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

slbsn said:
All interest free loans are coming from near 100% owners. And there isn’t some 30-40% tax saving by giving an interest free loan. Yes there are reasons why they chose loan vs equity but it’s usually about flexibility. They can’t call these loans in - none of the clubs with meaningful loans have that kind of capital lying around. We are talking about Brighton (£400m of as good as equity loan),Everton £450m (actually accounted for as equity from memory and about to be written off in Friedkin deal), Arsenal (already accounting for FMV with UEFA and loads of PSR capacity anyway) and then small loans around the edges.

It just isn’t a big deal but you don’t need to agree. Many don’t.
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It's only a big deal to the extent that it forces shareholders to do something they presumably didn't want to do: either capitalise the loans or take a hit to the P/L.

Each club can determine how serious that is to them. As you say, probably not very in most cases. But maybe some clubs won't be so keen on ex-ante assessment when it affects them. Who knows?

But I'm not sure I agree that they can't call shareholder loans in because the clubs don't have the funds to repay them. They can call in whatever cash the club has and effectively bankrupt them. As in Portsmouth?
 
I am a bit confused regarding the meaning of turning loans into equity.

Are all these 14 clubs that currently have shareholder loans struggling financially hence they have taken these shareholder loans which if they were to repay would tip them into a deeper financial crisis hence the club just gives the shareholders more shares in the club and holds onto the cash that was originally loaned to them?
 
slbsn said:
All interest free loans are coming from near 100% owners. And there isn’t some 30-40% tax saving by giving an interest free loan. Yes there are reasons why they chose loan vs equity but it’s usually about flexibility. They can’t call these loans in - none of the clubs with meaningful loans have that kind of capital lying around. We are talking about Brighton (£400m of as good as equity loan),Everton £450m (actually accounted for as equity from memory and about to be written off in Friedkin deal), Arsenal (already accounting for FMV with UEFA and loads of PSR capacity anyway) and then small loans around the edges.

It just isn’t a big deal but you don’t need to agree. Many don’t.
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It would be really helpful if perhaps you could summarise the principal reasons given by 'the many' for their disagreement with your assessment that 'it isn't a big deal' ?
 
Strange how most of the PL clubs are looking at their investments.
Their investments range from expecting aa cash cow indefinately to wanting to massively invest but prevented by rules.

How lucky we are to have an owner who simply invested not only financially but also in management people at the peak of their obvious areas of expertise.

Incidentally our owners investment continues which must be frightening to others who must spend to compete where previously they could divide up their cartel profits and simply buy votes by giving breadcrumbs to mid table clubs.

We have gone legal on the PL where their targeted changes to rule have been hastily configured with a hubris that the writers never considered so I am hopeful there are many other areas of general illegality or unfairness that our waiting game will turn to if necessary.
 
johnny crossan said:
It would be really helpful if perhaps you could summarise the principal reasons given by 'the many' for their disagreement with your assessment that 'it isn't a big deal' ?
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They don’t understand that such loans are basically equity anyway. Everton’s shareholder loans are actually treated as equity in their accounts under FRS102.22. The owners can achieve most of the aims of shareholder loans (like added security) with slithers of loans. And this was the explanation from one lawyer in the Athletic. He doesn’t get it because even his number is highly misleading.1728984714203.png
 
freshie said:
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So 3 out of the 4 lawyers felt that it wad a win for us
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Not even sure if the fourth one is a lawyer. I’d say he’s almost certainly not a practising one. I’m always wary of academics talking about the implications of determinations because they don’t have a feel for things like those at the coal face do. Only a lived experience can give you that instinct.
 
slbsn said:
zglinski is taken from his tweet. Nobody can call the changes to the fundamental calculation of FMV to be “minor quibbles”. That misunderstands the importance of that test.

Obviously, I wouldn’t want to “punch down” on Panja again [eye roll] but seems he hasn’t publicised Simon Leaf’s more considered view. Funny that.
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Panja disingenuous or selective ?

Are you sure
 
gordondaviesmoustache said:
Not even sure if the fourth one is a lawyer. I’d say he’s almost certainly not a practising one. I’m always wary of academics talking about the implications of determinations because they don’t have a feel for things like those at the coal face do. Only a lived experience can give you that instinct.
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Sounds like the sort of comment a small-claims lawyer would make :)
 
meltonblue said:
The Portsmouth reference was around the implementation of PSR in the first place wasn’t it, rather than around APTs? Or are you saying that in terms of how much the underlying motivations behind some of the PSR rules had changed?

Or is it they’re referring to Portsmouth when they talk about “misplaced references to one administrative procedure of one PL club 14 years ago”?
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I assumed the one administrative procedure was something we don't know about Etihad I. The timing is just too coincidental.

As @Chris in London and I agree on everything now, I can presume to answer for him. I think he is saying using Portsmouth as a justification for FFP/PSR while allowing the very mechanism that did for them, soft loans, unfettered in APT (and FFP/PSR btw) can be seen to be contradictory. Hypocritical, even.

(Waiting to be blasted .....). :)
 
halfcenturyup said:
I assumed the one administrative procedure was something we don't know about Etihad I. The timing is just too coincidental.

As @Chris in London and I agree on everything now, I can presume to answer for him. I think he is saying using Portsmouth as a justification for FFP/PSR while allowing the very mechanism that did for them, soft loans, unfettered in APT (and FFP/PSR btw) can be seen to be contradictory. Hypocritical, even.

(Waiting to be blasted .....). :)
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Yes that’s what I’m assuming too, just wanted to check :)
 
mr t said:
I am a bit confused regarding the meaning of turning loans into equity.

Are all these 14 clubs that currently have shareholder loans struggling financially hence they have taken these shareholder loans which if they were to repay would tip them into a deeper financial crisis hence the club just gives the shareholders more shares in the club and holds onto the cash that was originally loaned to them?
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Loans are just part of the funding strategy of a club by the owner. Mansour put funding in as 100% but he has mucho dineiro. Some owners may prefer to loan money so it can be repaid easily if the club is in a position to do so. Some owners may prefer loans for tax reasons - favourable tax treatment for interest income compared to dividends, for example.

If an owner considers he can increase equity and reduce loans, he can convert some of the loans to equity (new shares) without putting more cash in (the cash was received when the loan was made). It is just a book-keeping entry, apart from some documentation and some minor associated costs.
 
gordondaviesmoustache said:
Not even sure if the fourth one is a lawyer. I’d say he’s almost certainly not a practising one. I’m always wary of academics talking about the implications of determinations because they don’t have a feel for things like those at the coal face do. Only a lived experience can give you that instinct.
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Have checked his LinkedIn and whilst very impressive academically he has no vocational qualifications and thereby has never practised as a lawyer.

I wouldn’t discount his views, but I wouldn’t give them as much weight as those who practise. Greater academic powers do not necessarily equate to better judgement.
 
gordondaviesmoustache said:
Have checked his LinkedIn and whilst very impressive academically he has no vocational qualifications and thereby has never practised as a lawyer.

I wouldn’t discount his views, but I wouldn’t give them as much weight as those who practise. Greater academic powers does not necessarily equate to better judgement.
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Those who can .....
 
gordondaviesmoustache said:
Have checked his LinkedIn and whilst very impressive academically he has no vocational qualifications and thereby has never practised as a lawyer.

I wouldn’t discount his views, but I wouldn’t give them as much weight as those who practise. Greater academic powers do not necessarily equate to better judgement.
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Can he do it on a cold wet day in Birmingham at the Small Claims Court?
 
halfcenturyup said:
Those who can .....
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I think that’s slightly unfair in respect of him, because looking at his qualifications and current calling he’s clearly highly academic and so is presumably doing what he does professionally out of choice, not because he couldn’t cut it in practice.

I guess if you are a legal geek then being a law/jurisprudence lecturer at Oxford is pretty close to nirvana! I also expect he’s a right boring ****!

But I’d be wary about his views on the implications of this or any other judgment as his basis for evaluating such things is essentially theoretical, which means his sense of judging these things isn’t as fully developed as those who operate in the field.
 
slbsn said:
They don’t understand that such loans are basically equity anyway. Everton’s shareholder loans are actually treated as equity in their accounts under FRS102.22. The owners can achieve most of the aims of shareholder loans (like added security) with slithers of loans. And this was the explanation from one lawyer in the Athletic. He doesn’t get it because even his number is highly misleading.View attachment 134985
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I think the point you make has been missed by so many commentators .

Namely that these loans are sums that for the vast majority of owners have chosen to leave on the books because of advantages be it to them or indeed the club and if their is a PSR advantage that’s great
I very much doubt that any PL club owner sees their cash input into a club as a sort term investment so when putting the money in converting into equity won’t be that much of an issue and way above my pay grade I believe it is possible for a company to buy back shares from shareholders at cost without any significant tax issues
My point is that the author of that Athletic article is making the assumption that these loans will remain in the accounts as loans when I am pretty sure that that will not be the case
 
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