City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

[SilverFox2]

Re: City & FFP (continued)

The use of owners money to finance a clubs development is apparently the target for FFP regs..
What about if the owners decide to go public to raise cash on the stock exchange (like say the Glazers). Is any cash derived from the sale of these shares subject to operational constraints ?

In other words must the owners of the shares only use the cash generated this way for personal gain and not use any portion of it for investment in the club ?

It's revenue versus expenses. That's the break-even calculation

Raising money through a share issue would not count as revenue, but you could use it to finance expenditure. Not sure if that's what you are asking

I think when a Company lists it's shares they have to state in their listing documents what the Capital Issue is for

I use MUFC as an example only but as I understand your answer the Glazers have recently sold about 5 or 7.5% of their stock exchange listed shares so I wondered if any portion of this could be used to for example to buy players without being subject to FFP rules ?

 

[1.618034]

Re: City & FFP (continued)

I look forward to the day in the near future when we won't have to discuss this because it will be irrelevant to us. :-)

Welcome to the future.

 

[aguero93:20]

Re: City & FFP (continued)

The use of owners money to finance a clubs development is apparently the target for FFP regs..
What about if the owners decide to go public to raise cash on the stock exchange (like say the Glazers). Is any cash derived from the sale of these shares subject to operational constraints ?

In other words must the owners of the shares only use the cash generated this way for personal gain and not use any portion of it for investment in the club ?

It's revenue versus expenses. That's the break-even calculation

Raising money through a share issue would not count as revenue, but you could use it to finance expenditure. Not sure if that's what you are asking

I think when a Company lists it's shares they have to state in their listing documents what the Capital Issue is for

I use MUFC as an example only but as I understand your answer the Glazers have recently sold about 5 or 7.5% of their stock exchange listed shares so I wondered if any portion of this could be used to for example to buy players without being subject to FFP rules ?

They could list it as club related income in the same way you'd use interest on a bank balance or charges on a loan adversely. However let me assure you, Uncle Malc left the shop in shit and they're scrambling to keep afloat. We should wish them every success, don't want them selling the club.

 

[cleavers]

Re: City & FFP (continued)

I look forward to the day in the near future when we won't have to discuss this because it will be irrelevant to us. :-)

I'm pretty sure that day has already arrived, barring UEFA and wenger getting more rule changes.

I hear the latest (united/arsenal/liverpool) proposal is that all players on 5 year contracts are banned for a full season.

 

[Marvin]

Re: City & FFP (continued)

The use of owners money to finance a clubs development is apparently the target for FFP regs..
What about if the owners decide to go public to raise cash on the stock exchange (like say the Glazers). Is any cash derived from the sale of these shares subject to operational constraints ?

In other words must the owners of the shares only use the cash generated this way for personal gain and not use any portion of it for investment in the club ?

It's revenue versus expenses. That's the break-even calculation

Raising money through a share issue would not count as revenue, but you could use it to finance expenditure. Not sure if that's what you are asking

I think when a Company lists it's shares they have to state in their listing documents what the Capital Issue is for

I use MUFC as an example only but as I understand your answer the Glazers have recently sold about 5 or 7.5% of their stock exchange listed shares so I wondered if any portion of this could be used to for example to buy players without being subject to FFP rules ?

My understanding is that if they used the proceeds of the share issue to buy players, the costs of those would still feature under expenses, and they'd have to find revenue to net off against those expenses.

There is something in the regulations which allows for an increased loss where a club owner agrees to cover the loss by pumping money into a club and they could do that by issuing shares in the club if they so wished. Potentially that could help reduce FFP sanctions but that's a very roundabout way of trying to make a connection between issuing shares and beating FFP and I don't think it's what you were thinking of

 

[Damanino]

Re: City & FFP (continued)

How big those bonuses could be that Txiki is handing out to players these days?

I would think they could be significant otherwise players would not accept it easily.

Other factor is the activation of the bonuses. Do they depend on winning PL, CL etc, or maybe pretty easy like reaching a CL place (top4), getting out of CL group, getting into domestic cup semifinals.

If players and their agents see that bonuses can be activated nearly automatically of course they would agree to it. But thats not so clever as the club would have to pay them out nearly always.

they are either huge bonuses or not that huge ones but activated easily. Or little bit of both.
(But if Aguero was on 200k/week, and now on 150k/week + 50k/week (in one lump sum) if a trophy is won that is hardly a good offer from the olayer's point of view. But if its 150k/week +another 150k/week as long as we finish top3 and get out of CL group thats a toally different scenario.)

Other thing is maybe bonuses dont count for the wage limit we have by Uefa but I think they will count in the breakeven calculations end of season if the bonuses actually paid out.
Otherwise we could offer unreal mega bonuses and end up with a wage list of 200m but if we win the league bonuses would cost like another 200m. Hard to think that Uefa wouldnt care about it and we could only calculate with 200m wages.

For the wage limit they accept and calculate with basic wages but there is also a breakeven limit that says we cant lose more than 10m€ for 14-15 season.
(And 20m€ for 13-14.)
In that any bonuses paid out will count imo.

 

[CheethamHillBlue]

Re: City & FFP (continued)

I look forward to the day in the near future when we won't have to discuss this because it will be irrelevant to us. :-)

I'm pretty sure that day has already arrived, barring UEFA and wenger getting more rule changes.

I hear the latest (united/arsenal/liverpool) proposal is that all players on 5 year contracts are banned for a full season.

You can bet your balls the next challenge will be English players.
Arsenal - Chambers
Rags - Shaw
Liverpool - Lambert, Lalana

On top of their already top heavy English players, they will try and push this through and get a few years grace before it's blocked for restraint of trade.

 

[M18CTID]

Re: City & FFP (continued)

This is hilarious - some clown on RAWK is convinced these new 5 year deals for Silva, Kompany, and Aguero is merely a ploy to circumvent FFP.

And there was me thinking that it was just a great bit of business to tie down the spine of our team to long-term deals as it gives us a huge amount of stability and security going forward.

 

[mancity dan]

Re: City & FFP (continued)

How big those bonuses could be that Txiki is handing out to players these days?

I would think they could be significant otherwise players would not accept it easily.

Other factor is the activation of the bonuses. Do they depend on winning PL, CL etc, or maybe pretty easy like reaching a CL place (top4), getting out of CL group, getting into domestic cup semifinals.

If players and their agents see that bonuses can be activated nearly automatically of course they would agree to it. But thats not so clever as the club would have to pay them out nearly always.

they are either huge bonuses or not that huge ones but activated easily. Or little bit of both.
(But if Aguero was on 200k/week, and now on 150k/week + 50k/week (in one lump sum) if a trophy is won that is hardly a good offer from the olayer's point of view. But if its 150k/week +another 150k/week as long as we finish top3 and get out of CL group thats a toally different scenario.)

Other thing is maybe bonuses dont count for the wage limit we have by Uefa but I think they will count in the breakeven calculations end of season if the bonuses actually paid out.
Otherwise we could offer unreal mega bonuses and end up with a wage list of 200m but if we win the league bonuses would cost like another 200m. Hard to think that Uefa wouldnt care about it and we could only calculate with 200m wages.

For the wage limit they accept and calculate with basic wages but there is also a breakeven limit that says we cant lose more than 10m€ for 14-15 season.
(And 20m€ for 13-14.)
In that any bonuses paid out will count imo.

There will be no extra expenditure for us for players bonuses as haven't we got insurance policies, that if we win trophies that the insurance policy pays out and that would cover the bonuses?

 

[MeatHunterrr]

Re: City & FFP (continued)

How big those bonuses could be that Txiki is handing out to players these days?

I would think they could be significant otherwise players would not accept it easily.

Other factor is the activation of the bonuses. Do they depend on winning PL, CL etc, or maybe pretty easy like reaching a CL place (top4), getting out of CL group, getting into domestic cup semifinals.

If players and their agents see that bonuses can be activated nearly automatically of course they would agree to it. But thats not so clever as the club would have to pay them out nearly always.

they are either huge bonuses or not that huge ones but activated easily. Or little bit of both.
(But if Aguero was on 200k/week, and now on 150k/week + 50k/week (in one lump sum) if a trophy is won that is hardly a good offer from the olayer's point of view. But if its 150k/week +another 150k/week as long as we finish top3 and get out of CL group thats a toally different scenario.)

Other thing is maybe bonuses dont count for the wage limit we have by Uefa but I think they will count in the breakeven calculations end of season if the bonuses actually paid out.
Otherwise we could offer unreal mega bonuses and end up with a wage list of 200m but if we win the league bonuses would cost like another 200m. Hard to think that Uefa wouldnt care about it and we could only calculate with 200m wages.

For the wage limit they accept and calculate with basic wages but there is also a breakeven limit that says we cant lose more than 10m€ for 14-15 season.
(And 20m€ for 13-14.)
In that any bonuses paid out will count imo.

There will be no extra expenditure for us for players bonuses as haven't we got insurance policies, that if we win trophies that the insurance policy pays out and that would cover the bonuses?

Yeah, for example for winning CL you get about £50-60 million cash that should cover the bonuses easily. And Premier League TV money + prize money will cover that as well. I don't think that there are MANY easy bonuses most of them are based on individual success and/or team success.