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

[BlueAnorak]

How does FFP really work with transfer fees? Is it based on the headline figure, eg £32m for Mangala, or is it based on how his fee is paid to his former club, eg £8m per year for four years? I don't know the exact figures or the means of payment, I only ask regarding the principle that is applied as FFP to one person in authority might mean something entirely different to another similarly in a position of authority.

Under FFP and all football club accounts, the transfer fee is amortised over the length of the players new contract - regardless of how the transfer is paid for. The method of payment does however affect the club's cash flow and cash reserves. It is the reason why City purchases in 2010 and 2011 affect us now.

 

[BlueAnorak]

Let's just go through the UEFA penalty statement again...

In this regard, Manchester City undertakes to report a maximum break-even deficit of EUR 20 Mio. for the financial year ending in 2014 and a maximum breakeven deficit of EUR 10 Mio. for the financial year ending in 2015. In this context

Our FFP calculation for season 2014/15 (City accounts with additional FFP deductions) cannot result in an FFP loss of £16m.
Our FFP calculation for season 2015/16 (City accounts with additional FFP deductions) cannot result in an FFP loss of £8m.
The accounts for 2013/14 show a loss of £7m (ecluding the £16m FFP penalty). With FFP deductions for infrastructure this will take our FFP calculation to an FFP profit. Probably several millions. The same will apply for season 2014/15 (new training ground) & 205/16 (South Stand).

certain commercial partnerships were subject to examination. In order to avoid dispute and for the avoidance of doubt, Manchester City has agreed that for the period of the settlement it will not seek to improve the financial terms of two second tier commercial partnerships.

City can't improve commercial deals with TWO 2nd tier sponsors in Abu Dhabi with firms where I believe Sheikh Mansour is a major shareholder or is a director or has direct major influence. An insignificant penalty really.

 Furthermore Manchester City agrees that revenues from the sale of assets within their group structure will not be included in future break-even calculations.

We lose about £15m of revenue that was in the 2013/14 accounts from selling IPR to City Group. Not a great loss as it will be replaced by around £50m of new commercial revenue. We also can't sell players to other group companies with the revenue being excluded from FFP calcs.

 Manchester City accepts that employee benefit expenses cannot be increased during the next two financial periods (2015 & 2016). If Manchester City meets the annual break-even requirements outlined above, this spending limit will be removed for the 2016 financial period.

Can't increase more is the wage bill above 2013/14 levels. Not much of a problem as £30 was Mancini & his coaches pay-off. Contract renegotiations have reduced FFP Amortisation & the wage bill too (as a larger percentage is performance related and thus excluded from FFP).

 Manchester City accepts that for the duration of the settlement it will be subject to a limitation on the number of players that it may include on the “A” list for the purposes of participation in UEFA competitions. Specifically, for season 2014/15 Manchester City may only register a potential maximum of 21 players on the “A” list, instead of the potential maximum of 25 as foreseen in the relevant competition regulations. If MC manages to comply with the annual break-even target the club shall be released from the restriction as regards the registration of players in UEFA club competitions for the 2015/16 season.

This is the harshest penalty as it basically means we can't but a player without moving another on.
Only applies to this season if for FFP purposes this season if we only make an FFP loss of less than £16m.Should easily be achieved.

 Manchester City agrees to significantly limit spending in the transfer market for seasons 2014/2015 and 2015/2016. Manchester City further accepts a calculated limitation on the number of new registrations it may include within their “A” List for the purposes of participation in UEFA competitions. This calculation is based on the clubs net transfer position in each respective registration period covered by
this agreement.

Goodness knows what this really means. The club statement says it is a limit of €60m (£47m) for last summer only. But mentions nothing for subsequent windows. The UEFA statement indicates that there is some sort of limit in January and next summer.
We shall have to see exactly what this is.

 Manchester City agrees to pay a total amount of EUR 60 Mio. which will bewithheld from any revenues it earns from participating in UEFA competitions commencing in season 2013/14. Of this EUR 60 Mio. an amount of EUR 40 Mio. will be withheld conditionally and will be returned to Manchester City if the club fulfils the operational and financial measures agreed with the UEFA CFCB.

Basically we have only been fined €20m (£16m) if we make the FFP targets specified above.

All in all I think our chairman is right. It is just a pinch on City's road to world domination.

 

[Damocles]

certain commercial partnerships were subject to examination. In order to avoid dispute and for the avoidance of doubt, Manchester City has agreed that for the period of the settlement it will not seek to improve the financial terms of two second tier commercial partnerships.

City can't improve commercial deals with 2nd tier sponsors in Abu Dhabi with firms where Sheikh Mansour is a major shareholder or is a director of.

That's not what that says. It points to two specific second tier commercial deals which City have agreed not to currently seek improved terms upon. Not all second tier, not Mansour related second tier are included, just those two specific ones.

 

[BlueAnorak]

certain commercial partnerships were subject to examination. In order to avoid dispute and for the avoidance of doubt, Manchester City has agreed that for the period of the settlement it will not seek to improve the financial terms of two second tier commercial partnerships.

City can't improve commercial deals with 2nd tier sponsors in Abu Dhabi with firms where Sheikh Mansour is a major shareholder or is a director of.

That's not what that says. It points to two specific second tier commercial deals which City have agreed not to currently seek improved terms upon. Not all second tier, not Mansour related second tier are included, just those two specific ones.

Agreed it is two specific ones. but it is not Etihad - which is great news!
I believe one is AABAR that is 71% owned by the International Petroleum Investment Company that Sheikh Mansour sits on the board of - so he exhorts some sort of control on that companies policy.

I changed the comment to read:
City can't improve commercial deals with TWO 2nd tier sponsors in Abu Dhabi with firms where I believe Sheikh Mansour is a major shareholder or is a director or has direct major influence. An insignificant penalty really.

 

[john@staustell]

I'm always intrigued by this deal with Nissan at Yokohama Marinos.

Does anybody know why we own 20% of Yokohama Marinos? What possible benefit can it be except for the tie-up with Nissan?

Surely if CFG can put 100M into Yokohama (outside of mcfc accounts) then Nissan can put 100M into City? Just as an example.

There was some meaningless statement about cooperation or something at the time.

 

[moomba]

Re: City & FFP (continued)

I'm always intrigued by this deal with Nissan at Yokohama Marinos.

Does anybody know why we own 20% of Yokohama Marinos? What possible benefit can it be except for the tie-up with Nissan?

Surely if CFG can put 100M into Yokohama (outside of mcfc accounts) then Nissan can put 100M into City? Just as an example.

There was some meaningless statement about cooperation or something at the time.

There are rumours that we are looking to increase the stake and that Nissan arent really interested in keeping theirs.

J League rule changes are being considered that will make it easier for foreign investment in Japan football.

 

[SilverFox2]

I'm always intrigued by this deal with Nissan at Yokohama Marinos.

Does anybody know why we own 20% of Yokohama Marinos? What possible benefit can it be except for the tie-up with Nissan?

Surely if CFG can put 100M into Yokohama (outside of mcfc accounts) then Nissan can put 100M into City? Just as an example.

There was some meaningless statement about cooperation or something at the time.

There are rumours that we are looking to increase the stake and that Nissan arent really interested in keeping theirs.

J League rule changes are being considered that will make it easier for foreign investment in Japan football.

That coupled with any non football program that Nissan may have in the future. that ADUG may want to invest in ?

 

[jonmcity]

Could be that Nissan think that linking themselves with the best football club in the world, with the best prospects in the world is a good idea.

 

[tolmie's hairdoo]

It would appear we have been allowed to book the entire amount of the Negredo sale in this current monitoring period - about £27m inc £3m loan fee.

We had a £13m underspend from the summer.

In essence, we have around £40m to spend in this window BEFORE any sales of Guidetti, Sinclair and Nastasic.

Bony is more than covered, as is the potential for another circa £20m plus player if we so wished.

More and more, I believe UEFA and City concocted this whole show.

 

[Didsbury Dave]

It would appear we have been allowed to book the entire amount of the Negredo sale in this current monitoring period - about £27m inc £3m loan fee.

We had a £13m underspend from the summer.

In essence, we have around £40m to spend in this window BEFORE any sales of Guidetti, Sinclair and Nastasic.

Bony is more than covered, as is the potential for another circa £20m plus player if we so wished.

More and more, I believe UEFA and City concocted this whole show.

Correct mate. Mullock's got the steer. And we appear to be structuring deals around milestones, ensuring that large payments fall outside the accounting period.

I think City struck a deal they were happy with, having UEFA largely over a barrel with regards to ramifications, and UEFA went along with it on the understanding that the wider perception was that the punishment was much more severe than it was. I sensed it at the time with our bullish statement.