directors of more than one company - particularly non-executive directors, which this guy is at MCFC Ltd. Doesn't make them related parties - that's a legal accounting definition.

 

[KS55]

it's pretty common for top people to be directors of more than one company - particularly non-executive directors, which this guy is at MCFC Ltd. Doesn't make them related parties - that's a legal accounting definition.

Correct, except that UEFA have their own interpretation of IS 25, which, if you recall, they used to declare our other sponsorships such as aabar related. That's what Khaldoon was referring to when he said that we had a fundamental disaggreement with their asssessment.. I'm told by those who know accountancy that there is some wriggle room in interpreting IS 25 and that is partly why we took a pinch, to avoid a long drawn out wrangle.
I don't know what the difference was.
PS EDIT. Bayern whose three main sponsors are both shareholders and directors don't seem to have a problem !

 

[petrusha]

Correct, except that UEFA have their own interpretation of IS 25, which, if you recall, they used to declare our other sponsorships such as aabar related. That's what Khaldoon was referring to when he said that we had a fundamental disaggreement with their assessment.

UEFA's auditors declared that they were related but UEFA didn't follow through with that. The settlement agreement treated them as unrelated, in return for City undertaking not to increase those two sponsorships for a specified period (either two or three years, IIRC).

 

[Centurions]

Correct, except that UEFA have their own interpretation of IS 25, which, if you recall, they used to declare our other sponsorships such as aabar related. That's what Khaldoon was referring to when he said that we had a fundamental disaggreement with their asssessment.. I'm told by those who know accountancy that there is some wriggle room in interpreting IS 25 and that is partly why we took a pinch, to avoid a long drawn out wrangle.
I don't know what the difference was.
PS EDIT. Bayern whose three main sponsors are both shareholders and directors don't seem to have a problem !

The fundamental disagreement was in relation to the pre FFP wages and how they were allowed to be offset, we used the original toolkit but UEFA decided it wasn't clear enough and republished it but crucially, after we'd submitted our figures. using the original toolkit we would have scraped through, the new version caused us to just fail so that we couldn't offset them which had the effect of making us fail it massively.

 

[petrusha]

The fundamental disagreement was in relation to the pre FFP wages and how they were allowed to be offset, we used the original toolkit but UEFA decided it wasn't clear enough and republished it but crucially, after we'd submitted our figures. using the original toolkit we would have scraped through, the new version caused us to just fail so that we couldn't offset them which had the effect of making us fail it massively.

This is broadly true but there's a minor, nitpicky point. We were always going to fail FFP because we were miles outside the acceptable deviation for the initial monitoring period, but UEFA had provided that teams would avoid punishment if they could demonstrate that they'd have been within the acceptable deviation after wages paid under player contracts predating 2010 were deducted. For what were presumably PR reasons, we tried desperately to make that cut but, as you say, were sawn off at the knees by the retrospective amendment to the rules.

I'd say it's probably a good job UEFA did change the rules, ironically. The settlement agreement allowed us to start again in 2014, with a target relating only to the next two years - as opposed to having to factor in losses from previous years in the context of a three year assessment period. But most important is the fact that now, with them coming after us in the wake of the Der Spiegel coverage, without the settlement agreement, everything from 2014 would have been up for grabs in terms of making a case against us. It would definitely have made their life much easier in the current situation.

 

[kaz7]

We’ve been here before. We might not be arsed if we get banned from the CL, but the players sure as hell will. Let’s say the ban is 2 or 3 years, you think Kev, Raz, Bernie, etc, won’t be influenced by that in terms of whether they’d want to stay at the club? They aren’t City fans. And notwithstanding that, the revenue the competition generates for us is huge.

There’s lots of fighting talk about how UEFA and the clubs behind this crooked sham will be “fucked” if they punish us, but if we don’t have recourse to the Courts to sue their arses or contest the legality of FFP, I don’t see how they will be

It won't be 2 or 3 yrs though will it? plenty of players play out of the CL for 1 season with no problem

 

[KS55]

The fundamental disagreement was in relation to the pre FFP wages and how they were allowed to be offset, we used the original toolkit but UEFA decided it wasn't clear enough and republished it but crucially, after we'd submitted our figures. using the original toolkit we would have scraped through, the new version caused us to just fail so that we couldn't offset them which had the effect of making us fail it massively.

That's not the full story. Yes to the wages thing, but Khaldoon specifically mentioned the IAS 25 issue as well.

 

[KS55]

UEFA's auditors declared that they were related but UEFA didn't follow through with that. The settlement agreement treated them as unrelated, in return for City undertaking not to increase those two sponsorships for a specified period (either two or three years, IIRC).

I see, thanks. I knew we had undertaken that hold on the amount, but I thought they were still classified as related. Seems like a bit of a deal there.

 

[petrusha]

I see, thanks. I knew we had undertaken that hold on the amount, but I thought they were still classified as related. Seems like a bit of a deal there.

If they'd classed them as related, they'd surely have reduced them in line with the auditors' recommendations as they did genuinely seem inflated (based on the Der Spiegel revelations on the point). I ought to say that it's my interpretation rather than fact, but I think it's probable that they slid back on the related party point, where their argument was rather contentious, rather than on the valuation, where the case seemed stronger. The settlement agreement was definitely a deal - and quite an advantageous one for us!

 

[Metalartin]

@Parisian brings up an important point about how much discrepancy there can be between UEFAs own approved auditors. I don't know much about how the calculations are done but something seems very off with the way they can change their minds and start decreasing the fair market value estimations, at a time I thought PSGs stock would have risen(Neymar and Mbappé alone attract big interest).

It goes without saying Der Spiegel(and UEFA judging by the way they have behaved) will choose the very lowest ones they can find. I don't blame City for wanting to challenge any claims that any of our sponsors are related, even the smaller ones if there is any case to say they aren't.

 

[dickie davies]

If they'd classed them as related, they'd surely have reduced them in line with the auditors' recommendations as they did genuinely seem inflated (based on the Der Spiegel revelations on the point). I ought to say that it's my interpretation rather than fact, but I think it's probable that they slid back on the related party point, where their argument was rather contentious, rather than on the valuation, where the case seemed stronger. The settlement agreement was definitely a deal - and quite an advantageous one for us!

We said they weren't related
UEFA said they were
They found us guilty of breaking FFPR anyway
We agreed a settlement
We also agreed not to increase the sponsorship from those two companies

But it was never confirmed by UEFA that they were not related parties

 

[petrusha]

We said they weren't related
UEFA said they were
They found us guilty of breaking FFPR anyway
We agreed a settlement
We also agreed not to increase the sponsorship from those two companies

But it was never confirmed by UEFA that they were not related parties

If UEFA had accepted that the sponsors were related parties, the two sponsorships in question could have been reduced to fair market value, which was assessed by UEFA's auditors as about GBP 12 million less annually than was actually paid across the two deals. UEFA chose not to reduce the value even though they clearly had issues with those sponsorships, as is evidenced by the fact that they negotiated for an undertaking with respect to them to be included in the settlement agreement.

UEFA don't need to confirm anything. Their actions tell us all we need to know, and clearly point to UEFA backing down from the position that state-owned UAE sponsors are related parties.

 

[Exeter Blue I am here]

It won't be 2 or 3 yrs though will it? plenty of players play out of the CL for 1 season with no problem

We don’t know what it will be. The original leak said 1 year “minimum”. I wouldn’t put anything past that spiteful shower of bastards. Personally though I’m hoping for no ban, a hundred million in compensation, and anyone with the surname Harris jailed! Bit tough on Anita, but them’s the breaks....

 

[MillionMilesAway]

If UEFA had accepted that the spo0nsors were related parties, the two sponsorships in question could have been reduced to fair market value, which was assessed by UEFA's auditors as about GBP 12 million less annually than was actually paid across the two deals. UEFA chose not to reduce the value even though clearly had issues with those sponsorships, as is evidenced by the fact that they negotiated for an undertaking with respect to them to be included in the settlement agreement.

UEFA don't need to confirm anything. Their actions tell us all we need to know, and clearly point to UEFA backing down from the position that state-owned UAE sponsors are related parties.

That seemed pretty clear to me - no deal was re-valued, so there cannot have been any related party decision.