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

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 ?
 
swinton blue said:
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 ?
Click to expand...
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)
 
swinton blue said:
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 ?
Click to expand...
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.
 
citizen_maine said:
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)
Click to expand...
Thanks
So we can sign whatever sponsorship deal but can only put through what they deem as fair market value for ffp
 
halfcenturyup said:
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.
Click to expand...
Would a pre approval put in with these new rules stop all the sniping and cheating comments from everyone though ?
 
citizen_maine said:
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.
Click to expand...
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.
 
Prestwich_Blue said:
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.
Click to expand...
Is that new? I was pretty sure I read they would expect contracts to be adjusted ...
 
Prestwich_Blue said:
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.
Click to expand...
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?
 
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
 
,
SilverFox2 said:
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
Click to expand...
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.
 
swinton blue said:
Thanks
So we can sign whatever sponsorship deal but can only put through what they deem as fair market value for ffp
Click to expand...
I thought that only applies to Related parties. If say Amazon wanted to give us 500 million a year to sponsor us then that wouldn’t be a related party so would be fine, but deals with companies who have ties to SM, would be subject to fair value.
 
willipp said:
I thought that only applies to Related parties. If say Amazon wanted to give us 500 million a year to sponsor us then that wouldn’t be a related party so would be fine, but deals with companies who have ties to SM, would be subject to fair value.
Click to expand...
more than likly but amazon deliver parcels in abu dhabi so related party comes into play
 
halfcenturyup said:
This is what I remembered reading at the time @Prestwich_Blue. Are there other rules about the FFP result? There may well be. I didn't see many pages.View attachment 35149
Click to expand...
I was about to plow through all that for my next KotK piece but it does seem that, rather than require a write-down to what they consider to be FMV, the excess money has to be returned or the transaction aborted completely.

UEFA would allow them to keep the money but only report revenue according to FMV. So you've got two different rules between the two bodies covering the same circumstance. Be interesting to see how that holds up in court.

Can you imagine the government requiring a shop to refund you because they've charged you more than Tesco or Amazon for the same product?
 
CFG deals are going to be interesting. Say we do a deal for £100m, and claim City are due £80m of that, but 'fair value' says our share is only worth £60m, do we just give the other £20m to the other clubs in CFG?
 
I believe that this is indeed part of a campaign waged by the American owned clubs to ensure that the only finance coming into the game comes through those streams which favour them so that a hefty proportion of that finance doesn't actually stay in the game for very long. This approach is typical of corporate America where legislation appear to be a weapon to make competition difficult rather that promote prosperity and consumer satisfaction through competition. But the "sneaky six" or whatever we want to call them seem to be driven to ever more desperate lengths to force English football down a road which is quite clearly contrary to tradition and law. FFP limited owner investment despite the clear statement in both UK and EU law that any attempt to do so is prohibited and any sanctions imposed to enforce such a step are null and void. The courts have shown on several occasions that the football authorities must obey the law of the land not the wishes of those running the game. Steps to impose "fair market value" and ideas on "associated party deals" are no more than mumbo jumbo to disguise the fact that the revenues of clubs owned by non-Americans will be controlled and their decisions made for them by their "competitors". Not only does this appear aimed at ruining clubs owned by those from a specific area but it seems to be the work of a cartel. Even worse it sends out the message to the British government that it may encourage and welcome investment from the UAE and Saudi Arabia in every sector of the UK economy apart from football, where there investment must be subject to approval by an American cartel. The courts will not be interested in the rules of the game but they will be very interested in upholding the law of the land.

They may also be more interested in the finances of some of the cartel than in those of Manchester City which have been subjected to hostile forensic examination on more than one occasion. Why are the accounts of a club not far from here filed in a tax haven? Why do they pay so little in tax? I'm sure that some big city law firms can find many more questions that a certain club might not want asking, before other clubs are asked about sponsorship deals. The cartel may find that not only do they lose but they also get a very bloody nose.
 
halfcenturyup said:
This is what I remembered reading at the time @Prestwich_Blue. Are there other rules about the FFP result? There may well be. I didn't see many pages.View attachment 35149
Click to expand...
“Where …..the board determines in its reasonable opinion that the relevant transaction is evidently not at fair market value….”
The lawyers will argue for years about this alone, apart from the fact that the “Board” will have to be seen to be acting without any consideration of vested interests, and reasonably.
It‘s a can of worms and I wonder if other legal minds on here would agree that any evidently self interestedly imposed fine or ban would be overturnable by the courts.
I guess I am still a little concerned that there is no recourse to independent arbitration a la CAS but have enough faith in the system to believe that the high court could become involved on the application of either party, as has already been the case with the recent hearing about release of documents and publicity etc.
FWIW I believe the judge’s remarks about delay apply to the P.L. but even if I am wrong on that it is pretty clear they are on a fishing expedition. If there was any substance to the enquiry they (P.L) would have shown their hand by now
Edit. I meant to quote halfcenturyup’s earlier post setting out the regulations E60 specifically
 
Prestwich_Blue said:
I was about to plow through all that for my next KotK piece but it does seem that, rather than require a write-down to what they consider to be FMV, the excess money has to be returned or the transaction aborted completely.

UEFA would allow them to keep the money but only report revenue according to FMV. So you've got two different rules between the two bodies covering the same circumstance. Be interesting to see how that holds up in court.

Can you imagine the government requiring a shop to refund you because they've charged you more than Tesco or Amazon for the same product?
Click to expand...

They presumably think they can defend that in court but I don't really see it. Newcastle have the money and the owners who will test this the first time it is applied imo.
 
norman said:
“Where …..the board determines in its reasonable opinion that the relevant transaction is evidently not at fair market value….”
The lawyers will argue for years about this alone, apart from the fact that the “Board” will have to be seen to be acting without any consideration of vested interests, and reasonably.
It‘s a can of worms and I wonder if other legal minds on here would agree that any evidently self interestedly imposed fine or ban would be overturnable by the courts.
I guess I am still a little concerned that there is no recourse to independent arbitration a la CAS but have enough faith in the system to believe that the high court could become involved on the application of either party, as has already been the case with the recent hearing about release of documents and publicity etc.
FWIW I believe the judge’s remarks about delay apply to the P.L. but even if I am wrong on that it is pretty clear they are on a fishing expedition. If there was any substance to the enquiry they (P.L) would have shown their hand by now
Edit. I meant to quote halfcenturyup’s earlier post setting out the regulations E60 specifically
Click to expand...

I really don't see how the PL can insist a contract entered into by two unrelated (by any reasonable definition) parties be amended or cancelled. It just won't fly imo.
 
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