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

[crazyadi]

Re: City & FFP (continued)

Oh Sam, you do make me smile.

It hasn't taken long for Sunday's gloss to wear off, has it? :-)

Haha

I do think we will agree to the sanctions as we know after this season our books are on there way to becoming balanced so FFP will become a distant memory and it will be only be a one of thing this whole FFP for us I reckon.

It was interesting listenting to Julien Lauren, the French journalist and PSG fan the other day on BTSport's European Football Show when he said PSG were actually surprised by the sanctions they got given as they thougt they would have been more, that is why they have accepted the fine and squad restrictions.

But if the sanctions are based on a lowering of our Etihad deal value (I've always assumed not because f the non-RPT issue) or the sale of IP rights (what I assumed was the more likely issue), and we have budgeted those numbers in the revenue base for the next few years, won't that potentially cause an additional wire trip issue with FFP, assuming no change to what gets counted as acceptable add-back losses? Or is it other revenue we're expecting (or fewer expenses) that get us to the FFP pass point?

But based on the what we are hearing, that PSG have had their sponsorship halved, then based on the fact Ligue1 is watched in maybe a dozen countries and the league has 7th highest attendace in europe and their sponsor doesnt even have the name on the ground in comparison to City whos sponsors have paid for 3 items, prem has highest attendance in europe and is watched in over 200 countries then we can renegotiate our sponsorship to say £200 million and let them half that. After all we have far far far more worlwide exposure than Platinis Sons Group so our sponsorship should be higher than theirs.

 

[Anonymous]

Re: City & FFP (continued)

I'v just had a chat on Twitter with Gab Marcotti about FFP.

It strikes me that he, and more than likely others in the press not yet realised the significance of a few things.

1. The importance of the repeated statements going back several years that MCFC was a private purchase by HHSM

2. The legal significance of audited accounts in the UK and the lack of amy RPT's in City's

3. The role of auditors even if paid by MCFC in the signing off of accounts.

4. The importance of UEFA using the standard definition of an RPT

5. The fact that fair value tests cannot be applied unless an RPT is announced.

Gab' for example seems to think that UEFA have decided that City have RPT's and therefore City have to accept this 'because its in the rules'.

Marcotti - "afraid it is up to them. It's in the rules. Nobody forcing any1 to agree to them"

So lets ignore all that legal stuff then?

When I pointed out that City had not listed any RPT's in any of the accounts that UEFA have seen he said-

.... "You sure City didn't list them as RPT ? Wd be strange....".

and "how related party transactions are dealt with is by its nature subjective."

It shows that the people employed by the media to comment on things are far from clued up.

A small detail, but i mention it so you don't inadvertently overstate your case... But you do know we *do* have declared RPT's in our accounts, right?

The Etihad stadium renaming/sponsorship is RPT but I don NOT see how UEFA can say it is NOT fair value - I think City will be strongly arguing this point.

We are two time PL winners in three years, we play in what I assume is the most lucrative, most watched league in the world, we have some the best players in the world including the African player of the year and commercially I can NOT see how £35m per season is NOT fair value, plus from what I have read about PSG sanctions (if they are accurate) it sounds like they are getting off very lightly (its stinks and is as bent as fuck when you consider the Platini links to the club) they are being treated differently to us with their piss-take of a backdated, astronomical sponsorship deal shows they really never made any genuine effort to comply with FFP.

It's an interesting opening gambit when you consider that under GAAP etc, City never declared it as such and that independent auditors agreed and signed off the accounts for City to say they agreed the submitted accounts were true and proper, ergo no RPT.

Still always happy to take the word of a non partisan, anonymous poster on a forum.

Good work fella. What a house of cards.

Evidence?

Thought not.

 

[Prestwich_Blue]

Re: City & FFP (continued)

The Etihad stadium renaming/sponsorship is RPT...

Wrong. 100% wrong. If it was it would have been noted in the accounts and it wasn't and has never been.

 

[Kinkys Left Foot]

Re: City & FFP (continued)

I'v just had a chat on Twitter with Gab Marcotti about FFP.

It strikes me that he, and more than likely others in the press not yet realised the significance of a few things.

1. The importance of the repeated statements going back several years that MCFC was a private purchase by HHSM

2. The legal significance of audited accounts in the UK and the lack of amy RPT's in City's

3. The role of auditors even if paid by MCFC in the signing off of accounts.

4. The importance of UEFA using the standard definition of an RPT

5. The fact that fair value tests cannot be applied unless an RPT is announced.

Gab' for example seems to think that UEFA have decided that City have RPT's and therefore City have to accept this 'because its in the rules'.

Marcotti - "afraid it is up to them. It's in the rules. Nobody forcing any1 to agree to them"

So lets ignore all that legal stuff then?

When I pointed out that City had not listed any RPT's in any of the accounts that UEFA have seen he said-

.... "You sure City didn't list them as RPT ? Wd be strange....".

and "how related party transactions are dealt with is by its nature subjective."

It shows that the people employed by the media to comment on things are far from clued up.

A small detail, but i mention it so you don't inadvertently overstate your case... But you do know we *do* have declared RPT's in our accounts, right?

The Etihad stadium renaming/sponsorship is RPT but I don NOT see how UEFA can say it is NOT fair value - I think City will be strongly arguing this point.

We are two time PL winners in three years, we play in what I assume is the most lucrative, most watched league in the world, we have some the best players in the world including the African player of the year and commercially I can NOT see how £35m per season is NOT fair value, plus from what I have read about PSG sanctions (if they are accurate) it sounds like they are getting off very lightly (its stinks and is as bent as fuck when you consider the Platini links to the club) they are being treated differently to us with their piss-take of a backdated, astronomical sponsorship deal shows they really never made any genuine effort to comply with FFP.

Sorry fella you are completely WRONG as far as i can gather!

None of the elements of the Etihad deal are a Related Party Transaction - NONE!
Etihad are a completely separate Company over which our owner has no SIGNIFICANT control (IAS definition I believe)

The declared RPT deal is in reference to IP rights sold to a third party we are yet to divulge as far as I can determine.

 

[MSP]

Re: City & FFP (continued)

To be honest, selling those rights to ladies team and Melbourne/New York is bit dodgy.. SM should just use some of his connections and make some bogey sponsor deal with some company.

 

[EalingBlue2]

Re: City & FFP (continued)

To be honest, selling those rights to ladies team and Melbourne/New York is bit dodgy.. SM should just use some of his connections and make some bogey sponsor deal with some company.

I know this won't be familiar to most people but in many ways the above is the least dodgy most commonplace transaction in the whole accounts.

There is not a multinational company out there that doesn't have franchise fees, royalty charges, management and admin fees, regional charges etc. As long as they can be justified that the charge is proportionate to the benefit and there are solid keys, OECD transfer pricing principles kept to - then these should not be dodgy at all.

These may appear strange as the idea of a multinational football business is new but they are commonplace in nearly any business you can name!

 

[Prestwich_Blue]

Re: City & FFP (continued)

The declared RPT deal is in reference to IP rights sold to a third party we are yet to divulge as far as I can determine.

Let's set this right once and for all. There were three sales of IP in the last accounts. Two were declared as RPT and involved the various 'franchises' effectively buying the rights to use our technical resources, particularly the scouting database, and marketing rights. These were an up-front payment for which the alternative would be an annual licence fee. Because of the tax implications of these sorts of agreements, they have to be pretty watertight.

The third transaction was the sale of image rights to an unnamed third party. This is, I'd imagine, the one that has caused the problem. However there is nothing in FFP to stop us doing this that I can see, as long as money has changed hands.

 

[MSP]

Re: City & FFP (continued)

To be honest, selling those rights to ladies team and Melbourne/New York is bit dodgy.. SM should just use some of his connections and make some bogey sponsor deal with some company.

I know this won't be familiar to most people but in many ways the above is the least dodgy most commonplace transaction in the whole accounts.

There is not a multinational company out there that doesn't have franchise fees, royalty charges, management and admin fees, regional charges etc. As long as they can be justified that the charge is proportionate to the benefit and there are solid keys, OECD transfer pricing principles kept to - then these should not be dodgy at all.

These may appear strange as the idea of a multinational football business is new but they are commonplace in nearly any business you can name!

May be, I'm just thinking in the line it's MCFC who owns all those franchises so it looks bit strange it's selling rights to it's own entities.

 

[Prestwich_Blue]

Re: City & FFP (continued)

To be honest, selling those rights to ladies team and Melbourne/New York is bit dodgy.. SM should just use some of his connections and make some bogey sponsor deal with some company.

I know this won't be familiar to most people but in many ways the above is the least dodgy most commonplace transaction in the whole accounts.

There is not a multinational company out there that doesn't have franchise fees, royalty charges, management and admin fees, regional charges etc. As long as they can be justified that the charge is proportionate to the benefit and there are solid keys, OECD transfer pricing principles kept to - then these should not be dodgy at all.

These may appear strange as the idea of a multinational football business is new but they are commonplace in nearly any business you can name!

May be, I'm just thinking in the line it's MCFC who owns all those franchises so it looks bit strange it's selling rights to it's own entities.

Let's say a US company develops some software and wants its UK and French subsidiaries to sell it in their domestic markets. They've spent £50m developing this and expect to sell 60% of the licences in the US, 30% in the UK and 10% in France.

There's a number of ways they can account for these:
1) Take all the revenue through their US company;
2) Take a percentage of any foreign sales;
3) Re-charge £15m to the UK company and £5m to the French company and allow them to book all the revenue.

(3) is what we've done and if you look for a post by Petrusha, who is a commercial lawyer, he explains why these sorts of transactions are common.

 

[EalingBlue2]

Re: City & FFP (continued)

To be honest, selling those rights to ladies team and Melbourne/New York is bit dodgy.. SM should just use some of his connections and make some bogey sponsor deal with some company.

I know this won't be familiar to most people but in many ways the above is the least dodgy most commonplace transaction in the whole accounts.

There is not a multinational company out there that doesn't have franchise fees, royalty charges, management and admin fees, regional charges etc. As long as they can be justified that the charge is proportionate to the benefit and there are solid keys, OECD transfer pricing principles kept to - then these should not be dodgy at all.

These may appear strange as the idea of a multinational football business is new but they are commonplace in nearly any business you can name!

May be, I'm just thinking in the line it's MCFC who owns all those franchises so it looks bit strange it's selling rights to it's own entities.

Every business does it intellectual property, trademarks, patents, software, etc all owned centrally and then all their businesses in all other countries pay to use it.

Every multinational business does this and it is under more scrutiny than any other element in business. It is essentially this that drives all the conversations on issues like Starbucks and apples profits