PL charge City for alleged breaches of financial rules

[slbsn]

That's something Stefan and me never agreed on. He felt that as long as Etihad had paid the omeny and got fair value for that, it didn't matter. My argument was that this was disguised equity investment and it did matter. This argument wasn't tested though as it wasn't ADUG funding the majority of the Etihad sponsorship.

I keep getting quoted on this so let me be clear on my view on this.

The crux of the issue isn't where Etihad sourced the funds to fulfil their sponsorship obligations, as City assert that the sponsorship is genuine. The unproven allegation at the Court of Arbitration for Sport was that the sponsorship agreement was essentially a sham, with only a portion of the obligation truly being Etihad's. If proven, this would have serious implications.

However, the source of the funds arguably remains a secondary concern. If the sponsorship contract is not as detailed on its face, the origin of the funds—whether from ADUG, the owner, or elsewhere—becomes largely irrelevant. The more significant violation would be the presentation of a false agreement and false accounts.

Therefore, the key question isn't about the source of funds but rather the authenticity of the sponsorship agreement. UEFA attempted, unsuccessfully, to use the source of funds as evidence that the agreement was fake. When MCFC refer to "irrefutable" evidence, they are likely pointing to the contract itself, which simply outlines an obligation from Etihad.

If the contract is deemed genuine then the only other questions are whether Etihad is a related party (so far UEFA thought it was in 2014 but didn't go with that argument in 2020) and if it is whether the contract was fair value (UEFA accepted it was in 2014 but didn't run any argument in 2020).

Etihad is not declared a related party in MCFC accounts. In my view, unwinding 10 years of the audit treatment of Etihad by MCFC, would be very difficult save if the PL could prove that the auditors were deliberately not told of material facts about the relationship. It is highly unlikely the PL would be able to prove that and this is especially so because the auditors must have given due consideration to the point after UEFA raised it in 2014 (at the latest) and since. I suspect, it appears clearly and regularly as a point of discussion/risk/consideration with management in every audit meeting pack. This will have been even more apparent in the earlier years of the ownership due to the materiality of the Etihad sponsorship and therefore, the risk of material misstatement if the contract was incorrectly accounted for.

 

[Bluemoonadam]

Genuinely not trying to put a dampener on that optimism just for the sake of it, but wouldn't it be fair to assume he'd have plenty to say either way?

Exactly lol, win or lose the case you'd still have aplenty to say either way.

 

[nmc]

Genuinely not trying to put a dampener on that optimism just for the sake of it, but wouldn't it be fair to assume he'd have plenty to say either way?

No, in Middle East culture he’d be humiliated if we lost.

 

[nmc]

Well having read that instead of being confident I’m a little bit despondent now.

Don’t worry… @Prestwich_Blue was just playing with scenarios

 

[city2]

White and Jordan discussing interview on TS now

Pair of muppets, not got a clue about City.

 

[M12Blue]

I might be overly positive but the fact that Khaldoon said he would have plenty to say after the case is done gives me a lot of reassurance that we will win this.

Hopefully not free buses to York away ;)

 

[abu13]

I'll never get my head around this non-cooperation nonsense. It's like a turkey voting for Christmas. Why would anyone assist someone who is trying to fuck you over, burden of proof should be on the accuser/prosecution completely imho

Same here, i have always thought it really odd.

If the Police interview you over a crime you are entitled to reply with "No comment"

So say you are accused of a robbery, brought in for a Police interview and answer "No comment" to every question. Assume this goes to court but the prosecution can't provide any evidence to prove the case, the case gets dismissed and thats it, the judge doesn't dismiss the case but give you 2 years for not giving the police the answers they wanted.

 

[Tracking back]

I've always struggled with this "over-inflated sponsorship deal" debate.

Surely it's up to the sponsor how much they feel the deal is worth?

I personally never heard of the Etihad group prior to 2008.

I'm pretty sure that it's as much of a household name as Percil these days.

 

[Cobwebcat]

Arguments aside and given City’s subsequent successes I’d say all our sponsors have had unbelievable value for money.

 

[Mr-Mertle]

I've always struggled with this "over-inflated sponsorship deal" debate.

Surely it's up to the sponsor how much they feel the deal is worth?

I personally never heard of the Etihad group prior to 2008.

I'm pretty sure that it's as much of a household name as Percil these days.

The Etihad one in particular has no legs to stand on. Both UEFA and CAS determined the deal with Etihad is fair value and aren't related parties. I'm sure the PL's argument is that they ARE related parties, but a tough hurdle to climb.

 

[bennyboy]

Hopefully not free buses to York away ;)

Not enough buses in the world for that one.

 

[halfcenturyup]

Well having read that instead of being confident I’m a little bit despondent now.

Relax. PB was talking hypothetically.

Afaik, nobody is questioning the value of the sponsorships. And the club proved to CAS that ADUG didn't pay any money to Etihad.

(You can stop reading here if you like)

But, if you have a moment, just consider what the PL is suggesting. They are saying Etihad entered into a sponsorship agreement at fair value but could only pay 8 milion of it and had to get funds from ADUG for the other 60 million. This is the Etihad that is funded by the government of Abu Dhabi, not known to be short of cash, and that funded losses at that time of a billion a year. They would make that arrangement for 60 million? It doesn't make any sense to me, no matter what evidence they think they have.

Add to that my opinion, that, assuming we accept the sponsorship was at fair value, the accounts give a true and fair view just as they are, then even that doesn't really matter. For reference, the club's accounts don't have to be either accurate (no accounts are accurate, they all have things wrong with them), or give a true and fair view of the club's financial position for PL purposes. They have to give a true and fair view to any "normal" reader of the accounts, say someone potentially trying to invest in the club. To that reader of the accounts, showing a fair value sponsorship as equity would actually distort the view given by the accounts, because they wouldn't show the true potential for income generation. Even if Mansour, in my opinion, delivered bags of cash over to Etihad himself on the backseat of his Maserati. Because it is the fair value of the contract and the fact the contract was fulfilled by both parties that determines the true and fair accounting treatment, not how it was funded. The PL may want a different treatment for their purposes, but the accounts, imho, are fine just as they are.

 

[Stoned Rose]

Same here, i have always thought it really odd.

If the Police interview you over a crime you are entitled to reply with "No comment"

So say you are accused of a robbery, brought in for a Police interview and answer "No comment" to every question. Assume this goes to court but the prosecution can't provide any evidence to prove the case, the case gets dismissed and thats it, the judge doesn't dismiss the case but give you 2 years for not giving the police the answers they wanted.

S49 of the Regulation of Investigatory Powers Act 2000 likes this.

 

[abu13]

S49 of the Regulation of Investigatory Powers Act 2000 likes this.

I have absolutely no idea what this is :)

 

[denislawsbackheel]

I've always struggled with this "over-inflated sponsorship deal" debate.

Surely it's up to the sponsor how much they feel the deal is worth?

I personally never heard of the Etihad group prior to 2008.

I'm pretty sure that it's as much of a household name as Percil these days.

Do you mean Persil?

 

[schfc6]

Didn’t know where to put this. But FFP changing with the wind in Europe.

I’d joke that they’ll come after us for inflating the Sterling fee if I didn’t think they might..

UEFA to introduce emergency rule blocking clubs from inflating transfer fees

The governing body's executive committee are set to vote on amendments to financial fair play rules during meeting next week and reports suggests a new proposal in wake of Juventus scandal could see an end to clubs selling players for more than the market says they are worth

www.mirror.co.uk

 

[journolud]

It might put a stop to the rags getting ripped off paying over the odds for shite players

 

[abu13]

Didn’t know where to put this. But FFP changing with the wind in Europe.

I’d joke that they’ll come after us for inflating the Sterling fee if I didn’t think they might..

UEFA to introduce emergency rule blocking clubs from inflating transfer fees

The governing body's executive committee are set to vote on amendments to financial fair play rules during meeting next week and reports suggests a new proposal in wake of Juventus scandal could see an end to clubs selling players for more than the market says they are worth

www.mirror.co.uk

The whole thing is an utter clusterfuck, while FFP sounds reasonable it is also anything but fair.

Uefa and the PL have dug a hole they can't get out of now.

 

[Mr Fraser]

Unless there is buy out clause surely acceptable fee decided by club until out of contract

 

[tweety]

Just bin ffp, football managed quite well in the previous 120 years. Brought in to hobble any new investment that threatened the G14.