SilverFox2
Well-Known Member
Would any other PL team have difficulty on that point if actually charged?
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CAS judgement: UEFA ban overturned, City exonerated (report out p603)
- Thread starter jimharri
- Start date
SilverFox2
Well-Known Member
I certainly got all my FFP tutoring via all the early FFP threads. So easy to accept the biased media's point of view. I still retain very little I'm afraid so I keep asking the same or similarr questions.Keep going PB your insight and patient reminders are much appreciated. Some posters could re-read earlier threads and posts before asking their questions - the answer to many are available. Maybe you could create a MCFC / FFP accredited learning module and it could become an entry requirement for membership on BM?
Maybe our ‘journalist‘ friends could take it.
Centurions
Well-Known Member
Yep, we would have been done for disguising where the money came from despite the amount being 'fair value'. In FFP terms that's not as daft as it sounds apparently.That it doesn't matter if ADUG provided the money to Etihad, as long as Etihad met the sponsorship contract terms and they were reasonable. So if the money goe ADUG --> Etihad --> City, he's claiming that's fine.
My view is that this would be seen as disguised equity investment and clearly contrary to FFP. Fortunately we never had to test that disagreement though.
Centurions
Well-Known Member
If it was true and provable of course. Are you thinking of someone in particular?Would any other PL team have difficulty on that point if actually charged?
crazyg
Well-Known Member
It would be as about as much as use as teaching quantum mechanics to an amoeba.Keep going PB your insight and patient reminders are much appreciated. Some posters could re-read earlier threads and posts before asking their questions - the answer to many are available. Maybe you could create a MCFC / FFP accredited learning module and it could become an entry requirement for membership on BM?
Maybe our ‘journalist‘ friends could take it.
(Sorry in advance if I'm being disrespectful to the amoeba population)
The Light Was Yellow Sir
Well-Known Member
Politicians?Is there a more contemptible, dishonest, morally deficient industry existent in this country of ours, than so called 'journalism',I very much doubt it.
Onholiday(somemightsay)
Well-Known Member
Brilliant write up as usual PB - I know we as a fanbase have gone round the houses on the 'fair market value' predicament, but how the hell would any governing body ever be able to penalise someone (and or where does it start and end)?I'll try. Under FFP, an owner can put in funds to cover a small amount of losses or they can put in funds via sponsorships.
Sheikh Mansour could put a billion pounds in our bank account but we can only spend that money in line with our revenue, and that billion pounds isn't classed as revenue as it goes on our balance sheet. However ADUG could sponsor us for a billion pounds, and that would be revenue, as it would appear on the Profit and Loss account.
FFP seeks to stop this and says that any entity defined as a related party (which is an established accounting concept) can only introduce sponsorship revenue if that contract represents fair market value. That means if it's what an unrelated third party would pay. The going rate for shirt sponsorships is now probably around £40-45m for clubs in our position so if ADUG sponsored us for £100m, that wouldn't be regarded as fair market value. Or if it paid us that for a full page advert in the programme.
To be precise, they could do that (sponsor our shirt for £100m a year) but we'd have to disregard a lot of that for FFP purposes. UEFA might only allow us to recognise £45m of that £100m as revenue, although it'd still be sat in our bank account. That happened with PSG and Qatar, where they had to disregard most of the €200m that Qatar put in as sponsorship.
If, however, the entity sponsoring us isn't classed as a related party, there is no concept of fair market value and they can pay us whatever they like. City (and our auditors) do not regard Etihad as a related party and, even if it was, the sponsorship was generally regarded (by UEFA and CAS) as representing fair value. But there's more.
The whole point of UEFA's charges, and the CAS case, was that Etihad was only paying a small part of their sponsorship and that the bulk of the money was coming from someone else. UEFA (or the CFCB to be precise) felt it was ADUG, whereas the CAS hearing showed it came from central funds supplied by the Executive Affairs Authority to Etihad (which I'd discovered some years ago). EAA isn't a related party to City so in that case, it didn't matter where Etihad got their money from. They paid us a certain amount and they got commercial exposure commensurate with what they paid.
If, on the other hand, CAS had found that ADUG had routed money into City via Etihad, it's 99% certain we would have been found to have contravened FFP and the ban would almost certainly have been upheld. Stefan, for all the brilliant work he's done on the legal side of this, is wrong to say that it didn't matter where those additional funds came from. It was quite simply the core issue at the heart of the CFCB's charges and the CAS hearing.
It mattered very much in fact. ADUG = ban, not ADUG = no ban.
It would be a bit like Leeds United getting a fine or ban for managing to hold out for £30m for Rio Ferdinand in '02(?).
Or conversely, say the club put ticket prices up to £200 per game and we all continued to go, would they then be able to levy the argument based on everyone else charging a lot less?
Doesn't stack up to me.............
Onholiday(somemightsay)
Well-Known Member
Wouldn't Bayern struggle with this?Would any other PL team have difficulty on that point if actually charged?
Adidas and Mercedes (?) part own the club, so their sponsorship money would have to be deducted?
Prestwich_Blue
Well-Known Member
Probably not. The point of related parties is that they have to have some element of control. We have an Etihad director on the board but he's not considered to have day-to-day control of wither City or Etihad. Khladoon chairs the EAA I think but even as chairman of City, EAA isn't considered a related party.Wouldn't Bayern struggle with this?
Adidas and Mercedes (?) part own the club, so their sponsorship money would have to be deducted?
German football is totally without any corruption, Uli Hoeness told me this from his prison cell.Wouldn't Bayern struggle with this?
Adidas and Mercedes (?) part own the club, so their sponsorship money would have to be deducted?