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

[halfcenturyup]

So if they're unenforceable, can we now sign the Etihad and First Abu Dhabi Bank deals without having to refer them to the PL and get a decisions on whether they're fair market value?

That's the big question, isn't it? And the big problem the PL has.

If the rules are unenforceable (which is I suppose different to null and void as described by the club) until they are made lawful and they can't be applied retroactively, then presumably Etihad is OK. If the new rules are applied retroactively to Etihad, then they should presumably be applied retroactively to the loans as well?

 

[halfcenturyup]

They do they’re just unenforceable as detailed by Chris on the last page. My opinion too.

The club says null and void .... Question of legalese maybe.

 

[Cobwebcat]

That's the big question, isn't it? And the big problem the PL has.

If the rules are unenforceable (which is I suppose different to null and void as described by the club) until they are made lawful and they can't be applied retroactively, then presumably Etihad is OK. If the new rules are applied retroactively to Etihad, then they should presumably be applied retroactively to the loans as well?

Interesting point.

 

[ufo]

It’s just another way of saying don’t go bust but the thing is Footy clubs nearly always come back even if they do go bust because it’s fan base is loyal and stick with them. So I’m not sure, ultimately what the “problem” is.

They let rags go deep in debt while trying to knock city’s transfer targets and one day suddenly they thought how can you come back from point of no return?
These shit rules are tailor fit custom made for red cunts .Reverse the role and put city in rags spot , we would’ve been in second or third division by now.

 

[halfcenturyup]

Personally I believe that the limitation of owner investment is a clear breach of competition law but this was not the issue in question in our recent case. The club had taken a pinch in 2013 because owner investment was not envisaged because of our rapidly growing revenue. Sponsorship was very much a live issue and two of our deals had fallen foul of the new regs, which we considered unlawful. At the same time other streams of revenue were not brought within these regs even though the source of the revenue couldn't be any more "related" or "associated" or whatever and this made the terms of competition unfair and unlawful.

So, what I'm pointing out is that such soft loans are in no way illegal, anymore so than a sponsorship deal. But if sponsorships are to be in line with market value it is not lawful if some other forms of revenue are not.

If your point is that limiting owner investment is unlawful I would agree wholeheartedly with you, but I think Khaldoon would say quite simply that that is someone else's fight .... Newcastle perhaps?

Thanks for taking the time. I get your points.

But I suppose I was asking what legal basis the PL has for requiring clubs to impose conditions on contracts with third parties (sponsorship contracts or loan agreements, for example) when the directors of the club have a statutory requirement to take decisions for the benefit of their shareholders which will most likely be in contradiction with that.

Don't forget the PL doesn't want to disallow some income or impute some costs in some calculations, they want the actual agreements to be changed.

I never, for the life of me, understood how the PL could be allowed to do that. It is just something that has always bothered me so don't feel obliged to humour me :)

 

[Prestwich_Blue]

That’s right but his point was it should be and nothing else.

Just to be clear, the PL use profit as a prima facie measure of sustainability. As I've pointed out on here, it's nothing of the sort.

You could usefully argue that a club that sustained continuous, significant net losses probably wasn't sustainable. But you couldn't reasonably argue that a club that made profits, or only suffered small losses, was sustainable. One of the reasons for that latter position is clubs like Pompey or even us in 2008 just before the takeover. The financial issues which caused Pompey to go into administration, or us to be on the brink of that, wouldn't have been apparent from the P&L account.

The Bank of England subjects banks and other financial institutions to 'stress tests', which test the ability their capital bases to withstand severe economic shocks on both the demand and supply side. The PL should be doing the same to clubs with large debts. They should also look at forward liabilities rather than a 3-year old P&L account. In other words, like La Liga do, they should be trying to make future spending commensurate with anticipated cash resources.

 

[Prestwich_Blue]

I'm not sure I entirely blame journos when supposedly expert lawyers haven't got on top of it.

I would. Many of them are mendacious cunts.

 

[johnnytapia]

In Everton, Brighton, Arsenal and Liverpool's cases, the providers of funding ARE the shareholders.

I have a loan I took out to buy some expensive camera equipment. I'm paying the capital and a commercial rate of interest (although it's a very decent one) on that loan. The provider had to be sure I could finance that, so I had to give details of income and expenditure, which it accepted.

The thing about interest-free loans is that clubs are paying back neither the interest nor the capital. That allows them to spend that money on transfers and wages. If clubs were required to pay back shareholder loans over a maximum set period, or were required to disallow what they would have paid on repayment of capital and interest from their accounts, then that would be fairer.

 

[Champions again in 2012]

That's the big question, isn't it? And the big problem the PL has.

If the rules are unenforceable (which is I suppose different to null and void as described by the club) until they are made lawful and they can't be applied retroactively, then presumably Etihad is OK. If the new rules are applied retroactively to Etihad, then they should presumably be applied retroactively to the loans as well?

This has crossed my mind over the last few days. I do not believe that they can retrospectively review city’s deals without, at the same time retrospectively applying the PSR / APT shareholder loan element.

However as I read on here the other day if City go back to Etihad and 1st Abu Dhabi bank and, if they refuse to budge on increasing the sponsorship, this will mean that City then have to claim the shortfall from the EPL as damages. If I have understood this correctly we live in very interesting times!!

 

[gordondaviesmoustache]

thanks for that.

A few posters seemed to be unsure what “set aside” actually means so it’s just a word to explain that.

I don’t think you can say there are no APT rules. The rules exist because they were voted on by the requisite majority of PL clubs. The rules are unenforceable because they are unlawful, but that is not to say they don’t exist. A fine distinction perhaps but quite an important one.

As you say “declaratory relief” just means a declaration the the APT rules are unlawful. That declaration is binding on the PL and any other club can rely on it. The two APT decisions affect only City and the PL but the declaration affects all 20 PL members.

I don’t like the murder analogy. 15 counts of murder is 15 different offences. So on some you do win. A better analogy would be a charge that the victim was poisoned, then stabbed, then electrocuted then suffocated and the prosecution only land the stabbing. It’s enough in itself even if some of the other allegations don’t succeed.

Finally I’m going to do a longer post about why the rules were drafted as they were. There’s quite a lot to unpack there…

I like you.