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

[BluessinceHydeRoad]

Re: City & FFP (continued)

So no sanctions whatsoever then?

Well if we make it inside the 45m mark after the pre-2010 exemption has been applied then the most they can do IIRC is warn us over future conduct and since we're very quickly heading towards break-even that will probably go something along the lines of:
CFCB "Are you going to pass next year and the year after?"
MCFC "Yes"
CFCB "OK then"
It really would be complete madness for UEFA to try anything else if we have reasonable grounds to say that we've complied with their regulations and that we will continue to do so in future. Especially since the CAS have shedloads of previous history for throwing any decision/sanction by UEFA that they have felt to be Frivolous/Biased/Illegal out at the first time of asking and in double quick time.

As I understand it, we submit our figures to the English Club Licensing Panel and they clearly show we've failed. We then go to the UEFA Investigatory Panel as one of the 76 clubs and they apply the pre-2010 rule. If we'd passed that test then there should be no further sanctions in principle but I suspect that they've queried the sale of player IP rights and we've refused to say who we've sold it to. In that case, we'd have failed but we should have been able to show we're on course to comply this year. So I agree it would be madness to come down too hard on us.

However UEFA may feel they have to be seen to do something in order to appease to old G14.

Thanks PB, a voice of calm reason among a rising tide of anger and panic. Those who are suggesting ways to increase revenue streams and sponsorship opportunities - you needn't worry, because however experienced and wise you are, you don't rank with the Sheikh's advisers!

The Independent first tells us that UEFA have "announced" the dreadful news, but can't actually tell us what the news is, other than that we "appeared...to have paid the price", though no-one seems to know what that price is, for "a financial arrangement" which "has never been attempted by a football club before". It can only tell us what the penalty/price "could" be.

It is unlikely that any of this that turns out to be true comes as a surprise to the club, who have kept UEFA informed of what the club is doing for 5 years and it is unlikely that any sanction will cause alarm. It is unlikely that City will got to court, because a case is already under way and because the club sees the regulations as of no relevance to the club in the future. UEFA has to be very careful too. A ban from European competition as a first instance would almost certainly be seen as anti-competitive, a wage cap for a European squad would also have real legal difficulties because the players are under contract and a transfer ban would be fraught as well. A fine would raise problems as well since it is difficult to argue that investment is a sin which has to be eradicated, but not investing in fines! I suspect we'll get a letter from UEFA which we can ignore. Neither club nor body want a fight over one year's figures which won't be relevant next May and which might get really messy, especially if the Glazers, Henry VIII and Kroenke/the Sermonizer get involved and give the appearance of acting as a cartel.

 

[I'm no cynic but...]

Hi, does anyone have a quick balance sheet of the true figures for recent years? (i mean back of a beermat sort of stuff)

I keep reading we lost £149m in the last 2 seasons but i know this to be balls, i just wondered if anyone knew the quick true figures?

TIA

Those are the true losses from the audited accounts over 2 years. They have not been adjusted for FFP exemptions, and given that City do not publish accounts for FFP purposes, they can only be estimated. Those who have tried to do so see City as a marginal pass/fail. But that's assuming UEFA accept our accounts. There are some things in their eg sale of intellectual assets and the Etihad deal which have been contentious. They might argue with them

They might also look at the trajectory of losses, and give themselves a pat on the back. "MCFC are proof FFP is working" as losses have nose-dived from £200m to £100m to £50m.

We don't know what UEFA have concluded yet so there's no point reacting

ok thanks, i wasn't aware City didn't publish the FFP adjusted accounts. I assume the money spent on youth development all gets taken out of the £149m loss? But i understand the Etihad deal is contentious.

I post a clip taken from the Wikipedia article on FFP. Under the section headed 'Potential loopholes', it says...

"Other commentators pointed to actual and possible loopholes in the legislation itself, for example, up until the end of the 2014-15 season, clubs will be allowed to exclude from the calculation the wages signed before June 2010 as long as they can show an improved trend in their accounts. There is also the potential for legal action to overturn the legislation and for larger clubs to artificially raise their income from massive sponsorship deals or stadium naming rights via companies with a vested interest in the club's success, or from the sales of 'overseas rights' to consortiums without clearly identified investors.[61]

There are claims that this has already started in the case of Manchester City,[62] where four of the club's eight main sponsors-Etihad Airways, Abu Dhabi Tourism Authority, telecoms giant Etisalat and Aabar, a global investment company dealing in oil are ultimately owned by the United Arab Emirates government, of which Manchester City owner Sheikh Mansour is one of the Deputy Prime Ministers."[63]

Using this extract as a guide, City have no worries over the trend factor, and can legally challenge FFP anyway, but what is clearly being implied by UEFA is that the brown envelopes have been doing the rounds in the UAE, and this implication isn't going to make Sheikh Mansour a happy man.

 

[M18CTID]

Re: City & FFP (continued)

If they come down hard on us then surely we'd simply take them to court, whether it be CAS or straight to the EU, and we'd win. FFP is, by almost every measure you chose to use, contrary to EU law. Add to that the fact it is in no way the best way of dealing with financial issues and UEFA haven't got a leg to stand on. UEFA can't even claim the FFP is the "best they can do" with regards to addressing financial concerns. Blocking City spending millions because "it isn't fair to other clubs" isn't a legitimate reason to do so, they need to demonstrate that they are trying to protect us from ourselves, given the direction our finances are heading in, and the way the investment in our club has been handled, it's clear to anyone that FFP in it's current state is simply not required to "protect" City, all it does is restrict us.

Going to court and publicly taking on UEFA and the rest of the big clubs to defend massive spending is everything our owners do not want to do as they build a self funding world class sports organisation. I would imagine only if UEFA did something incredibly dramatic like kick is out and put united into Europe would we even consider it. If you want to create a world class advert to gain long term investment in your country big public legal cases where the media and lost of football will be against us is totally counter productive.
We won't go legal but we won't need to

We wouldn't be going to court to defend our spending, we'd be going to court to challenge the draconian punishment handed down via flawed and, highly likely to be illegal, legislation. Also we wouldn't be taking on the big clubs, just UEFA.

I don't think UEFA will do very much at all to City in terms of a punishment, at the worst they'll hand us an insignificant fine. As I said early though, I'd be interested to see whether we'd challenge ANY form of punishment. If we accept the punishment is it implied that we've accepted the legitimacy of FFP?

Providing the punishment isn't a draconian one and doesn't smack of a witch hunt, would there be any point in us even taking UEFA on given that next year onwards we should be home and hosed re meeting FFP? I appreciate the regs stink a fair bit in their current form, but if the punishment isn't going to affect us too much I'd sooner see other clubs dragging UEFA through the courts. By all accounts, we've been in regular dialogue with UEFA over this and I'm not sure it's in the interest of either party to piss each other off.

 

[fbloke]

Re: City & FFP (continued)

I do wonder how UEFA would deal with the City Football Group in general.

The whole idea of such an interconnected group of clubs is new and it could be argued that it means that FFP is impossible to adhere to due to the structure of the CFG.

You have 3 (growing to 6 eventually I hear) clubs that exist in very different footballing regions and under very different financial regulations, but they share costs where possible, swap staff and have a group ethos so far removed from the one club model as to lead MCFC to ask UEFA to prove how such a group could ever pass FFP in its current form?

If the rumours of the IP deal causing the FFP fail are true, I would think City and CFG could turn round and ask if FFP is not in fact very significantly limiting the ability of MCFC (A UK Limited company) to trade at a profit at all?

 

[BluessinceHydeRoad]

Re: City & FFP (continued)

How can UEFA stop a player playing in tbe CL.

Imagine us signing Mangala, and then we/UEFA tell him he(or another player) can't play in the CL due to FFPR rules.

Restriction of trade?

-- Tue Apr 29, 2014 1:06 pm --

How can UEFA stop a player playing in tbe CL.

Imagine us signing Mangala, and then we/UEFA tell him he(or another player) can't play in the CL due to FFPR rules.

Restriction of trade?

Nope not restriction of trace because UEFA competitions are invite tournaments. You win the right to be invited which can be revoked if they deem you to have broken rules they set in place. Also he will still be able to play for the club as well in other tournaments and it will be for the club to decide how to handle his loss in money

Just the way Sky TV can "invite" you to pay thier price to watch PL football and not allow anyone else to show it on their network? Restriction of trade? Abuse of monopoly position?

 

[fbloke]

Re: City & FFP (continued)

How can UEFA stop a player playing in tbe CL.

Imagine us signing Mangala, and then we/UEFA tell him he(or another player) can't play in the CL due to FFPR rules.

Restriction of trade?

-- Tue Apr 29, 2014 1:06 pm --

How can UEFA stop a player playing in tbe CL.

Imagine us signing Mangala, and then we/UEFA tell him he(or another player) can't play in the CL due to FFPR rules.

Restriction of trade?

Nope not restriction of trace because UEFA competitions are invite tournaments. You win the right to be invited which can be revoked if they deem you to have broken rules they set in place. Also he will still be able to play for the club as well in other tournaments and it will be for the club to decide how to handle his loss in money

I think you are wrong there. If they are using their invitation only tournaments to keep some club's growth and revenues below the levels of the existing recipients of such invites then you have an illegal cartel which would likely man that UEFA and the clubs who benefit from the cartel would ALL be financially punished.

FFP has to be proved to be both relevant and proportionate and thats why they will not impose significant fines and why they are very unlikely to ban clubs from playing in the CL / EL.

 

[aguero93:20]

Re: City & FFP (continued)

How can UEFA stop a player playing in tbe CL.

Imagine us signing Mangala, and then we/UEFA tell him he(or another player) can't play in the CL due to FFPR rules.

Restriction of trade?

-- Tue Apr 29, 2014 1:06 pm --

How can UEFA stop a player playing in tbe CL.

Imagine us signing Mangala, and then we/UEFA tell him he(or another player) can't play in the CL due to FFPR rules.

Restriction of trade?

Nope not restriction of trace because UEFA competitions are invite tournaments. You win the right to be invited which can be revoked if they deem you to have broken rules they set in place. Also he will still be able to play for the club as well in other tournaments and it will be for the club to decide how to handle his loss in money

Just the way Sky TV can "invite" you to pay thier price to watch PL football and not allow anyone else to show it on their network? Restriction of trade? Abuse of monopoly position?

This is the key one, while UEFA are associated with FIFA, who hold a monopoly position and while UEFA are negotiating massive contracts to show club and international football as well as handing out prizemoney, any attempt to limit investment or spending in a business environment can be challenged as the highlighted. There's plenty of precedents both in Europe and worldwide and if ruled to those precedents UEFA would lose.

 

[SI's Bald Head]

Re: City & FFP (continued)

A mate of mine tells me that IF, and it's obviously a very big IF, NYCFC were to buy Messi for £250M and loan him to MCFC for the whole duration of the contract, there is absolutely nothing that UEFA, or FIFA can do about it. This is one of the may areas that FFP, in my opinion, will fail

I do wonder how UEFA would deal with the City Football Group in general.

The whole idea of such an interconnected group of clubs is new and it could be argued that it means that FFP is impossible to adhere to due to the structure of the CFG.

You have 3 (growing to 6 eventually I hear) clubs that exist in very different footballing regions and under very different financial regulations, but they share costs where possible, swap staff and have a group ethos so far removed from the one club model as to lead MCFC to ask UEFA to prove how such a group could ever pass FFP in its current form?

If the rumours of the IP deal causing the FFP fail are true, I would think City and CFG could turn round and ask if FFP is not in fact very significantly limiting the ability of MCFC (A UK Limited company) to trade at a profit at all?

 

[BlueAnorak]

Re: City & FFP (continued)

I doubt MCFC will allow UEFA to look at the IPR deal in terms of non-financial detail as they believe the details will be leaked. .The fact that our name was leaked yesterday kind of proves the point.
It wouldn't surprise me in the least if UEFA were not prepared to pick up the penalty clauses for any leaks hitting the press.

 

[Chippy_boy]

Re: City & FFP (continued)

This is the basis upon which the Bosman lawyer has launched his legal challenge to the FFP rules:

“We’re challenging one rule, which is the break-even rule,” he says. “This says that the owner of the club can’t overspend even if it is with his own money. This is not in line with EU law.”
The ‘break-even’ rule is perhaps the most fundamental element of FFP, but in the complaint filed with the European Commission in May 2013, Dupont outlines the impact it could have on almost every part of the game.
“The break-even rule prevents football clubs from freely determining their level of expenses, since it imposes a ceiling on their deficit, a limit to their investment, even if such deficit/investment is entirely covered by the owners. In particular, the clubs are limited in their freedom to hire players, since the break-even rule confines the amount of transfer fee and salaries clubs can offer.”
And the impact on the players?
“By the same token, some football players will not be transferred [as such transfers will not take place] and some players will be offered lower salaries. Even more, some players will not be offered a renewal of contract - even on lower conditions - or a first contract.”

Read more at <a class="postlink" href="http://www.fourfourtwo.com/features/bosman-lawyer-battling-ffp-were-happy-man-city-we-dont-want-another-pompey#flhBilIZAsVltydJ.99" onclick="window.open(this.href);return false;">http://www.fourfourtwo.com/features/bos ... sVltydJ.99</a>

 

[aguero93:20]

Re: City & FFP (continued)

A mate of mine tells me that IF, and it's obviously a very big IF, NYCFC were to buy Messi for £250M and loan him to MCFC for the whole duration of the contract, there is absolutely nothing that UEFA, or FIFA can do about it. This is one of the may areas that FFP, in my opinion, will fail

I think some MLS regulations with regard to player transfers and loans could still put a stop to that though.

 

[fbloke]

Re: City & FFP (continued)

I doubt MCFC will allow UEFA to look at the IPR deal in terms of non-financial detail as they believe the details will be leaked. .The fact that our name was leaked yesterday kind of proves the point.
It wouldn't surprise me in the least if UEFA were not prepared to pick up the penalty clauses for any leaks hitting the press.

It also means that player's private financial details will have to be seen by other clubs too. How else would they challenge things without knowing the details?

Thats why having Gill and others involved is tantamount to a cartel proving its own existence.

 

[Edwaardz]

Re: City & FFP (continued)

So is it correct to believe they won't be able to sanction us in any way that will affect the Premier League? e.g deducted league points

 

[fbloke]

Re: City & FFP (continued)

So is it correct to believe they won't be able to sanction us in any way that will affect the Premier League? e.g deducted league points

Completely separate things.<br /><br />-- Tue Apr 29, 2014 2:08 pm --<br /><br />

A mate of mine tells me that IF, and it's obviously a very big IF, NYCFC were to buy Messi for £250M and loan him to MCFC for the whole duration of the contract, there is absolutely nothing that UEFA, or FIFA can do about it. This is one of the may areas that FFP, in my opinion, will fail

I think some MLS regulations with regard to player transfers and loans could still put a stop to that though.

AL Galaxy and Beckham seemed to do OK though ;-)

 

[Matty]

Re: City & FFP (continued)

A mate of mine tells me that IF, and it's obviously a very big IF, NYCFC were to buy Messi for £250M and loan him to MCFC for the whole duration of the contract, there is absolutely nothing that UEFA, or FIFA can do about it. This is one of the may areas that FFP, in my opinion, will fail

I do wonder how UEFA would deal with the City Football Group in general.

The whole idea of such an interconnected group of clubs is new and it could be argued that it means that FFP is impossible to adhere to due to the structure of the CFG.

You have 3 (growing to 6 eventually I hear) clubs that exist in very different footballing regions and under very different financial regulations, but they share costs where possible, swap staff and have a group ethos so far removed from the one club model as to lead MCFC to ask UEFA to prove how such a group could ever pass FFP in its current form?

If the rumours of the IP deal causing the FFP fail are true, I would think City and CFG could turn round and ask if FFP is not in fact very significantly limiting the ability of MCFC (A UK Limited company) to trade at a profit at all?

No clue about the legitimacy of that statement, however what is beyond argument is that NYCFC are outside of UEFA's remit and, as such, FFP has no bearing whatsoever on what NYCFC can do.<br /><br />-- Tue Apr 29, 2014 2:10 pm --<br /><br />

So is it correct to believe they won't be able to sanction us in any way that will affect the Premier League? e.g deducted league points

Completely separate things.

-- Tue Apr 29, 2014 2:08 pm --

A mate of mine tells me that IF, and it's obviously a very big IF, NYCFC were to buy Messi for £250M and loan him to MCFC for the whole duration of the contract, there is absolutely nothing that UEFA, or FIFA can do about it. This is one of the may areas that FFP, in my opinion, will fail

I think some MLS regulations with regard to player transfers and loans could still put a stop to that though.

AL Galaxy and Beckham seemed to do OK though ;-)

True, but that was always in the MLS close season. There may well be rules and regulations regarding what can, and can't happen, when the MLS season is actually taking place.

 

[Chippy_boy]

Re: City & FFP (continued)

A mate of mine tells me that IF, and it's obviously a very big IF, NYCFC were to buy Messi for £250M and loan him to MCFC for the whole duration of the contract, there is absolutely nothing that UEFA, or FIFA can do about it. This is one of the may areas that FFP, in my opinion, will fail

I think some MLS regulations with regard to player transfers and loans could still put a stop to that though.

We have a load of sticks we could beat UEFA with if we chose to. We could certainly circumvent their rules in a much bigger piss-take than we have taken already. There's selling us some massive Abu Dhabi oil business for £1 and calling it "Manchester City xyz" for example. We could bring in any amount of revenue we liked by doing that. Or Sheikh Mansour could transfer £1bn from one company he owns to City and we could then take the £50m or so per year in interest as revenue as well. Or the loan scenario above. Or we could take them to court and stuff their entire little system.

The point is though, we are not doing any of those things. We are saying to UEFA, OK we will play by your silly rules, but if we play nice to you, you must play nice to us. No silly sanctions and we won't do silly things to make a mockery of your system. UEFA are not stupid, they know what the consequences would be if they tried to introduce sanctions we were not "happy" with.

 

[aguero93:20]

Re: City & FFP (continued)

I doubt MCFC will allow UEFA to look at the IPR deal in terms of non-financial detail as they believe the details will be leaked. .The fact that our name was leaked yesterday kind of proves the point.
It wouldn't surprise me in the least if UEFA were not prepared to pick up the penalty clauses for any leaks hitting the press.

It also means that player's private financial details will have to be seen by other clubs too. How else would they challenge things without knowing the details?

Thats why having Gill and others involved is tantamount to a cartel proving its own existence.

We shouldn't have to let UEFA, or Gill, examine anything like that unless they're willing to pick up a punitive damages bill if it gets into the Public domain. There's no reason PWC shouldn't be allowed to see it though, they are bound by confidentiality, I doubt they'd even reveal details to UEFA, just an opinion.

 

[Prestwich_Blue]

Re: City & FFP (continued)

I doubt MCFC will allow UEFA to look at the IPR deal in terms of non-financial detail as they believe the details will be leaked.

Interesting thought is that assuming this is a proper commercial deal and is being kept quiet pending some grand announcement then, if or when it is finally announced, we'd presumably be in the clear. So I'd expect a suspended punishment if we'd said we won't reveal the third party until we're ready to do so. Because once it's in the public domain then it can go back into the revenue stream.

 

[aguero93:20]

Re: City & FFP (continued)

I doubt MCFC will allow UEFA to look at the IPR deal in terms of non-financial detail as they believe the details will be leaked.

Interesting thought is that assuming this is a proper commercial deal and is being kept quiet pending some grand announcement then, if or when it is finally announced, we'd presumably be in the clear. So I'd expect a suspended punishment if we'd said we won't reveal the third party until we're ready to do so. Because once it's in the public domain then it can go back into the revenue stream.

Still though, if that is the case there shouldn't be a problem with PWC examining the deal and giving the CFCB an opinion on it's legitimacy, rendering a suspended punishment unnecessary.

 

[halfcenturyup]

Re: City & FFP (continued)

Then it would be a related party transaction and would have to be at a fair value which would include fee amortisation and salary. Also, commercial rights could be a problem and, as already mentioned somewhere, it isn't the capital outlay that may be a problem with buying Messi, it's the increased cost which would have to be covered by additional revenues to avoid losses and, at fair value, this idea doesn't make any difference.

So no, I don't think so.

A mate of mine tells me that IF, and it's obviously a very big IF, NYCFC were to buy Messi for £250M and loan him to MCFC for the whole duration of the contract, there is absolutely nothing that UEFA, or FIFA can do about it. This is one of the may areas that FFP, in my opinion, will fail

I do wonder how UEFA would deal with the City Football Group in general.

The whole idea of such an interconnected group of clubs is new and it could be argued that it means that FFP is impossible to adhere to due to the structure of the CFG.

You have 3 (growing to 6 eventually I hear) clubs that exist in very different footballing regions and under very different financial regulations, but they share costs where possible, swap staff and have a group ethos so far removed from the one club model as to lead MCFC to ask UEFA to prove how such a group could ever pass FFP in its current form?

If the rumours of the IP deal causing the FFP fail are true, I would think City and CFG could turn round and ask if FFP is not in fact very significantly limiting the ability of MCFC (A UK Limited company) to trade at a profit at all?