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

[Chippy_boy]

Re: City & FFP (continued)

Well we could presumably have got Etihad to pay us more, so we passed. But by doing that, UEFA might have taken a different view on the deal and asked more questions or declared it a related party transaction. But by not doing that, we didn't draw attention to the Etihad deal but got them so worked up about the IP sales and the calculation of the wages paid to players signed pre-June 2010 that they just waved it through. Having done that made it difficult for UEFA to go back on that decision and also, having seen what PSG were told was "fair value", it gave us a yardstick for our own deals.

Of course I could be completely overestimating the cunning and subtlety of our owners and we could just have failed FFP because we weren't clever enough.

I thought you and various others had agreed that the deal was not a related party deal though? Also, if it has been deemed to not be a 3rd party deal (nefariously or otherwise) then 'fair value' is irrelevant isn't it?

Certainly City didn't declare it as a Related Party Transaction but it's all about interpretation, rather than being absolutely black and white.

I agree to an extent. But the accounting standards do seek to apply objective tests such that these things are not hanging on subjective interpretations. So the criteria are largely Boolean - does crterion xyz apply or not, yes or no. Even things like "significant influence" is measured according to objective tests. So in theory, subjectivity and interpretation should not come into it.

However, this is UEFA we are talking about and I am rarely shocked at how bent they can be. The other thing is, have they ever confirmed that they are conforming to IAS24 rules with regards to FFP assessment? They have lifted the relevant text from IAS24 so we are assuming the IAS guidelines would also be used, but I don't think UEFA ever confirmed that to be the case, and if that is so, there's the coach and horses loophole they would need right there.

 

[M18CTID]

Re: City & FFP (continued)

Didn't UEFA down value PSG's big sponsorship deal to around £80 million per annum? And by extension, surely that means we could legitimately get the same amount off Etihad (even if they were deemed a related party) and not fall foul?

 

[Prestwich_Blue]

Re: City & FFP (continued)

I thought you and various others had agreed that the deal was not a related party deal though? Also, if it has been deemed to not be a 3rd party deal (nefariously or otherwise) then 'fair value' is irrelevant isn't it?

Certainly City didn't declare it as a Related Party Transaction but it's all about interpretation, rather than being absolutely black and white.

So in theory, subjectivity and interpretation should not come into it. However, this is UEFA we are talking about and I am rarely shocked at how bent they can be.

That's exactly what I meant.

 

[M18CTID]

Re: City & FFP (continued)

Just thought, how good would it be to announce the sponsorship deals and put a statement out that all our deals "must be dynamic and must be able to evolve constantly"

I like it :)

Also, announcing each deal day by day like we did with the player contracts just before the start of the season would gain maximum exposure and royally piss off all our rivals into the bargain!

 

[80s Shorts]

Re: City & FFP (continued)

I hope City have a training kit sponsor on the horizon as well (as we don't have currently)?, could bring significant amount of money that as well.

Khaldoon's Kabs?

Kebabs mate.

 

[BlueAnorak]

Re: City & FFP (continued)

Here's the key part:
Fill yer boots City. I'd even go so far as to speculate as to whether City deliberately set out to fail FFP in order to distract UEFA's attention, although that would be incredibly Machiavellian.

Explain please

Well we could presumably have got Etihad to pay us more, so we passed. But by doing that, UEFA might have taken a different view on the deal and asked more questions or declared it a related party transaction. But by not doing that, we didn't draw attention to the Etihad deal but got them so worked up about the IP sales and the calculation of the wages paid to players signed pre-June 2010 that they just waved it through. Having done that made it difficult for UEFA to go back on that decision and also, having seen what PSG were told was "fair value", it gave us a yardstick for our own deals.

Of course I could be completely overestimating the cunning and subtlety of our owners and we could just have failed FFP because we weren't clever enough.

I think you actually have a point PB.
I certainly think that City knew they would just fail FFP as they knew they would be unable to exclude pre June 2010 wages as a result of changes to the FFP submittal spreadsheet and framed subsequent accounts accordingly. My guess is to clarify the probable rules on City Group / MCFC interaction - but hey - why not also clarify rules on what existing sponsor income was Related Party/Fair Value and what was "unlimited" valid income.

 

[BertTrautmann'sParachute]

Re: City & FFP (continued)

Just thought, how good would it be to announce the sponsorship deals and put a statement out that all our deals "must be dynamic and must be able to evolve constantly"

Like it. We could do it just before the derby match. And perhaps throw in something about doing things the 'right way'.

 

[Chippy_boy]

Re: City & FFP (continued)

Explain please

Well we could presumably have got Etihad to pay us more, so we passed. But by doing that, UEFA might have taken a different view on the deal and asked more questions or declared it a related party transaction. But by not doing that, we didn't draw attention to the Etihad deal but got them so worked up about the IP sales and the calculation of the wages paid to players signed pre-June 2010 that they just waved it through. Having done that made it difficult for UEFA to go back on that decision and also, having seen what PSG were told was "fair value", it gave us a yardstick for our own deals.

Of course I could be completely overestimating the cunning and subtlety of our owners and we could just have failed FFP because we weren't clever enough.

I think you actually have a point PB.
I certainly think that City knew they would just fail FFP as they knew they would be unable to exclude pre June 2010 wages as a result of changes to the FFP submittal spreadsheet and framed subsequent accounts accordingly. My guess is to clarify the probable rules on City Group / MCFC interaction - but hey - why not also clarify rules on what existing sponsor income was Related Party/Fair Value and what was "unlimited" valid income.

Really? All in the indication at the time was that we were shocked to have be deemed to have failed. Of course that could be a bluff on our part, but it sure didn't look like it. The other thing is, if we were going to miss and we knew it, why on earth would we have been so careful as to only miss by a tiny amount? We might as well have gone down the PSG route if we knew we would miss.

 

[BillyShears]

Re: City & FFP (continued)

Well we could presumably have got Etihad to pay us more, so we passed. But by doing that, UEFA might have taken a different view on the deal and asked more questions or declared it a related party transaction. But by not doing that, we didn't draw attention to the Etihad deal but got them so worked up about the IP sales and the calculation of the wages paid to players signed pre-June 2010 that they just waved it through. Having done that made it difficult for UEFA to go back on that decision and also, having seen what PSG were told was "fair value", it gave us a yardstick for our own deals.

Of course I could be completely overestimating the cunning and subtlety of our owners and we could just have failed FFP because we weren't clever enough.

I think you actually have a point PB.
I certainly think that City knew they would just fail FFP as they knew they would be unable to exclude pre June 2010 wages as a result of changes to the FFP submittal spreadsheet and framed subsequent accounts accordingly. My guess is to clarify the probable rules on City Group / MCFC interaction - but hey - why not also clarify rules on what existing sponsor income was Related Party/Fair Value and what was "unlimited" valid income.

Really? All in the indication at the time was that we were shocked to have be deemed to have failed. Of course that could be a bluff on our part, but it sure didn't look like it. The other thing is, if we were going to miss and we knew it, why on earth would we have been so careful as to only miss by a tiny amount? We might as well have gone down the PSG route if we knew we would miss.

I think because from the day Khaldoon came in the mantra has always been that he wanted City to be self sufficient and they had a plan on how to get us there.

It's slowly coming to fruition now and I suspect the new raft of sponsorship deals are going to put us in a position where FFP will never again be an issue. Hence Khaldoon referred to this summer's sanctions as a "pinch".

 

[George Hannah]

Re: City & FFP (continued)

Do you think they've got this thread open on their laptops in Nyon as we post?