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

[Lancet Fluke]

Re: City & FFP (continued)

Just one question from a person with no grasp of finances , investment and the law:
Would the circumstances we are facing now have been possible in any other sphere of business within the EU, is there any other market in which these restrictions( punishments ) could be applied by a group of businesses on another business operating in the same market?

No.

That's pretty much what I thought .
Why then ( another simple , but I hope not stupid question ) does Uefa think that they can operate in this manner, contrary to laws which apply to every other sphere of business?
Have they become so consumed with self - importance that they think they are above the law?
Or has their unchallenged term of football omnipotence led them to believe that somehow they are different from everyone else and that they can make rules which are patently illegal?
I am confused.

I think I'm right in saying that sports can claim to get some special treatment with regards to some aspects of business law. But presumably a sporting body has to be able to fully justify what it's doing to get a court to ok something that may technically be illegal in usual business word. Surely FFP in its current format and the alleged punishment would never be seen as justified though, UEFA have utterly taken the piss which is a massive mistake on their part.

 

[aguero93:20]

Re: City & FFP (continued)

Just one question from a person with no grasp of finances , investment and the law:
Would the circumstances we are facing now have been possible in any other sphere of business within the EU, is there any other market in which these restrictions( punishments ) could be applied by a group of businesses on another business operating in the same market?

No.

That's pretty much what I thought .
Why then ( another simple , but I hope not stupid question ) does Uefa think that they can operate in this manner, contrary to laws which apply to every other sphere of business?
Have they become so consumed with self - importance that they think they are above the law?
Or has their unchallenged term of football omnipotence led them to believe that somehow they are different from everyone else and that they can make rules which are patently illegal?
I am confused.

It's a strange one alright but they have previously shown that they think they are above the law when they tried to ignore the treaty of Rome, which resulted in the Bosman Ruling in 1995.
My point of view on it is that they seem to think that Sport can be treated as a special case, unfortunately it's a mega money business that employs and is watched by millions the world over.
Another point to consider is that this is far from the first attempt by any dominant body/entity in any market to change the rules to protect themselves and to form a Cartel. Outside of South America and Asia though, none have really been successful.

 

[hertsblue]

Re: City & FFP (continued)

I cant see how they think 40 million a year for shirt and stadium sponsorship is over valued. Christ teams have lots more than this now for shirts alone. 25 million for training kits and the like. Look at our league position over the last few years, exposure in press Ethiad have had. If anything we should be able to get 40+ million for shirt sponsorship alone, 20-30 million for stadium, 15+ million for training kit and that's without anything for the campus do double what we currently get which seems very cheap given our standing now

 

[Mraitch]

Re: City & FFP (continued)

My theory now is that UEFA have realised that FFP is not enforceable but do not want to scrap it for fear of upsetting the G14. They are goading City in to action so it all falls apart in court and City are seen as the villains whilst UEFA can say to the G14 that they tried.

 

[Blue Mooner]

Re: City & FFP (continued)

Is it just me or are UEFA making up all of this as they go along?

also, how can anyone other than the investor know what is a 'good deal'? If DHL think paying however much to sponsor Uniteds training kit is good value for them then that is fine, the same for city and Etihad airways. Besides, I thought the main issue with FFP was to guard against clubs spending beyond their means, if they are getting good money for sponsorship, then that is more money in football and at the end of the day it trickles down to UEFA. They need to stop moaning and look at the real financial issues in football like paying over £50 to watch city play Villa.

This all day long. It seems that we have 'failed' FFP because UEFA doesn't think our deals are worth what they think their worth. I'm sorry, but they are worth what someone is prepared to pay. Also why is our revenue being arbitrarily disallowed on spurious grounds, yet the rags took 100 million of income through selling shares in the club on the any stock exchange, where's the 'fairness' of that and what is different between thousands of shareholders handing over dosh to the rags and our single shareholder handing over dosh to us? Why is one more virtuous or 'fair' than the other?

 

[Lancet Fluke]

Re: City & FFP (continued)

My theory now is that UEFA have realised that FFP is not enforceable but do not want to scrap it for fear of upsetting the G14. They are goading City in to action so it all falls apart in court and City are seen as the villains whilst UEFA can say to the G14 that they tried.

Except that Gill is right in the thick of it all at UEFA so that theory wouldn't quite stack up.

 

[Gordyola]

Re: City & FFP (continued)

Just one question from a person with no grasp of finances , investment and the law:
Would the circumstances we are facing now have been possible in any other sphere of business within the EU, is there any other market in which these restrictions( punishments ) could be applied by a group of businesses on another business operating in the same market?

No.

That's pretty much what I thought .
Why then ( another simple , but I hope not stupid question ) does Uefa think that they can operate in this manner, contrary to laws which apply to every other sphere of business?
Have they become so consumed with self - importance that they think they are above the law?
Or has their unchallenged term of football omnipotence led them to believe that somehow they are different from everyone else and that they can make rules which are patently illegal?
I am confused.

This is the answer that UEFA give to the legality http://www.uefa.com/community/news/newsid=2064391.html

9) Is FFP in line with European law?

UEFA has been in permanent dialogue with the European Commission about financial fair play and has received continued support for this initiative. There is also a joint statement from the UEFA President and the EU commissioner for competition, emphasising the consistency between the rules and objectives of financial fair play and the policy aims of the EU commission in the field of state aid.

They can of course claim all they want and the commission can agree with them but it's worthless until tested in law

 

[Matty]

Re: City & FFP (continued)

The main issue here seems to be one of viewpoint.

UEFA (via PWC) have assessed our accounts and deemed us to have failed FFP.

We had our accounts assessed by Deloittes amongst others and they deemed our accounts to have passed FFP.

UEFA are trying to punish us as they say we've failed.

We don't believe we've failed at all.

However the process UEFA have in place has no element within it to challenge the decision on FFP, all we can do is challenge the punishment they are trying to apply.

Why, if we don't believe we've failed at all, should we accept any form of punishment for failing?

As UEFA don't actually provide a forum by which we can challenge the pass/fail decision on FFP (just the punishment on failing) then we surely have no real course of action other than to go to the Court of Arbitration for Sport (CAS) and challenge the way in which UEFA have applied the rules. The 2 key elements to this would be the Etihad deal and UEFA's (believed) decision that this is a related party, and inflated value one at that, and the (believed) exclusion of the sale of Intellectual Property. CAS should be able to make a decision, based upon UEFA's own FFP rules, as to whether the Etihad deal should indeed have been classed as a related party one (I simply can't see how UEFA can view it as one when their own measures are identical to the ones used in most western countries, and which clearly demonstrate it NOT to be related). They should also be able to decide whether the value of the Etihad deal (£40m p.a.) was inflated (again I can't see how they have reached that decision given DHL paid United £10m a year to sponsor their training kit only, and AON have signed a deal worth circa £20m a year to sponsor United's training ground only). CAS will also be able to see whether or not the removal of the IP sale is something UEFA is able to do within the FFP rules they've followed (there is nothing, as far as I can tell, that specifically allows them to do so. The only potential loophole they may have used is to deem the IP sale to a "third party", whom City will not confirm the identity of, as a "related party" as they are unable to confirm that it is not a related party without knowing who the third party actually is. However, even in this scenario, you'd have thought a suspended punishment, until such time as City are able to announce the name of the third party, and an accurate assessment of their "third party" status, or lack thereof, could be made, would have been a more apt punishment to apply).

City didn't really want to go down the legal challenge route, of that I'm certain, however UEFA seem to have given them no choice. UEFA may very well live to regret this hardline stance on City's FFP situation, they've poked the tiger with a stick a little too hard, they will need to be prepared for a ferocious response.

 

[welsh_andy]

Re: City & FFP (continued)

my question is that if uefa are so confident over this, then why do they offer to negotiate rather than just enforcing a punishment

 

[Roosty]

Re: City & FFP (continued)

Latest article from Ben Rumsby in the Telegraph:


Manchester City prepared to fight on to avoid world-record £50m fine despite risking heavier sanction

Premier League title favourites will fight European football’s Club Financial Control Body for a more lenient sanction until Friday afernoon's deadline

By Ben Rumsby

11:12AM BST 08 May 2014

It is already deep into extra-time, but Manchester City’s battle to avoid a world-record £50 million fine for breaching Uefa’s Financial Fair Play regulations is poised to go to penalty kicks on Friday.

European football’s Club Financial Control Body is ready for the overwhelming Premier League title favourites to fight for a more lenient sanction right up until Friday afternoon’s deadline for accepting or rejecting their guilt.

City and the CFCB’s investigatory chamber have been at loggerheads for more than a week over what is known as a ‘settlement’ penalty, which the club have been offered after being adjudged to have broken FFP rules.


The proposed punishment of a fine of just under £50m and cut in their Champions League squad from 25 to 21 players is open to negotiation, but the parties are so far apart that there is a real danger of no agreement being reached.


Should City fight on, they risk an even heavier sanction if found guilty by the CFCB’s adjudicatory chamber, including possible expulsion from the Champions League.


Both sides were waiting on Thursday to see who would blink first, although there was increasing confidence that common sense would ultimately prevail.

If negotiations do go to the wire, plans to formally announce the outcome of the process will almost certainly be postponed until Monday.

City, who are likely to be crowned Premier League champions on Sunday, have been emboldened by the CFCB’s decision to give them and eight other clubs found guilty of FFP breaches an extra week to agree a settlement.

But they also risk isolating themselves, with the remaining teams all poised to accept their fates, including Paris St Germain.

PSG were offered a near-identical settlement to City, something which irked the Abu Dhabi-owned club, who believe the type of breach committed by their Qatar-bankrolled counterparts to be far more serious.

Indeed, they have yet to formally acknowledge their own guilt, having expressed confidence before submitting their 2011-13 accounts that they would pass the FFP test.

Their £149m losses over that period far exceeded the permitted £37.2m limit but the club believed they would narrowly achieve that target once relevant deductions were taken into account.

They also remain adamant their £350m sponsorship deal with Etihad is not a ‘related-party’ transaction which would make it an invalid means of balancing their books under FFP.

The CFCB was taking one final look at City’s accounts on Thursday to satisfy itself of the extent of their breach and whether it is indeed comparable to that of PSG.