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

Re: City & FFP (continued)

Prestwich_Blue said:
jollylescott said:
Bottomless_Sailor said:
Good read:
<a class="postlink" href="http://www.financialfairplay.co.uk/latest-news/reports-of-record-%8060m-%A349m-fine-for-psg-and-man-city" onclick="window.open(this.href);return false;">http://www.financialfairplay.co.uk/late ... d-man-city</a>

Seems petty technicalities led to us failing by such a huge margin, rather than just a couple of million. No way should we be remotely considering accepting these draconian punishments.
This is indeed an interesting article and it looks like the lowering of the value of the Etihad deal plus IP rights has led to us not being able to offset the 11/12 wages.
Except we seem to have been previously given the nod that they're alright. There is nothing in FFP that allows UEFA to exclude the sale of IP rights. As long as it's football related then it's alright (barring related party transactions).

That kind of depends on what (and which) PWC said to the UEFA star chamber. Related party deals are fine BUT it depends on what fair value is assigned to the deal. If PWC say "It's unique in football so we can't give it a value" then the STAR chamber could reduce it's value - possibly to 0. That way we just fail if the wages are taken into account so the wages are not taken into account so we fail by £80m+. Ed Thompson in this instance is probably correct in his assumption (not his thought though, it is the thought of an Italian Investment Banker).
 
Re: City & FFP (continued)

Might be better to just not bother with the CL next year and win the PL instead....never thought I'd say that!

If the rags can be out one year and attract top players then so can we.
 
Re: City & FFP (continued)

MC ID said:
Prestwich_Blue said:
Gillespie said:
That bit at the end in brackets might be the justification
It might but Etihad is not a related party and our auditors are not the only accountants who have looked at it and come to that conclusion.

It's quite possible in fact that one of the accountancy firms that agreed they weren't is the same one that may have said they were.

Errr I'm pretty sure that would be highly illegal of that firm and would fuck them over.

It depends. All the big accountancy/business service firms are split into smaller separate LLP (Limited Liability Partnerships) that work in individual jurisdictions - they only talk to each other at a Senior Partner level. For example PWC (UK) may give one view - wheres PWC (Switzerland) may give another.
 
Re: City & FFP (continued)

Cobwebcat said:
Might be better to just not bother with the CL next year and win the PL instead....never thought I'd say that!

If the rags can be out one year and attract top players then so can we.

We could win all three domestic trophies (+charity shield) next season if we didn't bother with CL to be fair.
 
Re: City & FFP (continued)

Marvin said:
MSP said:
Marvin said:
The only logical explanation for the large sanction is here:



This is bad news in respect of this year as it provides UEFA with a rationale for their sanctions.

However there's no major material impact on the future Etihad Income.

We need to ensure that if we take a fine, we can pass in future. If that's the case, then we're talking about a one-off hit which isn't as bad. However the fine itself may also affect the future break-even calculation.

I think it's posted that fine does not affect any future break-even calculation. It's counted as a loan from owner.
Looks like that's arguable

Interestingly, BBC’s 5 Live’s @richard_conway reports that the fine is actually a phased deduction from central Champions League prize revenue over three seasons. If this were the case, then it seems likely that the deduction WOULD impact the Break Even test present issues in future years.

So depending where we finished, we would only get between £10mill and £15mill from any CL run in the next 3 seasons.

But how does the new BT CL TV deal balance that out?

That new BT CL TV detail has gone through the roof, money wise.
 
Re: City & FFP (continued)

BlueAnorak said:
Prestwich_Blue said:
jollylescott said:
This is indeed an interesting article and it looks like the lowering of the value of the Etihad deal plus IP rights has led to us not being able to offset the 11/12 wages.
Except we seem to have been previously given the nod that they're alright. There is nothing in FFP that allows UEFA to exclude the sale of IP rights. As long as it's football related then it's alright (barring related party transactions).

That kind of depends on what PWC said to the UEFA star chamber. Related party deals are fine BUT it depends on what fair value is assigned to the deal. If PWC say "It's unique in football so we can't give it a value" then the STAR chamber could reduce it's value - possibly to 0. That way we just fail if the wages are taken into account so the wages are not taken into account so we fail by £80m+. Ed Thompson in this instance is probably correct in his assumption (not his thought though, it is the thought of an Italian Investment Banker).
I can't quite make up my mind if Ed (or his informant) is right in this. Here's what the relevant part of Annex XI says:
ii) It proves that the aggregate break-even deficit is only due to the annual break-even deficit of the reporting period ending in 2012 which in turn is due to contracts with players undertaken prior to 1 June 2010 (for the avoidance of doubt, all renegotiations on contracts undertaken after such
date would not be taken into account).
So if I read that right, if we report a deficit in the reporting period ending 2013 which would not in itself cause us to fail but the reason for the failure is the deficit in the previous year, then we can use this get-out. That would have been the case if all our revenue was allowed.

But here's what it says in the bit about assessment procedures:
2. Having read the auditor’s report on the annual and interim financial statements, the licensor must assess it according to the items below:
a) If the auditor’s report has an unqualified opinion, without any modification, this provides a satisfactory basis for granting the licence.
So if we've got a clean audit report, they are legally bound to accept it , it would appear. But they haven't done that from what we can see and have disallowed some income.

FFP has this to say about non-relevant income:
k) Income from non-football operations not related to the club
The income (and expenses – see part C(1)(k)) of non-football operations only needs to be excluded from the calculation of relevant income if it is clearly and exclusively not related to the activities, locations or brand of the football club, in which case it must be excluded.

Examples of activities that may be reported in financial statements as non-
football operations but for the purposes of the calculation of relevant income and expenses would not normally need to be adjusted include:
• Operations based at, or in close proximity to, a club’s stadium and training facilities such as a hotel, restaurant, conference centre, business premises (for rental), health-care centre, other sports teams; and
• Operations clearly using the name/brand of a club as part of their operations.
The sale of IP rights would seem to fall into the second bullet point at least, if not actually classed as part of our football-related income.
 
Re: City & FFP (continued)

As I've already posted, I think City will either revisit current sponsorship deals if we win the league again, or go all out and sign some massive new sponsorship deals to make up the money UEFA are planning to take off us.
 
Re: City & FFP (continued)

jrb said:
As I've already posted, I think City will either revisit current sponsorship deals if we win the league again, or go all out and sign some massive new sponsorship deals to make up the money UEFA are planning to take off us.

Won't UEFA just decide that they are "unfair" too though? I mean, even if they are with non-UAE companies, the timing would be so propitious that surely UEFA would have no choice but to go "you pulled strings to get this deal. Nope. Not going to happen"
 
Re: City & FFP (continued)

jrb said:
As I've already posted, I think City will either revisit current sponsorship deals if we win the league again, or go all out and sign some massive new sponsorship deals to make up the money UEFA are planning to take off us.
If we're Premiership Champions in a prospective 62k stadium we should be able to ramp up our Commercial Income significantly. The stadium itself will generate extra Match Day revenue
 

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