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

[swinton blue]

This may have been asked before
Wouldn't the prem league sign off on any new sponsorship deals before they were formally released by the club ?
Like the hotel in Abu Dhabi. We show the league how much the deal is worth. They get there experts to look over it for fair value and then say yes OK. We realease sponsorship details to the media ?

 

[citizen_maine]

This may have been asked before
Wouldn't the prem league sign off on any new sponsorship deals before they were formally released by the club ?
Like the hotel in Abu Dhabi. We show the league how much the deal is worth. They get there experts to look over it for fair value and then say yes OK. We realease sponsorship details to the media ?

As I understood it, it is a test for fair value. They can't stop the deal but if they consider it inflated, they can reduce the amount we can count in our FFP calculation (same as Eufa)

 

[halfcenturyup]

This may have been asked before
Wouldn't the prem league sign off on any new sponsorship deals before they were formally released by the club ?
Like the hotel in Abu Dhabi. We show the league how much the deal is worth. They get there experts to look over it for fair value and then say yes OK. We realease sponsorship details to the media ?

You mean under the new rules?

IIRC, there is no requirement for a pre-approval, but if the PL determines an "associated" deal to be over market value, the club must amend its deal accordingly and return any "excess" monies received. Which, I would imagine, will lead to some interesting Newcastle-driven legal cases.

Edit: replying to above post, pretty sure the PL expects monies to be returned and contracts amended, not just an amendment to income for FFP purposes.

 

[swinton blue]

As I understood it, it is a test for fair value. They can't stop the deal but if they consider it inflated, they can reduce the amount we can count in our FFP calculation (same as Eufa)

Thanks
So we can sign whatever sponsorship deal but can only put through what they deem as fair market value for ffp

 

[swinton blue]

You mean under the new rules?

IIRC, there is no requirement for a pre-approval, but if the PL determines an "associated" deal to be over market value, the club must amend its deal accordingly and return any "excess" monies received. Which, I would imagine, will lead to some interesting Newcastle-driven legal cases.

Edit: replying to above post, pretty sure the PL expects monies to be returned and contracts amended, not just an amendment to income for FFP purposes.

Would a pre approval put in with these new rules stop all the sniping and cheating comments from everyone though ?

 

[Prestwich_Blue]

As I understood it, it is a test for fair value. They can't stop the deal but if they consider it inflated, they can reduce the amount we can count in our FFP calculation (same as Eufa.

That's correct. Nothing to stop a club taking the money but the test will restrict how much of that sponsorship can be used to establish profit or loss. PL rules are lighter than UEFA though, allowing a maximum loss of £135m over a 3-year period.

 

[halfcenturyup]

That's correct. Nothing to stop a club taking the money but the test will restrict how much of that sponsorship can be used to establish profit or loss. PL rules are lighter than UEFA though, allowing a maximum loss of £135m over a 3-year period.

Is that new? I was pretty sure I read they would expect contracts to be adjusted ...

 

[SilverFox2]

That's correct. Nothing to stop a club taking the money but the test will restrict how much of that sponsorship can be used to establish profit or loss. PL rules are lighter than UEFA though, allowing a maximum loss of £135m over a 3-year period.

Thanks for that PB.
However what is there to prevent certain teams not being investigated (despite obvious financial contravention) and others having an arbitrary fairness rule ruthlessly applied?

 

[Prophet of Doom]

Newcastle have far more to fear from these changes than City.

City could comfortably prove fair value on all commercial deals considered ‘related’ due to brand size / success.

Newcastle will find it very difficult to do the same

 

[Prestwich_Blue]

,

Thanks for that PB.
However what is there to prevent certain teams not being investigated (despite obvious financial contravention) and others having an arbitrary fairness rule ruthlessly applied

Who knows. Depends on the transparency of the process I suppose and given the PL's history, and commercial sensitivities, I doubt there will be a publicly available monthly digest of all the deals submitted.