City launch legal action against the Premier League | City win APT case (pg901)

[terraloon]

The quid pro quo for equity funding is the transfer of ownership. It is just selling all or part of the club, so it is fine.

Sorry when the owner converts his loan to equity it’s hardly the same as selling say 25% of the existing equity

 

[StillBluessinceHydeRoad]

How did these rules get signed of by the pl legal team ?

I don't believe there is anything in law which prevents anyone providing anyone else with an interest free loan. But what the regulations did was to accept that sponsorship deals with related or "associated" parties were revenue which had to be proven to be at FMV whereas loans from shareholders were not APTs and no FMV tests needed to be carried out on the interest rate on these loans. This made the APT regulations breach competition law. Furthermore this special treatment of shareholder loans was at the request of a PL chairman/executive who had made a sizeable loan to his club, .and was thus a knowing and wilful breach of the rules and it made the APT regulations unlawful.

Martin Samuel believes that the PL seems to think there is an "air of criminality" around clubs which try to attract money and this seems to explain their attitude quite nicely. It is scared that some clubs might buy the title year after year and these are clubs with no experience of buying the title year after year, and so every penny these new clubs make is undeserved and must be carefully regulated. Some other clubs can be trusted to regulate themselves.

And now it's all come crashing down, leaving one hell of a shambles but of course we all trust the PL to clear it up. After all they know now what's lawful and what isn't. Or they should. Or ....

 

[KS55]

Sorry when the owner converts his loan to equity it’s hardly the same as selling say 25% of the existing equity

It may be new shares issued but that is still part sale of the company, ie it dilutes the ownership of existing shareholders.

 

[BringBackSwales]

It’s about time there were 3 PL rule books:-

1. The rules that apply to red clubs
2. The rules that apply to City
3. The rules that apply to the other clubs

It really is that blatant in practice so make it that blatant in the rules

 

[Man_City_Loyal]

Rumoured Brighton, allegedly

thanks..

 

[Man_City_Loyal]

It has to be one of the clubs where shareholder loans are a major factor, so Everton, Brighton or possibly Arsenal. My guess would be Bloom at Brighton, although given Everton's parlous financial state you could also look at them.

Thanks PB

 

[KS55]

It’s about time there were 3 PL rule books:-

1. The rules that apply to red clubs
2. The rules that apply to City
3. The rules that apply to the other clubs

It really is that blatant in practice so make it that blatant in the rules

4. The rules that apply to Newcastle, to take care of the fiction that they are not state owned.
I have no objection to state ownership, but I think it is against PL rules.

 

[terraloon]

It may be new shares issued but that is still part sale of the company, ie it dilutes the ownership of existing shareholders.

Many, but not all of the PL clubs are majority owners who can easily pass any special resolution to increase equity . If it’s those same owners or majority owners turn their loans into newly created equity then it does the exact reverse of dilution of their owners ship it actually strengthens their position . If however loans from non majority shareholders are converted then yes it does dilute

 

[stirlingblue]

I don't know if you agree, but to me director loans are a prime example of 'financial doping' ( that term is ridiculous in itself). Exactly what we have been accused of continually.

This is precisely the point. Many both inside and outside the media, either by choice or through ignorance, do not grasp the reality. I'm fairly sure it does not matter whether the interest is actually charged and paid however and shown in the annual accounts. What is important is that to level the playing field in terms of PSR then a notional commercial interest rate must be applied for PSR calculations at FMV as if the borrowing by the club from owner investors, directors et al (aka related parties) had been obtained at arms length on the open market. In effect this would mean that say Arsenal's loans of around £250 million would have a charge of say 8-10% per year applied for PSR calculations. That's in excess of £20 million a year added to their costs for PSR purposes. This to me is as close and clear to a definition of 'financial doping' as we can get
This has been made crystal clear by the tribunal in their rulings.
Liverpool and Brighton face a similar challenge.

 

[cheekybids]

The average PL fan has been brainwashed into thinking an owner that wants to invest money in his club is "bad", and billionaire owners with no sporting ambition whatsoever only using a club as a way to make themselves even richer (usually at the clubs expense) is "good". It's just jealousy combined with some xenophobia.

I could somewhat understand rival fans arguments if we every year had spent 5 times as much as everyone else on signings and they aren't even close to be able to compete (financially). But right now their argument is "you are almost spending as much as us on transfers, thats unfair. Fair would be you only being allowed to spend a third of what we are spending because history", which makes their entire point just completely idiotic.

5 times, that’s only good enough to get you to 14th.