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

[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.

 

[mancboy]

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.

id put my house on it being bloom, hes about as straight as a circle.

 

[CC1]

First, to listen to the parties’ solution to rules found to be unlawful or to give guidance on how to action the findings. Second, to decide the level of damages City can obtain. Third, to decide costs liability.
Fourth, to increase the earnings of Pannick, who is a bit short at the mo.
PS I see that has been posted above while I was typing.

Thanks for clarifying

 

[KS55]

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

Majority shareholders getting more shares still dilutes the shares of any other shareholders.

 

[StillBluessinceHydeRoad]

That was the exec who started the whole ATP ball rolling five days after the Newcastle takeover with his "stop the Gulf states" email.

The name of the exec who wanted shareholder loans out of APT is redacted, but he was part of the FCAG, so that narrows it down to the usual suspects.

"narrows it down"???!!! One of the problems is that all but 3 of the FCAG were picked because they want to stuff City and look after their own interests. The law? Bugger that.

 

[StillBluessinceHydeRoad]

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.

This all began with Wenger wittering on about financial doping (French for investment?), only spending what you earn and all the other claptrap. What he never spoke out against was hypocrisy.

 

[Blue Mist]

The PL did consult with their council and were told in their view the amendments were in fact inline with Uk law. An organisation can have any rule, unless clearly in contravention of the law eg no females allowed, and are valid until tested

@Gordyola I wasn't aware the PL had consulted with their lawyers after City had raised the issue in February. Obviously they consulted them once City commenced proceedings but i am talking about just before the meeting when City made their feelings known. If, as you say they did,
I don't suppose we will ever see what advice they gave.

 

[lonestay]

@Gordyola I wasn't aware the PL had consulted with their lawyers after City had raised the issue in February. Obviously they consulted them once City commenced proceedings but i am talking about just before the meeting when City made their feelings known. If, as you say they did,
I don't suppose we will ever see what advice they gave.

Well we can because obviously it was bad advice !!!

 

[halfcenturyup]

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 ....

There is clearly nothing illegal about soft loans, per se.

But here is a question. Is it actually legal to prevent an owner funding a company with soft loans? For example, directors of a company that owns a club have a Companies Act responsibility to act in the interest of the company's shareholders. There may be good reasons why the directors consider soft loans to be in the interests of the shareholders. Who are the PL to say they can't do that? Is it not abuse of a dominant position to force an owner to restructure its funding (that is what the current APT rules require), potentially unfavourably to the shareholders.

It's the same question as forcing a club to renegotiate downwards (or upwards!) a sponsorship contract which was accepted by both parties as being to the benefit of the shareholders.

Which responsibility takes precedence? The responsibility of the directors of the club, or of the club owners, to their shareholders, or the contractual responsibility set out in the PL rules?

Or maybe I am missing something simple. It wouldn't be the first time ......