PL charge City for alleged breaches of financial rules

Keith Moon said:
Because “irrefutable” was being used rhetorically, not literally. It meant evidence strong enough to win the case under that process, not evidence that couldn’t be argued about. And given how long it’s taken, the panel has clearly had plenty to argue about.
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Even when you try and come down on City’s side you always seem to have a little nibble
 
Keith Moon said:
We’re not guilty of disguising owner investment as sponsorship. It’s a bizarre accusation — why on earth would HH Sheikh Mansour need to top up Abu Dhabi sponsorship with his own money?

We may be guilty of helping Roberto Mancini avoid tax in Italy.

The Yaya / Fordham stuff is above my pay grade — we might be guilty of something, but it feels like a matter for HMRC rather than the Premier League.

Not guilty of breaching UEFA’s FFP.

Not guilty of breaching PSR.

Guilty of not cooperating with the Premier League.
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The Fordham stuff is about payment of image rights. HMRC generally allow 10% of players' remuneration to be paid for use of their image and that payment is made to their personal service companies rather than via PAYE. So from the club's perspective it reduces their liability to income tax and NI. The players then have to account for that 10%, via whatever tax regime is in place where they're liable to pay that.

HMRC is involved in investigations into some clubs it believes have abused this, but I don't believe we are one of those. United are, however, and I've been told that their potential liability (as demanded by HMRC) may be very substantial, potentially around £100m. I can't vouch for that though.

So image rights are paid separately, although have to be reported to the PL & UEFA as part of players' total remuneration. Prior to 2013, City paid these through a company called Manchester City Football Club Image Rights. But in 2013 they made an arrangement to sell those for around £25m to a company called Fordham Sports Image Rights, which was supposedly unconnected to City (although they're named on our Companies House filings, so aren't secret).

The reason for that sale, as far as I'm aware, was to generate additional revenue when we were trying to ensure we met UEFA' criteria for avoiding sanctions as a result of the first FFP assessment. We had to record a loss of no more than about £55m to do this, but we needed to bring in around an additional £50m to achieve this, which we did via the Fordham IP sale and setting up 2 new subsidiaries to supply services to all CFG clubs, which brought in about another £25m.

As I mentioned the other day, UEFA made that strategy useless by moving the goalposts subtly but, for us, significantly. It's highly unlikely we'd have gone ahead with the Fordham sale if we'd known that upfront, but Fordham now paid the image rights to players, and seem to have been reimbursed for that from Abu Dhabi. That means that part of the players' remuneration clearly didn't go through our books, unless we reimbursed Abu Dhabi in some way. It wasn't a huge amount annually, probably around £12-13m, and I doubt it made any difference to passing or failing FFP/PSR but I think that's where we're possibly most vulnerable. However it has to be taken into account that we didn't do it to reduce expenditure, but to bring in revenue. So we could use that to counter any suggestion we didn't act in utmost good faith.

The key question though is did we declare those payments to the PL/UEFA as part of our annual financial submissions? We know that UEFA spoke to us about Fordham in 2015, and the arrangement ceased a couple of years later. In truth, we didn't need it by then so there was no point in maintaining it. There was no sanction for this, and it wasn't raised in the original FFP case, which possibly suggests UEFA might have had concerns about it, but there was no rule breach and we declared all remuneration fully.
 
Prestwich_Blue said:
I agree. Otherwise how could we provide suitable assurances to players and commercial partners?
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There are always caveats people can rightly offer up, break clauses and the like.

However, that's not what City have offered or were asked for.

They have given firm assurances to various groups who would rightly feel wary of pitching their tent up during this period.

City's legal team will have already received various back and forth from the respective counsels, certainly enough for our Board to become emboldened.

The APT case was a huge flare going up that City and the Premier League have ceased hostilities.

The allowance of Etihad uplift was another indicator to the peanut gallery.

As for Revolut, they don't need to enter any such arrangement with City before a verdict is made public.

They have a banking license and float to concern themselves with and don't need any guilt by association.

Both things can be true, there is no verdict and City are still waiting for it to drop.

A bit like a boxer who is a clear winner on points, they know they have won the fight, both in terms of the overall visuals and conviction.

Thankfully, these are highly skilled KC judges not homers and City aren't gonna be fucked over on the scorecards.
 
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tolmie's hairdoo said:
There are always caveats people can rightly offer up, break clauses and the like.

However, that's not what City have offered or were asked for.

They have given firm assurances to various groups who would rightly feel wary of hitching their tent up during this period.

City's legal team will have already received various back and forth from the respective counsels, certainly enough for our Board to become emboldened.

The APT case was a huge flare going up that City and the Premier League have ceased hostilities.

The allowance of Etihad uplift was another indicator to the peanut gallery.

As for Revolut, they don't need to enter any such arrangement with City before a verdict is made public.

They have a banking license and float to concern themselves with and don't need any guilt by association.

Both things can be true, there is no verdict and City are still waiting for it to drop.

A bit like a boxer who is a clear winner on points, they know they have won the fight, both in terms of the overall visuals and conviction.

Thankfully, these are highly skilled KC judges not homers and City aren't gonna be fucked over on the scorecards.
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Do you remember if City did buy any new players, or signed new sponsors deals in the time frame between the UEFA ban and when the CAS verdic dropped ?
 
Prestwich_Blue said:
The Fordham stuff is about payment of image rights. HMRC generally allow 10% of players' remuneration to be paid for use of their image and that payment is made to their personal service companies rather than via PAYE. So from the club's perspective it reduces their liability to income tax and NI. The players then have to account for that 10%, via whatever tax regime is in place where they're liable to pay that.

HMRC is involved in investigations into some clubs it believes have abused this, but I don't believe we are one of those. United are, however, and I've been told that their potential liability (as demanded by HMRC) may be very substantial, potentially around £100m. I can't vouch for that though.

So image rights are paid separately, although have to be reported to the PL & UEFA as part of players' total remuneration. Prior to 2013, City paid these through a company called Manchester City Football Club Image Rights. But in 2013 they made an arrangement to sell those for around £25m to a company called Fordham Sports Image Rights, which was supposedly unconnected to City (although they're named on our Companies House filings, so aren't secret).

The reason for that sale, as far as I'm aware, was to generate additional revenue when we were trying to ensure we met UEFA' criteria for avoiding sanctions as a result of the first FFP assessment. We had to record a loss of no more than about £55m to do this, but we needed to bring in around an additional £50m to achieve this, which we did via the Fordham IP sale and setting up 2 new subsidiaries to supply services to all CFG clubs, which brought in about another £25m.

As I mentioned the other day, UEFA made that strategy useless by moving the goalposts subtly but, for us, significantly. It's highly unlikely we'd have gone ahead with the Fordham sale if we'd known that upfront, but Fordham now paid the image rights to players, and seem to have been reimbursed for that from Abu Dhabi. That means that part of the players' remuneration clearly didn't go through our books, unless we reimbursed Abu Dhabi in some way. It wasn't a huge amount annually, probably around £12-13m, and I doubt it made any difference to passing or failing FFP/PSR but I think that's where we're possibly most vulnerable. However it has to be taken into account that we didn't do it to reduce expenditure, but to bring in revenue. So we could use that to counter any suggestion we didn't act in utmost good faith.

The key question though is did we declare those payments to the PL/UEFA as part of our annual financial submissions? We know that UEFA spoke to us about Fordham in 2015, and the arrangement ceased a couple of years later. In truth, we didn't need it by then so there was no point in maintaining it. There was no sanction for this, and it wasn't raised in the original FFP case, which possibly suggests UEFA might have had concerns about it, but there was no rule breach and we declared all remuneration fully.
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Yep. It's the underwriting of losses from ADUG to Fordham that may be troublesome, but we don't really know any detail so it's impossible to assess really. I am inclined to believe that Mansour and Khaldoon are smart enough to have their backs covered on that. As you say, likely no effect on FFP from that alone anyway and certainly not from the point of view of true and fair accounts.

Which is another problem the PL has. The only thing really that could shift the dial on either of those would be 50 million a year on Etihad funding, and that just isn't going to happen imho.
 
halfcenturyup said:
Yep. It's the underwriting of losses from ADUG to Fordham that may be troublesome, but we don't really know any detail so it's impossible to assess really. I am inclined to believe that Mansour and Khaldoon are smart enough to have their backs covered on that. As you say, likely no effect on FFP from that alone anyway and certainly not from the point of view of true and fair accounts.

Which is another problem the PL has. The only thing really that could shift the dial on either of those would be 50 million a year on Etihad funding, and that just isn't going to happen imho.
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The inference to be made by the prosecution on behalf of the Premier League, obviously, being that we underwrote these Fordham losses, so it isn't a stretch we did similar by reimbursing sponsorship shortfalls.
 
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