PL charge City for alleged breaches of financial rules

[halfcenturyup]

There's no doubt that deliberate false accounting, like at Wirecard who claimed a seemingly fictitious €1.9bn cash balance on their balance sheet, or at Enron, or claiming revenue or commission from contracts that aren't yet signed, is a serious, and potentially criminal, offence.

But I spent enough years in accountancy and you know, as a CEO, that you may have to choose between different interpretations of accounting standards (or other practices) on how to present figures. That's why the law uses the phrase "true and fair", rather than insisting on 100%, to-the-penny accuracy. Things like valuation of stock, WIP, goodwill, intellectual property, and other intangible assets, investments and joint ventures, etc. That's a completely different kettle of fish to deliberate, false accounting.

As you've rightly said before, City would've had to pull the wool over a lot of experienced financial professionals' eyes if they concealed the things they did, knowing they were wrong and completely misleading. Like you, I find that very difficult to believe and I absolutely agree we'd deserve everything we got if that was the case.

But if that wasn't the case, then what was? The deal with Fordham was, in my opinion, a way of getting a few million extra pounds of revenue onto the books (rather than getting expenses off the books) in an attempt to creep within what we thought would be the maximum allowable loss that would see us escape sanction. We know from the Der Spiegel emails that Jorge Chumillas signalled there was still going to be a shortfall in the 2013 financial year. In the end, UEFA's machinations over the FFP mitigation calculation of wages ended that prospect. We must assume that appropriate legal and financial advice was taken over that Fordham arrangement.

We don't know what was or wasn't reported to UEFA regarding the image rights payments. My guess is that UEFA noticed they'd gone off the FFP spreadsheet around 2015. We do know they approached us about this and the arrangement ended for good in 2018. Let's take the view that we presented our case to UEFA and they said "Yes, we understand you've acted within the letter of the law, but not the spirit. As it wouldn't have made any difference to FFP anyway, we'll call it quits as long as you report the figures properly going forward". And we did, whereupon it made no sense to continue the Fordham arrangement, and the company was liquidated.

This is why I take issue with the black-or-white view that we're either totally innocent of wrongdoing or have knowingly committed fraud on a grand scale over a number of years.

Last time you made this point, I said "Absolutely correct" and got blasted by @petrusha, so I will be more careful this time. :)

For Etihad, if they are still claiming, as we think they are, that the majority of the sponsorship was paid to Etihad by Mansour, then I think there is no doubt that they are effectively alleging fraud, for all the reasons petrusha quite rightly put forward last time. Personally, I am not sure that it affects the true and fair view given by the accounts, which is actually the only substantial rule the PL can allege the club has breached for this. But I seem to be alone on that. I do, though, think the alleged act would effectively meet the legal definition of fraud.

The others, for the reasons you state, I agree with you. The accounting seems to have been in accordance with the contracts the club has, and the dispute, at the of the day, may just be how those issues should have been disclosed.

I shall gird my loins for the inevitable legal onslaught. :)

 

[BerkshireBlue]

The premier league might be wise to protect themselves (from having to deal with messes like this) going forward by putting time restrictions in place.
Yes some teams might get away with some things but mitigate that by monitoring more carefully and acting quicker.

Do you mean like they did when they investigated Liverpool for criminal activity when they hacked into our scouting system? "“A spokesperson said: “The FA carefully considered the evidence received in this matter, including information provided by both clubs involved, and has decided not to progress the investigation. This is due to a number of factors including the age of the alleged concerns"

 

[Silva61]

Nor murdered anyone. Heysel has almost been airbrushed from history. The club should have been dismantled the day afterwards. If the FA acted correctly, all those teams who missed out on Europe may well have had entirely different trajectories and become elite clubs. As it is, no compensation has ever been paid to those clubs and with 40 years interest the likes of Coventry, Oxford, Wimbledon etc etc could do with that money. Plus tthose that missed out because the coefficients had reduced the opportunity for that tailing off period during the ban.

The goofy **** needs telling 29/05/85 was a very bad day for football.

 

[gordondaviesmoustache]

I'm not so sure they would be disadvantaged. Everton for instance might vote for it, an ever present whom should they get relegated would likely come straight back up. They're voting share would drop from 10 votes to 9 for around 10 years. We might vote for it as we'd still have 10 votes and if we got relegated we'd still have voting power.

Actually, losing voting power instead of points or a fine, is a kind of punishment that hasn't been suggested.

But it wouldn't happen anyway so its moot.

Everton would almost certainly vote for it but of current PL clubs I expect Sheffield United, Luton, Burnley, Fulham, Bournemouth, Forest and Brentford would vote against it - and I fully expect City would too.

 

[Odd socks]

I bet our new generation of supporters from 2012 onwai and I mean the 10/11/12 year olds don't give a flying fxxk about the charges and will be city fans forever.
I started out on my journey back in the sixties and to be honest I don't either.

 

[Eric Hitchmough]

Nor murdered anyone. Heysel has almost been airbrushed from history. The club should have been dismantled the day afterwards. If the FA acted correctly, all those teams who missed out on Europe may well have had entirely different trajectories and become elite clubs. As it is, no compensation has ever been paid to those clubs and with 40 years interest the likes of Coventry, Oxford, Wimbledon etc etc could do with that money. Plus tthose that missed out because the coefficients had reduced the opportunity for that tailing off period during the ban.

Not that I want to contribute to this thread continuing to go off topic, but re: Heysel even Mark Lawrenson says it’s been airbrushed out by the Dippers, hence them holding a trophy parade on the anniversary of the tragedy in 2022.

 

[Man_City_Loyal]

Well there's basically two charges.

1) We inflated sponsorships to artificially increase our revenue.
2) We paid Mancini and players without fully reporting it.

We know (1) is a pile of shite and has already been demolished by CAS but we pretty definitely did what's alleged in (2).

Now that might have been perfectly legal but they could still potentially decide we did it in ba faith to avoid reporting it in our accounts.

we did PB?

 

[Man_City_Loyal]

Not that I want to contribute to this thread continuing to go off topic, but re: Heysel even Mark Lawrenson says it’s been airbrushed out by the Dippers, hence them holding a trophy parade on the anniversary of the tragedy in 2022.

he also been airbrushed out of tv as well.

coincidence eh?

 

[The Light Was Yellow Sir]

Also, finishing bottom as champions, having scored the most goals, would be redolent of 1937/38.

Having the best goal difference in the division would surely surpass that?

 

[cheekybids]

No, no, no they have not convinced people we are guilty, they have convinced idiots we are guilty, they have convinced the same idiots who believed us and the dippers shared the last 6 titles, they have convinced the same idiots that believed that the rags had a genuine shot at the champions league, it is not hard to convince these morons of anything as they want to believe it, they want to believe that its not mismanagement by their clubs and that they arent quite good enough, they want to believe it in the same way that they want to believe that if it wasnt for that knee injury theyd have made it and played in the premier league and that they are the funniest person in the office and everyone is laughing with them not at them, they havent convinced anyone with half a brain of anything, its just unfortunate that as with most things the vocal idiot minority make the loudest noise.

The same idiots that are convinced the problems in Paris were all UEFAs fault.

 

[gordondaviesmoustache]

Having the best goal difference in the division would surely surpass that?

I originally posted that but decided to go all ‘istree, la, and edit it.

 

[Stoned Rose]

Exactly and this is the thing that I have been stressing to some Rags that I know, The PL have no power to relegate us to any specific league. The only other option that they have would be to expel us completely from the PL in which case we would then have to appeal to the EFL for membership and it would be them who decide where we would enter the structure.

However the key thing for me is this, how much damage would be done to us as a club if we were expelled and the EPL said we needed to start again in Division 2? It would be huge, the money lost alone by the time we returned to the Premier league would run over a Billion pounds.

Now imagine that we then appeal the decision and win, or better still go to court and prove FFP to be illegal under EU laws and then go after the PL for last revenue and damages. We would quite possibly bankrupt them. Therefore I see the worst that happens is a huge points deduction to relegate us.

I do wonder if they would try to do something radical like a total 300 point reduction but broken down into 60 point deductions for every year we are in the PL. This would guarantee that every time we gained promotion we would get relegated again the following season. No top level player would want to come to us knowing this and as such would basically ruin us for the next 20 years plus.

You sound ill mate.

 

[117 M34]

Actually there might be something in that.

Should a team that is in the premier league for just 1 year in the last 10 have the same voting rights as an ever present like Everton? Maybe, maybe not.

Should Everton get relegated should they lose all voting rights immediately?

Maybe it should be proportional. Maybe you get 1 vote for each of the rolling last 10 years you were in the premier league. So City, Spurs, Chelsea, Everton, Newcastle, Palace would all currently get 10 votes each whereas Burnley would get 8 votes and Forest would get 2 votes.

Not sold on that idea, but it's still the case that no one team gets more than 1/20 of the total vote.

Yes they should as votes are based on things that will happen in the future not the past.
Doing it this way would give more voting rights to Everton than say Brentford but everton might not be in the PL much longer whereas Brentford could stay in the league for 10 more years.

 

[The Light Was Yellow Sir]

I originally posted that but decided to go all ‘istree, la, and edit it.

Minus 40 points might make it an interesting season and the atmosphere that season would be off the scale.

 

[JGL07]

Wasn’t it also at the same time you were only allowed 3 non-British players?

Three non-English players actually!

 

[gordondaviesmoustache]

Minus 40 points might make it an interesting season and the atmosphere that season would be off the scale.

All part of the mental and magical journey we’ve been on, mate.

 

[abu13]

You sound ill mate.

Haha, I think it's getting to me now :)

 

[halfcenturyup]

we did PB?

Some of the payments made to the club's managers and players were made by external companies because they were contracted that way (Mancini had a separate contract in AD/ image rights were "outsourced" to a third party). Presumably after tax and legal clearances. Those contracts, as far as we know, were properly recorded in the accounts. We have no reason to believe otherwise. Remember the audited accounts don't have to comply with any PL requirements, other than giving a true and fair view. The two questions are if these other payments needed to be reported to the PL and, if they did, were they? Which brings into the equation PB's other point on interpretation. In any case, I doubt a few disputed non-disclosures would lead to a severe sanction. Also, the numbers involved probably were most likely not significant enough to alter the true and fair view given by the accounts or the club's FFP position, anyway.

 

[willipp]

I’m being mocked by someone. Turned up for my son’s swim/run competition today and he’s number 115. Wankers

 

[Man_City_Loyal]

Some of the payments made to the club's managers and players were made by external companies because they were contracted that way (Mancini had a separate contract in AD/ image rights were "outsourced" to a third party). Presumably after tax and legal clearances. Those contracts, as far as we know, were properly recorded in the accounts. We have no reason to believe otherwise. Remember the audited accounts don't have to comply with any PL requirements, other than giving a true and fair view. The two questions are if these other payments needed to be reported to the PL and, if they did, were they? Which brings into the equation PB's other point on interpretation. In any case, I doubt a few disputed non-disclosures would lead to a severe sanction. Also, the numbers involved probably were most likely not significant enough to alter the true and fair view given by the accounts or the club's FFP position, anyway.

I'm sure they will find a way