City launch legal action against the Premier League | Club & PL reach settlement | Proceedings dropped (p1147)

Tb1981 said:
I suspect our KCs will be very enthused by the APT ruling
If nothing else it shows how hard it is to overturn these things. As such the premier league will struggle to land the 115/130 and prove all points.
Do you think it’s feasible we could come out having essentially won on most points but have a media campaign telling us we are still guilty.
Click to expand...
In that scenario they may try but it will be very difficult and the sanction will show the result. Nobody is going to believe a non coop win for the PL (if that was the extent) was a meaningful win.

But it is likely that a win by the PL on any substantive matters will give the press the headlines they seek in the judgment - words like serious, concealed, false, unreliable etc. So depends what happens and what the judgment says.
 
nmc said:
It would be interesting to know how many sponsorship deals have been presented to the PL since the amendment to the APT rules - and how many have been subject to a FMV assessment - we know we have three but I wonder how many more were? That team who finished 8th have a new kit sponsor…. I wonder if that was assessed to see if it was in line with the shirt sponsorship deals of their peers… Newcastle, West Ham and Crystal Palace! I bet not.
Click to expand...
11 took longer than 25 days from memory so you can assume all those needed FMV work. And we know (or it appears), Newcastle’s SELA deal was renegotiated before it was approved (looking at redaction). We don’t have any split between 2021 rules and 2024 rules. None of City’s were 2024 applications but on the timetable set out, if challenged they wouldn’t be approved yet anyway (a lot of challenges are over 100 working days).

United’s is not APT so not FMVed.
 
Reading the thread, I have seen some posters say shareholder loans or equity can be used to spend money on players etc. But shareholder loans are not money earned (turnover) which is what the PSR is based on.

Whilst the shareholder loans can help with cashflow or reduce some interest costs due to low interest rates (might not be allowed going forward if these are tested for arms length principle), these loans or even if converted to equity will not equate to turnover and therefore be not much help towards PSR.
 
Zabbasbeard said:
It is pathetic. My son supports Derby County and I'm glad to say he doesn't share that mentality. Why should he? Always aspire to be the best. As in Everton's motto, Nil Satis Nisi Optimum...

I know a few Forest and Everton fans who are wise to all this. They've seen great success in our lifetimes and why shouldn't they aspire to the same.

I hope Leicester's fickle fans and others feel the same way and have seen through the corrupt Premier League and its corrupt red cartel but tòo many don't.
Click to expand...
And there was me thinking at at the time we all thought Leicester were in on a fix with the league to win it
 
arbabarshad said:
Reading the thread, I have seen some posters say shareholder loans or equity can be used to spend money on players etc. But shareholder loans are not money earned (turnover) which is what the PSR is based on.

Whilst the shareholder loans can help with cashflow or reduce some interest costs due to low interest rates (might not be allowed going forward if these are tested for arms length principle), these loans or even if converted to equity will not equate to turnover and therefore be not much help towards PSR.
Click to expand...
Agree I honestly can’t understand this, could you add a billion in 0% share holder loans and use that to buy new players and avoid PSR and FFP rules?
 
arbabarshad said:
Reading the thread, I have seen some posters say shareholder loans or equity can be used to spend money on players etc. But shareholder loans are not money earned (turnover) which is what the PSR is based on.

Whilst the shareholder loans can help with cashflow or reduce some interest costs due to low interest rates (might not be allowed going forward if these are tested for arms length principle), these loans or even if converted to equity will not equate to turnover and therefore be not much help towards PSR.
Click to expand...
I thought the PSR rules were that effectively you could only lose £105m over 3 seasons? Don't think they're based on turnover at all, will be profitability if anything.

So regardless of what the loan is actually spent on, in having a shareholder loan there is a direct saving on interest costs, had that loan been bought on the 'High street', which is currently increasing (or not reducing profitability).

For example, Arsenal are saving ~£25-£30m a year in interest, which would impact their Profit for PSR purposes.

That's my understanding of PSR anyway, and is what I'd say is the drawback of allowing shareholder loans.

But you're right, whether they spend that loan on players is largely irrelevant for PSR purposes, unless new signings result in an increase in player amortisation.
 
arbabarshad said:
Reading the thread, I have seen some posters say shareholder loans or equity can be used to spend money on players etc. But shareholder loans are not money earned (turnover) which is what the PSR is based on.

Whilst the shareholder loans can help with cashflow or reduce some interest costs due to low interest rates (might not be allowed going forward if these are tested for arms length principle), these loans or even if converted to equity will not equate to turnover and therefore be not much help towards PSR.
Click to expand...

They can be used to cover losses of up to £105m over three years and so can contribute to squad costs. But the issue is the interest free element, because that isn't fair market value, so whatever they would have paid in interest at a fair market rate should have been included in their outgoings on the PSR balance sheet.
 
MadchesterCity said:
Agree I honestly can’t understand this, could you add a billion in 0% share holder loans and use that to buy new players and avoid PSR and FFP rules?
Click to expand...
Not sure any owner of any business in their right mind, would sanction that unless they had some form of guaranteed annual return, or a payback schedule of the loan itself.

Spending a billion quid doesn't guarantee shareholder wealth, they'd probably prefer it to be spent on infrastructure!
 
chris85mcfc said:
I thought the PSR rules were that effectively you could only lose £105m over 3 seasons? Don't think they're based on turnover at all, will be profitability if anything.

So regardless of what the loan is actually spent on, in having a shareholder loan there is a direct saving on interest costs, had that loan been bought on the 'High street', which is currently increasing (or not reducing profitability).

For example, Arsenal are saving ~£25-£30m a year in interest, which would impact their Profit for PSR purposes.

That's my understanding of PSR anyway, and is what I'd say is the drawback of allowing shareholder loans.

But you're right, whether they spend that loan on players is largely irrelevant for PSR purposes, unless new signings result in an increase in player amortisation.
Click to expand...
Profitability is directly related to turnover. PSR being profitability and sustainability rules, is also related to turnover.

Interest or financing costs (external or shareholder loans) are usually a small amount in a P&L even if a business is highly geared. In your example of arsenal saving £25m a year, whilst it is a large amount in its own right, relative to turnover and some of the other costs such as players wages or amortisation, it is a small cost. So there is benefit in using shareholder loans (or was up until now) but if tested for arms length principle, it won't be a significant benefit going forward.
 
You must log in or register to reply here.
Unread Posts

Don't have an account? Register now and see fewer ads!

SIGN UP
Back
Top