BluessinceHydeRoad
Well-Known Member
- Joined
- 26 Mar 2012
- Messages
- 2,562
Re: City & FFP (continued)
I have a number of queries about all this. Perhaps one of the accountants on here could help me.
It appears (we can't put it more strongly than this as yet!) that it is the Etihad deal which has caused City's problem and the Qatari deal which has got Paris in hot water. Leaving aside the figures and avoiding a comparison, is it likely to be true that UEFA consider both to be related party deals? I know that the auditors have to draw the attention of the shareholders to this if it is the case, but what is the reason for this? I believe, but I am not an accountant, that this is so shareholders can question the value of the deal and judge whether they believe it to be a use of the company's resources of which they approve. What I wish to know is whether that is the limit of flagging up RPDs? If an RPD reflects the will of the shareholders then it is a valid use of their resources?
Now, in the case of Etihad, the head of European operations has always said that the deal is justified on purely commercial grounds. "If the numbers didn't add up we wouldn't be doing this" is what he said when the deal was announced. That view has not changed in 4 years since. In the eyes of the law do UEFA have a scrap of a right to question the commercial judgement of those running an international airline? Are there any circumstances that the courts would accept UEFA as, in any way, a body competent or entitled to do this?
The ramifications are incalculable. Etihad agreed a deal for a limited period to pay City £X pa and they agreed what this money was to be used for, in particular, maybe even exclusively, to help with the construction and development costs of the training complex. The deal is to last 10 years and is justified (if it has to be to anyone but shareholders) because the Etihad airline is developing Manchester as a hub airport and wish to associate themselves with the local football club. They wish to help grow the club so that it becomes part of an increasing story of success which reflects well on the airline. But 4 years down the line along come UEFA to tell them that they're paying too much and that they won't let the club spend all of the monies without severe punishments meant to compromise the aim of the deal. Would Etihad airline not feel they had a watertight case against the mischievous commercial interference UEFA are now practising? What could the penalties for UEFA be? And what might the impact on the attitude of other sponsors of football clubs, notably but not exclusively, Emirates airline? Would they want to risk Platini and his bunch of footballers f***ing up their expenditure plans in four years time? Might the courts be rather alarmed at UEFA's concern for fair value? And the precise criteria they use?
I have a number of queries about all this. Perhaps one of the accountants on here could help me.
It appears (we can't put it more strongly than this as yet!) that it is the Etihad deal which has caused City's problem and the Qatari deal which has got Paris in hot water. Leaving aside the figures and avoiding a comparison, is it likely to be true that UEFA consider both to be related party deals? I know that the auditors have to draw the attention of the shareholders to this if it is the case, but what is the reason for this? I believe, but I am not an accountant, that this is so shareholders can question the value of the deal and judge whether they believe it to be a use of the company's resources of which they approve. What I wish to know is whether that is the limit of flagging up RPDs? If an RPD reflects the will of the shareholders then it is a valid use of their resources?
Now, in the case of Etihad, the head of European operations has always said that the deal is justified on purely commercial grounds. "If the numbers didn't add up we wouldn't be doing this" is what he said when the deal was announced. That view has not changed in 4 years since. In the eyes of the law do UEFA have a scrap of a right to question the commercial judgement of those running an international airline? Are there any circumstances that the courts would accept UEFA as, in any way, a body competent or entitled to do this?
The ramifications are incalculable. Etihad agreed a deal for a limited period to pay City £X pa and they agreed what this money was to be used for, in particular, maybe even exclusively, to help with the construction and development costs of the training complex. The deal is to last 10 years and is justified (if it has to be to anyone but shareholders) because the Etihad airline is developing Manchester as a hub airport and wish to associate themselves with the local football club. They wish to help grow the club so that it becomes part of an increasing story of success which reflects well on the airline. But 4 years down the line along come UEFA to tell them that they're paying too much and that they won't let the club spend all of the monies without severe punishments meant to compromise the aim of the deal. Would Etihad airline not feel they had a watertight case against the mischievous commercial interference UEFA are now practising? What could the penalties for UEFA be? And what might the impact on the attitude of other sponsors of football clubs, notably but not exclusively, Emirates airline? Would they want to risk Platini and his bunch of footballers f***ing up their expenditure plans in four years time? Might the courts be rather alarmed at UEFA's concern for fair value? And the precise criteria they use?