Annual report 2012/13 released (merged)

[Prestwich_Blue]

What's the sell back of the IP's?

And why is it (seen as a) desperate measure?

Thanks.

Two elements to the IP sale from what I can see. The first involves selling the Manchester City brand name to a third party outside the group for £24.5m, possibly in somewhat the same way that Swales sold the rights to Eddie Phillips all those years ago. We should therefore have to pay the third-party for the right to use that brand. So we've taken a cash lump sum up-front and will presumably pay an annual royalty to the third party.

The other part is the sale to two new companies that are within the group and will provide centralised marketing and other admin and football related services to City and the franchises. Usually these companies would be run as profit centres & cross-charge for those services. It would seem, if I'd read it right, that we've "charged" these companies an up-front fee for the transfer of know-how and possibly staff and they will get that back by charging the various companies for those services. I guess it's a bit like the owner of a franchise selling the rights to a franchisee. They take an upfront fee and the franchisee collects the revenue, which hopefully covers that fee.

I used the word 'desperate' as I doubt we would have done this in this way if we didn't need the income for that financial year to meet FFP.

 

[cibaman]

What's the sell back of the IP's?

And why is it (seen as a) desperate measure?

Thanks.

Two elements to the IP sale from what I can see. The first involves selling the Manchester City brand name to a third party outside the group for £24.5m, possibly in somewhat the same way that Swales sold the rights to Eddie Phillips all those years ago. We should therefore have to pay the third-party for the right to use that brand. So we've taken a cash lump sum up-front and will presumably pay an annual royalty to the third party.

The other part is the sale to two new companies that are within the group and will provide centralised marketing and other admin and football related services to City and the franchises. Usually these companies would be run as profit centres & cross-charge for those services. It would seem, if I'd read it right, that we've "charged" these companies an up-front fee for the transfer of know-how and possibly staff and they will get that back by charging the various companies for those services. I guess it's a bit like the owner of a franchise selling the rights to a franchisee. They take an upfront fee and the franchisee collects the revenue, which hopefully covers that fee.

I used the word 'desperate' as I doubt we would have done this in this way if we didn't need the income for that financial year to meet FFP.

Perhaps a consequence of the need to find room for the Mancini pay offs?

 

[aguero93:20]

What's the sell back of the IP's?

And why is it (seen as a) desperate measure?

Thanks.

Two elements to the IP sale from what I can see. The first involves selling the Manchester City brand name to a third party outside the group for £24.5m, possibly in somewhat the same way that Swales sold the rights to Eddie Phillips all those years ago. We should therefore have to pay the third-party for the right to use that brand. So we've taken a cash lump sum up-front and will presumably pay an annual royalty to the third party.

The other part is the sale to two new companies that are within the group and will provide centralised marketing and other admin and football related services to City and the franchises. Usually these companies would be run as profit centres & cross-charge for those services. It would seem, if I'd read it right, that we've "charged" these companies an up-front fee for the transfer of know-how and possibly staff and they will get that back by charging the various companies for those services. I guess it's a bit like the owner of a franchise selling the rights to a franchisee. They take an upfront fee and the franchisee collects the revenue, which hopefully covers that fee.

I used the word 'desperate' as I doubt we would have done this in this way if we didn't need the income for that financial year to meet FFP.

Would this be permanent or for a set period of time? If it's permanent then it looks to me as if we've gotten a bit of a bum deal, although if I was in Ferran Soriano's position I would have made sure to include a buy-back clause of some kind to allow us to re-acquire the rights when we had some more room in the books.

 

[fbloke]

I said earlier in this thread (I think it was this thread) of the significance of the group structure for the distribution of revenues and the very next day we are all a fluster with IP rights and a rush to beat FFP.

I see it rather differently. The club are either at the top of, or at the centre of, a group of companies (it depends on your POV) and they needed to create a new structure that reflects the future use of revenues and ways of working.

It could of course have been left until next year or the year after but then it would have meant a messy year.

I have spoken to a few people over the last year about the MCFC company structure as its easy to see who owns what and who is on the board of what for UK companies. If you do look at the structure you see some interesting things.

Have a mooch yourselves - <a class="postlink" href="http://companycheck.co.uk/company/00040946" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/00040946</a>

The womens team is a company within the group.

NYCFC will no doubt be dealt with in the same way as will Melbourne City FC (MCFC).

The revenues from the collar site will also need to be dealt with separately within the group but this may well involve a number of partnerships/joint developments and indeed IP rights ins and outs.

How would the old structure of MCFC Limited deal with a part share of revenues from a number of property deals across the land owned by the club, via Brookshaw Developments?

So I see this not as a panic measure to get our noses over the FFP line, as there are plenty of reasons to doubt that, but the inevitable restructure of what was once a small, parochial football club not fit for the economic realities of where MCFC and its group of comps will be in the near future.

 

[toffee balls]

I said earlier in this thread (I think it was this thread) of the significance of the group structure for the distribution of revenues and the very next day we are all a fluster with IP rights and a rush to beat FFP.

I see it rather differently. The club are either at the top of, or at the centre of, a group of companies (it depends on your POV) and they needed to create a new structure that reflects the future use of revenues and ways of working.

It could of course have been left until next year or the year after but then it would have meant a messy year.

I have spoken to a few people over the last year about the MCFC company structure as its easy to see who owns what and who is on the board of what for UK companies. If you do look at the structure you see some interesting things.

Have a mooch yourselves - <a class="postlink" href="http://companycheck.co.uk/company/00040946" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/00040946</a>

The womens team is a company within the group.

NYCFC will no doubt be dealt with in the same way as will Melbourne City FC (MCFC).

The revenues from the collar site will also need to be dealt with separately within the group but this may well involve a number of partnerships/joint developments and indeed IP rights ins and outs.

How would the old structure of MCFC Limited deal with a part share of revenues from a number of property deals across the land owned by the club, via Brookshaw Developments?

So I see this not as a panic measure to get our noses over the FFP line, as there are plenty of reasons to doubt that, but the inevitable restructure of what was once a small, parochial football club not fit for the economic realities of where MCFC and its group of comps will be in the near future.

Thanks for that.

Good , clear post, as ever.

 

[aguero93:20]

I said earlier in this thread (I think it was this thread) of the significance of the group structure for the distribution of revenues and the very next day we are all a fluster with IP rights and a rush to beat FFP.

I see it rather differently. The club are either at the top of, or at the centre of, a group of companies (it depends on your POV) and they needed to create a new structure that reflects the future use of revenues and ways of working.

It could of course have been left until next year or the year after but then it would have meant a messy year.

I have spoken to a few people over the last year about the MCFC company structure as its easy to see who owns what and who is on the board of what for UK companies. If you do look at the structure you see some interesting things.

Have a mooch yourselves - <a class="postlink" href="http://companycheck.co.uk/company/00040946" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/00040946</a>

The womens team is a company within the group.

NYCFC will no doubt be dealt with in the same way as will Melbourne City FC (MCFC).

The revenues from the collar site will also need to be dealt with separately within the group but this may well involve a number of partnerships/joint developments and indeed IP rights ins and outs.

How would the old structure of MCFC Limited deal with a part share of revenues from a number of property deals across the land owned by the club, via Brookshaw Developments?

So I see this not as a panic measure to get our noses over the FFP line, as there are plenty of reasons to doubt that, but the inevitable restructure of what was once a small, parochial football club not fit for the economic realities of where MCFC and its group of comps will be in the near future.

Nice to see we've a top credit rating, another area where we're presumably top of the league :) cheers for the link.

 

[petrusha]

I just wrote this post somewhere else but I'll stick it in this thread as well:

This IP business has created a bit of a storm, and it seems to me that a lot of people think it's just a ruse City have plucked out of the air to cut down our losses. However, it’s quite common in the way that global holding companies run their business when they have subsidiaries in a number of different countries, and this is the set-up that City are creating.

In essence, what we’re dealing with here is a device where a company forms a subsidiary to carry out operations in another territory, and they enter into what's called a cost sharing arrangement (CSA). Under this kind of arrangement, the companies share intangible costs that will be separately exploited by each of the participants.

Thus, for example, where R&D is carried out by the head office but will benefit all group companies, they all chip in for it in proportions that are in line with the proportions of the anticipated benefits they can expect to derive. This, I think, is why Ferran specifically mentioned recently that NYCFC will have use of City's international scouting network and commercial operation. They'll pay for it too, and those areas of MCFC's activity are world leaders so the services in question probably won't come cheaply.

Secondly, when a CSA is set up, you'll quite commonly find that one company already owns intangible assets which it then makes available to the others, and those others will benefit when they carry out their operations in future. This is very frequently met in the context of intellectual property. Let’s say that company A sets up a subsidiaries B and C to manufacture and sell company A's products (whether that’s chocolates or cigarettes or cosmetics or something else) in territories D and E. If company A is a well-known global brand, subsidiaries B and C have much better prospects if they sell the goods under company A's trademark(s)than if they sell the same goods under completely unknown brand F. This will be reflected in revenues down the track.

The standard way of dealing with this is for company A along with subsidiaries B and C to create a CSA, and for subsidiaries B and C to do something that’s known as "buying in". This means that they pay a lump sum at the inception of the CSA for future use of the rights. And later, when the CSA is up and running, if company A develops and makes further intangibles available to the participants in the CSA, then a further buy-in (often called an “acquisition buy-in”) takes place.

The rationale of this is that by settling things in this way at the outset, the parties can move on knowing that they’re on an even footing with one another in terms of using intangible property belonging to one another. As they move forward, it’s therefore fair for the subsidiary companies to keep all the profit they generate rather than having to remit part of it to pay off a debt owed to the parent company.

I work for Russia’s biggest law firm and, trust me, we meet arrangements like this all the time for the Russian subsidiaries of multinationals. It’s absolutely the standard way to deal with the kind of situation City are now in where they’re trying to build up the ‘City Football Group’. I don’t see it as something we’ll have done simply to meet FFP, though of course the knowledge that we have this money coming in will no doubt have informed decisions about our levels of spending on transfer fees and the wage bill.

Obviously to the extent that sales are to related parties these must meet a fair value test under FFPR. However, this also mirrors something that our clients face when they use CSAs: these expenses are deductible for profit tax purposes but also, when with related parties (which they invariably are), only to the extent that they reflect the market value of the rights in question.

Here clients take advice from independent specialists who value the rights for these purposes. The valuations are subjective to some degree, of course, as these things always are. But generally if you follow the recommendations of recognised neutral experts and can provide detailed reasoning as to why the figure you’ve picked represents an arm’s length value, the tax authorities tend not to get very excited.

I find it very difficult to imagine that City aren’t doing something similar in relation to FFPR, and that should probably see us right when it comes to UEFA. And while we’re doing something that’s uncommon (maybe unprecedented) in the football industry, that’s because the notion of subsidiary clubs is new as well. However, ultimately I don’t think we’ll see a comeback from handling that in a way that’s entirely in line with standard global practice for similar undertakings.

It seems to be that there’s a lot of hysterical press about this – stories along the lines of “City cheat FFPR with huge IP con”. Actually, I think the truth is a little different.

 

[aguero93:20]

Understand the IP sale but I'd be a bit more comfortable if it had been to a related party.

 

[fbloke]

Apologies for missing off this link for the new City Football Group Limted to which I was referring earlier in the thread.

<a class="postlink" href="http://companycheck.co.uk/company/08355862/CITY-FOOTBALL-GROUP-LIMITED/company-summary#basic-information" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/08355 ... nformation</a>

This is the company for which all staff, wherever they are in the world, have an email address ;-)

 

[fbloke]

I just wrote this post somewhere else but I'll stick it in this thread as well:

This IP business has created a bit of a storm, and it seems to me that a lot of people think it's just a ruse City have plucked out of the air to cut down our losses. However, it’s quite common in the way that global holding companies run their business when they have subsidiaries in a number of different countries, and this is the set-up that City are creating.

In essence, what we’re dealing with here is a device where a company forms a subsidiary to carry out operations in another territory, and they enter into what's called a cost sharing arrangement (CSA). Under this kind of arrangement, the companies share intangible costs that will be separately exploited by each of the participants.

Thus, for example, where R&D is carried out by the head office but will benefit all group companies, they all chip in for it in proportions that are in line with the proportions of the anticipated benefits they can expect to derive. This, I think, is why Ferran specifically mentioned recently that NYCFC will have use of City's international scouting network and commercial operation. They'll pay for it too, and those areas of MCFC's activity are world leaders so the services in question probably won't come cheaply.

Secondly, when a CSA is set up, you'll quite commonly find that one company already owns intangible assets which it then makes available to the others, and those others will benefit when they carry out their operations in future. This is very frequently met in the context of intellectual property. Let’s say that company A sets up a subsidiaries B and C to manufacture and sell company A's products (whether that’s chocolates or cigarettes or cosmetics or something else) in territories D and E. If company A is a well-known global brand, subsidiaries B and C have much better prospects if they sell the goods under company A's trademark(s)than if they sell the same goods under completely unknown brand F. This will be reflected in revenues down the track.

The standard way of dealing with this is for company A along with subsidiaries B and C to create a CSA, and for subsidiaries B and C to do something that’s known as "buying in". This means that they pay a lump sum at the inception of the CSA for future use of the rights. And later, when the CSA is up and running, if company A develops and makes further intangibles available to the participants in the CSA, then a further buy-in (often called an “acquisition buy-in”) takes place.

The rationale of this is that by settling things in this way at the outset, the parties can move on knowing that they’re on an even footing with one another in terms of using intangible property belonging to one another. As they move forward, it’s therefore fair for the subsidiary companies to keep all the profit they generate rather than having to remit part of it to pay off a debt owed to the parent company.

I work for Russia’s biggest law firm and, trust me, we meet arrangements like this all the time for the Russian subsidiaries of multinationals. It’s absolutely the standard way to deal with the kind of situation City are now in where they’re trying to build up the ‘City Football Group’. I don’t see it as something we’ll have done simply to meet FFP, though of course the knowledge that we have this money coming in will no doubt have informed decisions about our levels of spending on transfer fees and the wage bill.

Obviously to the extent that sales are to related parties these must meet a fair value test under FFPR. However, this also mirrors something that our clients face when they use CSAs: these expenses are deductible for profit tax purposes but also, when with related parties (which they invariably are), only to the extent that they reflect the market value of the rights in question.

Here clients take advice from independent specialists who value the rights for these purposes. The valuations are subjective to some degree, of course, as these things always are. But generally if you follow the recommendations of recognised neutral experts and can provide detailed reasoning as to why the figure you’ve picked represents an arm’s length value, the tax authorities tend not to get very excited.

I find it very difficult to imagine that City aren’t doing something similar in relation to FFPR, and that should probably see us right when it comes to UEFA. And while we’re doing something that’s uncommon (maybe unprecedented) in the football industry, that’s because the notion of subsidiary clubs is new as well. However, ultimately I don’t think we’ll see a comeback from handling that in a way that’s entirely in line with standard global practice for similar undertakings.

It seems to be that there’s a lot of hysterical press about this – stories along the lines of “City cheat FFPR with huge IP con”. Actually, I think the truth is a little different.

I think we have both spotted that the 'debate' over City's accounts had been taken in a direct that it really shouldnt have been.

No dodging around FFP, no ducking and diving, just simply the creation of a group of linked companies that are fit for the purpose of a global group.

 

[petrusha]

I think we have both spotted that the 'debate' over City's accounts had been taken in a direct that it really shouldnt have been.

No dodging around FFP, no ducking and diving, just simply the creation of a group of linked companies that are fit for the purpose of a global group.

I agree completely. People have seen this IP thing and know about the FFP requirement so they put two and two together. As you say, it's about City being run in a manner consistent with the club's new horizons and objectives.

 

[aguero93:20]

I think we have both spotted that the 'debate' over City's accounts had been taken in a direct that it really shouldnt have been.

No dodging around FFP, no ducking and diving, just simply the creation of a group of linked companies that are fit for the purpose of a global group.

I agree completely. People have seen this IP thing and know about the FFP requirement so they put two and two together and make five. As you say, it's about City being run in a manner consistent with the club's new hroizons and objectives.

sorry Petrusha, had to do it :)
We've never tried to dodge FFP, if people think we are they should look at how PSG have dealt with it, then take a long, hard look in the mirror.

 

[petrusha]

I think we have both spotted that the 'debate' over City's accounts had been taken in a direct that it really shouldnt have been.

No dodging around FFP, no ducking and diving, just simply the creation of a group of linked companies that are fit for the purpose of a global group.

I agree completely. People have seen this IP thing and know about the FFP requirement so they put two and two together and make five. As you say, it's about City being run in a manner consistent with the club's new hroizons and objectives.

sorry Petrusha, had to do it :)
We've never tried to dodge FFP, if people think we are they should look at how PSG have dealt with it, then take a long, hard look in the mirror.

You're quite right, that's what I meant to say. I have a meeting in 40 minutes and something very pressing to finish first. Thanks! :)

 

[Bazza20]

Apologies for missing off this link for the new City Football Group Limted to which I was referring earlier in the thread.

<a class="postlink" href="http://companycheck.co.uk/company/08355862/CITY-FOOTBALL-GROUP-LIMITED/company-summary#basic-information" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/08355 ... nformation</a>

This is the company for which all staff, wherever they are in the world, have an email address ;-)

14/01/2013 New Board Member Mr S. Pearce appointed

I am probably well off here but Is this Stuart Pearce ?

 

[aguero93:20]

Apologies for missing off this link for the new City Football Group Limted to which I was referring earlier in the thread.

<a class="postlink" href="http://companycheck.co.uk/company/08355862/CITY-FOOTBALL-GROUP-LIMITED/company-summary#basic-information" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/08355 ... nformation</a>

This is the company for which all staff, wherever they are in the world, have an email address ;-)

14/01/2013 New Board Member Mr S. Pearce appointed

I am probably well off here but Is this Stuart Pearce ?

<a class="postlink" href="http://www.zoominfo.com/p/Simon-Pearce/1233685879" onclick="window.open(this.href);return false;">http://www.zoominfo.com/p/Simon-Pearce/1233685879</a>
No, he's one of our non-executive directors (keeps an eye on the rest of the board and decides on salaries and bonuses)

Background




Employment History


Executive Director

Strategic Communications Affairs


Director of Communications

Executive Affairs Authority


Director of Strategic Communications Affairs

Executive Affairs Authority



Board Memberships and Affiliations


Board Member

twofour54 and ADMM


Board Member

Yas Marina Circuit


Board Member

City






17 Total References
Web References


Meet the Manchester City FC Board - Manchester City FC
mcfc.co.uk, 23 Oct 2013 [cached]
Simon Pearce, Non-Executive Director
Simon Pearce was appointed to the Board on 23 September 2008. He is Executive Director of Strategic Communications Affairs for the Executive Affairs Authority of Abu Dhabi. He is also a Director of twofour54 and ADMM, the owners and operators of Yas Marina Circuit.

WHO WE ARE - OUR TEAM
<a class="postlink" href="http://www.yasmarinacircuit.com" onclick="window.open(this.href);return false;">www.yasmarinacircuit.com</a>, 16 April 2012 [cached]
Simon Pearce Executive Director, Strategic Communications Affairs (EAA) | ADMM Board Member


Purely Man City » The Bernard Halford mystery / boardroom update
<a class="postlink" href="http://www.purelymancity.com" onclick="window.open(this.href);return false;">www.purelymancity.com</a>, 26 Dec 2009 [cached]
Simon Pearce


A central figure working on the ...
<a class="postlink" href="http://www.guardian.co.uk" onclick="window.open(this.href);return false;">www.guardian.co.uk</a> [cached]
A central figure working on the City takeover for Mansour, alongside Khaldoon, has been Simon Pearce, an English expatriate who is the strategic communications director of the Executive Affairs Authority, a policy arm of the Abu Dhabi government.
...
In November 2007 Pearce, who is thought certain to join the City board, oversaw a new campaign to attract tourism and business partners to the emirate, launching a corporate brand for Abu Dhabi itself.The Office of the Brand of Abu Dhabi emphasises above all, and in detail down to the livery of taxis, that the emirate should be synonymous with: "Respect, for heritage, family, culture and tradition, for the environment and business, and above all, respect for each other."
The brand also stresses continuity for Sheikh Mansour's Al Nahyan dynasty, which has ruled Abu Dhabi since the 18th century: "Respect for leadership which has guided us over the lifetime of our emirate."
Insiders say it was Pearce who stepped in after Al Fahim's loadsamoney pronouncements and steered the tone back to dignity.
...
In the Abu Dhabi "Brand Briefing", Simon Pearce, the director of strategic communications for the emirate's Executive Affairs Authority and now a key figure at Manchester City, said "sponsorships or associations" should "epitomise Abu Dhabi".

Purely Man City » Archives
<a class="postlink" href="http://www.purelymancity.com" onclick="window.open(this.href);return false;">www.purelymancity.com</a>, 26 Dec 2009 [cached]
Simon Pearce
...
Khaldoon Al Mubarak has been officially confirmed as Chairman while Simon Pearce, the director of strategic communications for Abu Dhabi's Executive Affairs Authority, becomes a director as had been predicted.

He's got quite a good reputation and a history of working with Sheikh Mansour.

 

[moomba]

Apologies for missing off this link for the new City Football Group Limted to which I was referring earlier in the thread.

<a class="postlink" href="http://companycheck.co.uk/company/08355862/CITY-FOOTBALL-GROUP-LIMITED/company-summary#basic-information" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/08355 ... nformation</a>

This is the company for which all staff, wherever they are in the world, have an email address ;-)

14/01/2013 New Board Member Mr S. Pearce appointed

I am probably well off here but Is this Stuart Pearce ?

Ha ha. Simon I think.

 

[Bazza20]

Phew..

 

[Prestwich_Blue]

I said earlier in this thread (I think it was this thread) of the significance of the group structure for the distribution of revenues and the very next day we are all a fluster with IP rights and a rush to beat FFP.

I see it rather differently. The club are either at the top of, or at the centre of, a group of companies (it depends on your POV) and they needed to create a new structure that reflects the future use of revenues and ways of working.

It could of course have been left until next year or the year after but then it would have meant a messy year.

I have spoken to a few people over the last year about the MCFC company structure as its easy to see who owns what and who is on the board of what for UK companies. If you do look at the structure you see some interesting things.

Have a mooch yourselves - <a class="postlink" href="http://companycheck.co.uk/company/00040946" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/00040946</a>

The womens team is a company within the group.

NYCFC will no doubt be dealt with in the same way as will Melbourne City FC (MCFC).

The revenues from the collar site will also need to be dealt with separately within the group but this may well involve a number of partnerships/joint developments and indeed IP rights ins and outs.

How would the old structure of MCFC Limited deal with a part share of revenues from a number of property deals across the land owned by the club, via Brookshaw Developments?

So I see this not as a panic measure to get our noses over the FFP line, as there are plenty of reasons to doubt that, but the inevitable restructure of what was once a small, parochial football club not fit for the economic realities of where MCFC and its group of comps will be in the near future.

I think you might be confusing two things here mate. The structure is new and quite reasonable for what we're doing now, with a group company and several subsidiaries for each separate operation.

However it's not normal to sell your brand name to a third-party (and at a guess I'd say this third party is somewhere in Abu Dhabi). We can only have done this to raise some cash quickly.

Also it's quite acceptable to set up a service company to provide central services to the various companies. These would normally be charged back to the subsidiaries at an agreed rate in order to cover the costs of the central company. But what I think has happened here is that we have "sold" some of these services up-front, based on investment we've made in them. But if the money has come in, then it must have come out of a related party and we presumably can't see that in these accounts as they only cover part of the group.

 

[fbloke]

I said earlier in this thread (I think it was this thread) of the significance of the group structure for the distribution of revenues and the very next day we are all a fluster with IP rights and a rush to beat FFP.

I see it rather differently. The club are either at the top of, or at the centre of, a group of companies (it depends on your POV) and they needed to create a new structure that reflects the future use of revenues and ways of working.

It could of course have been left until next year or the year after but then it would have meant a messy year.

I have spoken to a few people over the last year about the MCFC company structure as its easy to see who owns what and who is on the board of what for UK companies. If you do look at the structure you see some interesting things.

Have a mooch yourselves - <a class="postlink" href="http://companycheck.co.uk/company/00040946" onclick="window.open(this.href);return false;">http://companycheck.co.uk/company/00040946</a>

The womens team is a company within the group.

NYCFC will no doubt be dealt with in the same way as will Melbourne City FC (MCFC).

The revenues from the collar site will also need to be dealt with separately within the group but this may well involve a number of partnerships/joint developments and indeed IP rights ins and outs.

How would the old structure of MCFC Limited deal with a part share of revenues from a number of property deals across the land owned by the club, via Brookshaw Developments?

So I see this not as a panic measure to get our noses over the FFP line, as there are plenty of reasons to doubt that, but the inevitable restructure of what was once a small, parochial football club not fit for the economic realities of where MCFC and its group of comps will be in the near future.

I think you might be confusing two things here mate. The structure is new and quite reasonable for what we're doing now, with a group company and several subsidiaries for each separate operation.

However it's not normal to sell your brand name to a third-party (and at a guess I'd say this third party is somewhere in Abu Dhabi). We can only have done this to raise some cash quickly.

Also it's quite acceptable to set up a service company to provide central services to the various companies. These would normally be charged back to the subsidiaries at an agreed rate in order to cover the costs of the central company. But what I think has happened here is that we have "sold" some of these services up-front, based on investment we've made in them. But if the money has come in, then it must have come out of a related party and we presumably can't see that in these accounts as they only cover part of the group.

The point is that nobody outside of MCFC knows what the payments are actually for, there has been speculation but no hard facts.

From that speculation people have on here and elsewhere tied other things together and create a really negative picture.

I (and Peter) were showing that there are many reasons for these other changes.

 

[I'm no cynic but...]

I think we have both spotted that the 'debate' over City's accounts had been taken in a direct that it really shouldnt have been.

No dodging around FFP, no ducking and diving, just simply the creation of a group of linked companies that are fit for the purpose of a global group.

I agree completely. People have seen this IP thing and know about the FFP requirement so they put two and two together. As you say, it's about City being run in a manner consistent with the club's new horizons and objectives.

Football at this level is big business, yet the game's administrators give the impression of being amateurish or, worse still, incompetent. Of course no sane person would want a situation where major clubs go belly up, and some control on wild spending has to be enforced to ensure that clubs are safe and, hopefully, prosperous, but UEFA have gone about this in totally the wrong way. Losses are not the worst thing that a company can endure as this is commonplace in the real world, yet these 'failing' companies usually turn it around over a few years. Having debt instead is worse as this costs interest payments, and the debt itself will have to be re-paid when the loan period expires.
There is no evidence that City, in the Sheikh Mansour period, has failed to meet any deadline, and in fact City have been rather generous to the game in general when the high price we are expected to pay for new signings is met. It may even happen that this generosity has saved other clubs from going into meltdown, but we get no credit for that.
In short, City have been good for the game, but it would be a hard task in getting Platini to understand that, even with his son's involvement at PSG to guide him.