PL charge City for alleged breaches of financial rules

[City_Sean]

One aspect we just don't is will MCFC park the legal bus or go on the attack ? There is plenty of historical evidence how competitors manavoured their employees into positions of influence to target rules at MCFC. Just read the comments from Gill ex MUFC
CEO as he takes up his new exciting role in UEFA. In hindsight its so obvious what his intentions are...

Manchester United's David Gill elected to European Club Association

Manchester United chief executive joins Real Madrid president on the 15-man board

www.theguardian.com

I think people really need to drop this idea that City "will go on the attack".

They won't, if they were going to it would have been better doing so before the clubs name was reputationally damaged.

 

[M18CTID]

Clearly that's based on the Mancini Al Jazira contract and I assume they're saying we falsified the accounts by keeping that £1.75m off the books. In the first full year of Mancini's tenure that was about 1% of our turnover, plus we lost nearly £200m.

Even in the event that the commission find that was a dodge, so what? It's completely insignificant. But why would we even try to hide £1.75m in the context of that scale of losses? It's hardly on the Enron scale of fraud.

I presume the PL rule they're citing however is the one where we have to give full details of the manager's remuneration, hence the charge. But they'd need to show that Mancini (and City) had no intention of him fulfilling that contract.

Like you say Col, it makes no sense whatsoever to hide £1.75m when we were making huge losses at the time and weren't even subject to FFP anyway. Also, IIRC, wasn't Mancini already working for Al Jazira some months before he was appointed our manager?

 

[M18CTID]

That's a question I was pondering myself last night. On the one hand, if Etihad paid us £50m, and we recorded £50m revenue, then that's clearly not fraudulent, regardless of the source of Etihad's funds. But if SM gave us all or most of the money, then we'd have presumably broken FFP rules.

This is the point (the source of Etihad funding) that Stefan and me didn't agree on. He argued it didn't matter where the money came from but my view was that it did, as far as FFP was concerned.

Yes, it did matter where the money came from. But like the Mancini thing, it makes zero sense whatsoever for us to do what we're being accused of. Why would SM need to provide it when the option was always there for Etihad to legitimately use central funds?

 

[KS55]

Yes that's a clear concept to help follow it but if I followed the arguments city were saying it wasn't even SM to the sponsor, it was HH someone different entirely.

A likely story. The weakest part of our defence. Best left out and say the email just means HH (whoever that is) will use his influence.

 

[Prestwich_Blue]

A likely story. The weakest part of our defence. Best left out and say the email just means HH (whoever that is) will use his influence.

It really wasn't, as the document used in the Open Skies case pointed towards 'HH' potentially being Sheikh Mohammed, or at least one of the senior members of the royal court that deal with financial stuff. And I'm sure that latter one was correct.

 

[petrusha]

Like you say Col, it makes no sense whatsoever to hide £1.75m when we were making huge losses at the time and weren't even subject to FFP anyway. Also, IIRC, wasn't Mancini already working for Al Jazira some months before he was appointed our manager?

It was reported when we appointed Mancini that he already had a consultancy agreement with Al-Jazira. In some quarters, that club's entry into the arrangement was interpreted as a move by Mansour to ensure that Mancini didn't take another job before City were ready to sack Hughes and appoint the Italian.

However, that would seem to presuppose that Mancini had been tabbed by City as the first choice to succeed Hughes well in advance. In fact, though he did have an impressive track record, we spoke to two other managers before offering him the job. These were Mourinho and Guus Hiddink, IIRC, with the former making clear that he viewed City as a stepping stone at the time and the latter preferring the easier life of international management.

Surely that refutes the idea that the Al-Jazira arrangement was entered into purely to get Mancini to City? And if it wasn't, then presumably it was a genuine relationship, so why shouldn't it have continued when he was with us?

 

[hammocity]

A soft loan wouldn’t count as revenue revenue helps with FFP

Abramovich was still topping his soft loan up after FFP.

 

[KS55]

It really wasn't, as the document used in the Open Skies case pointed towards 'HH' potentially being Sheikh Mohammed, or at least one of the senior members of the royal court that deal with financial stuff. And I'm sure that latter one was correct.

I wasn’t convinced. Plenty of references elsewhere to HH meaning Mansour.

 

[KS55]

Did we not agree with UEFA not to increase the Etisalat & Aabar deals back in 2014 as part of the settlement?

Yes. I assume that was part of UEFA accepting our argument for the future.

 

[Centurions]

I think people really need to drop this idea that City "will go on the attack".

They won't, if they were going to it would have been better doing so before the clubs name was reputationally damaged.

Out of interest what makes you say this? When do you think we should have 'gone on the attack'?

 

[KS55]

Why would equity funding, regardless where it comes from, be illegal and invalidate the accounts outwith of the poxy Premier League made up rules? Any company Director can put whatever funds they want into a business which could make up for losses, the Tax implication would be positive for the club as far as HMRC us concerned IE make a loss, don’t pay tax on profits.

Agreed tax losses can be run down against future profits for tax purposes. City had a whole raft of them and we paid no corporation tax in subsequent profitable years. Not sure where we are up to with that now.

 

[KS55]

I don’t think fair value has anything to do with anything mate as Etihad isn’t a related party

Correct but see the new PL rules.

 

[hammocity]

Agreed tax losses can be run down against future profits for tax purposes. City had a whole raft of them and we paid no corporation tax in subsequent profitable years. Not sure where we are up to with that now.

We have consistently made a small profit over the past few years but the affected Covid seasons will probably give us (and all others) the opportunity to not pay Corporation Tax as per your post.

 

[KS55]

I agree and our auditors also an agree but I think others more clued up on here who also agree have said that UEFA have had advice to opposite affect.

I don’t think he is but if the Premier league are alleging that the Sheik is funding sponsorship and if they could prove it would that not make then defectors related party ? Even if they wouldn’t normally meet the criteria I mean non related parties wouldn’t inflate sponsorships for companies they where sponsoring via funds from the owner of the company they where sponsoring

I think if the Premier league had proof of anything we would be in trouble a hiding the source of the money and b not calling it related even if we could argue it was not above market rate.

You are rearing the ugly prospect of PL rules clashing with UEFA rules. We agreed with UEFA to follow a certain course of action but if it is part of the PL case that that action was incorrect, we have a right to do on our hands.
The newPL rules on owner funding differ from UEFA rules.

 

[Maly]

Correct but see the new PL rules.

Aren’t the new rules only for new, not existing sponsorships tho?

 

[SilverFox2]

We have consistently made a small profit over the past few years but the affected Covid seasons will probably give us (and all others) the opportunity to not pay Corporation Tax as per your post.

Is there a tax benefit regarding being part of a Holding Company as well?

 

[diamondmonkey]

Clearly that's based on the Mancini Al Jazira contract and I assume they're saying we falsified the accounts by keeping that £1.75m off the books. In the first full year of Mancini's tenure that was about 1% of our turnover, plus we lost nearly £200m.

Even in the event that the commission find that was a dodge, so what? It's completely insignificant. But why would we even try to hide £1.75m in the context of that scale of losses? It's hardly on the Enron scale of fraud.

I presume the PL rule they're citing however is the one where we have to give full details of the manager's remuneration, hence the charge. But they'd need to show that Mancini (and City) had no intention of him fulfilling that contract.

Thanks for the repky

Do you think the 2009-2013 charges are only concerning Mancini’s contract? That you quite rightly say is inconsequential.

Also important to highlight that the PL only charged us with breaking their FFP rules for 3 seasons 2015-2018.

As well as not complying with UEFA FFP regs 2013 - 2018. Though I’m not sure UEFA will want to reinvestigate that period again.

 

[Prestwich_Blue]

I wasn’t convinced. Plenty of references elsewhere to HH meaning Mansour.

There are lots of HH's in Abu Dhabi but even if it was Mansour, the email said "HH will arrange funding", not "HH will provide the funding" or "It will be funded by HH via ADUG".

So Sheikh Mansour or one of his staff could pick up the phone, ring another HH and arrange for the Executive Council to provide the funding to Etihad. But even in the most extreme case, where SM clearly provided the additional funding from ADUG, as long as Etihad were getting full value for the money, and the sponsorship was seen as fair value (which CAS said it was) then even that might not be a problem, as owners are allowed to sponsor clubs under FFP rules. So in that last scenario, which Stefan and me disagreed slightly on, I'd say he was more likely to be right. I always said that if we agreed Etihad was a related party, then there's nothing UEFA could have done.

 

[Prestwich_Blue]

Thanks for the repky

Do you think the 2009-2013 charges are only concerning Mancini’s contract? That you quite rightly say is inconsequential.

Also important to highlight that the PL only charged us with breaking their FFP rules for 3 seasons 2015-2018.

As well as not complying with UEFA FFP regs 2013 - 2018. Though I’m not sure UEFA will want to reinvestigate that period again.

It's mostly the Mancini contract but there might be some player image rights stuff in there as well.

 

[KS55]

There are lots of HH's in Abu Dhabi but even if it was Mansour, the email said "HH will arrange funding", not "HH will provide the funding" or "It will be funded by HH via ADUG".

So Sheikh Mansour or one of his staff could pick up the phone, ring another HH and arrange for the Executive Council to provide the funding to Etihad. But even in the most extreme case, where SM clearly provided the additional funding from ADUG, as long as Etihad were getting full value for the money, and the sponsorship was seen as fair value (which CAS said it was) then even that might not be a problem, as owners are allowed to sponsor clubs under FFP rules. So in that last scenario, which Stefan and me disagreed slightly on, I'd say he was more likely to be right. I always said that if we agreed Etihad was a related party, then there's nothing UEFA could have done.

Yes. I wasn’t suggesting that we had done anything wrong, merely that the insistence that HH could not be Mansour sounded a bit weak. As you point out, it was not necessary anyway.