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

[BlueAnorak]

Can't stand K B but she did cracking deal for West Ham more fools the person or people who signed it of! Maybe she gave them something an envelope or an account in the Cayman islands! One thing that deal was unbelievable! Just think in another ten years it could cost the tax payer around 400/500m just think if someone from Saudi or Abu Dhabi owned West Ham and got that deal you'd never here the end of it

Someone should ask her about this.

Overview of Financial Losses​

The London Stadium, home to West Ham United, continues to represent a significant financial challenge for the capital’s taxpayers, as revealed in the latest accounts from the London Legacy Development Corporation (LLDC). Despite efforts to mitigate losses by hosting concerts and other events, the stadium’s owner, E20 Stadium LLP, reported a staggering loss of £20.9 million in the financial year ending May 31, 2024. According to The Times.

Costs Versus Income: An Imbalance​

The financial report highlights the disparity between the costs of maintaining the stadium and the income generated. Notably, West Ham United pays a relatively modest rent of £3.6 million per season, which covers none of the stadium’s upkeep costs such as heating, cleaning, or maintenance. This situation is compounded by the fact that West Ham retains all ticket revenues and a portion of the catering income, further skewing the financial equation in favour of the club.

Report: West Ham’s £20.9m London Stadium Loss Hits Taxpayers Hard

Financial Strain at the London Stadium: A Closer LookOverview of Financial LossesThe London Stadium, home to West Ham United, continues to represent a significant financial challenge for the capital��...

sports.yahoo.com

On top of.

London Mayor Sadiq Khan has ordered an investigation into the cost of converting the Olympic Stadium into West Ham's new home. The move comes as it was revealed the conversion costs have jumped by another £51m to £323m from £272m. Balfour Beatty was in charge of converting the stadium under a £190m contract.

Interestingly, I worked out the other week that we repaid the loan to get the stadium ready for football (£22m) around about 2014

Approximate CIty Payments so far:
2003-2010 (7 years) @£2m = £14m
2011-2024 (14 years) @£3m =£21m
Total = £36m

Overall stadium costs.
Construction costs £112m
Build for football £22m
Fit out for football £20m (paid by City)

Indeed we will have paid for the Commweath games stadium in 30 years time.

 

[LesBleuMiserable]

Hang on, is this the same dude who claimed City lost the tribunal by TKO? \0/

Talk about going with which way the wind is blowing! As stated, I refuse to click on any link where this self styled 'City Insider' is regaling his bullshit pearls of wisdom.

What a difference a few days make hey?

Borsan said we had a marginal win, at least Jordan accepted we had a very good day in Court!

 

[stirlingblue]

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 ......

Actually is does matter whether interest is charged and applied to the profit and loss account which affects the bottom line. It also matters that any loans need to be disclosed in the balance sheet as a creditor thus affecting the financial strength of a business/organisation. However I do agree with your main point on financial doping

If I Die .. I think you may have misunderstood my post. Of course loans will be recorded in the balance sheet as both an asset in the bank account and as a loan creditor. This is standard accounting practise for any loan
However it is believed that a number of clubs including Arsenal, Liverpool, Brighton et al have received soft loans from related parties/shareholders. These loans and agreements backing the loans have been made at 0% or as near to as makes little or no difference. If the loan agreement is for 0% interest then there is no requirement for the club/entity to declare an interest charge in its P&L account or a liability in the balance sheet as there is no liability to pay any interest. This should be straight forward as far as statutory accounts are concerned.
What the tribunal have ruled is that these zero interest loans from 'related parties' should be treated as arms length or FMV loans in the same way that sponsorship deals from 'related parties' are required to be at fair market value, but only for PSR calculation purposes. The PL has no authority to tell clubs what interest they should actually in fact pay their lender, that would be absurd. Such loans on the open market would typically, currently, accrue interest at a rate of around 8% to 10% per annum.

The 'soft loans' help reduce costs for the recipient by keeping interest charges out of the P&L account, and the statutory accounts but NOT now for PSR calculations.
By the same token the current PL FMV assessments for alleged related party income sponsorships allegedly aim to ensure that income received by the beneficiary is not artificially inflated above the market value of comparable deals - who decides this and how is another matter altogether - available on the open market.
In summary, the tribunal have essentially ruled that 'artificially' reduced loan costs from related parties must now come under the same umbrella as 'artificially' inflated related party sponsorships and disallowed for PSR purposes or as some might see it they are two cheeks of the same arse.

 

[BlueAnorak]

If I Die .. I think you may have misunderstood my post. Of course loans will be recorded in the balance sheet as both an asset in the bank account and as a loan creditor. This is standard accounting practise for any loan
However it is believed that a number of clubs including Arsenal, Liverpool, Brighton et al have received soft loans from related parties/shareholders. These loans and agreements backing the loans have been made at 0% or as near to as makes little or no difference. If the loan agreement is for 0% interest then there is no requirement for the club/entity to declare an interest charge in its P&L account or a liability in the balance sheet as there is no liability to pay any interest. This should be straight forward as far as statutory accounts are concerned.
What the tribunal have ruled is that these zero interest loans from 'related parties' should be treated as arms length or FMV loans in the same way that sponsorship deals from 'related parties' are required to be at fair market value, but only for PSR calculation purposes. The PL has no authority to tell clubs what interest they should actually in fact pay their lender, that would be absurd. Such loans on the open market would typically, currently, accrue interest at a rate of around 8% to 10% per annum.

The 'soft loans' help reduce costs for the recipient by keeping interest charges out of the P&L account, and the statutory accounts but NOT now for PSR calculations.
By the same token the current PL FMV assessments for alleged related party income sponsorships allegedly aim to ensure that income received by the beneficiary is not artificially inflated above the market value of comparable deals - who decides this and how is another matter altogether - available on the open market.
In summary, the tribunal have essentially ruled that 'artificially' reduced loan costs from related parties must now come under the same umbrella as 'artificially' inflated related party sponsorships and disallowed for PSR purposes or as some might see it they are two cheeks of the same arse.

The big problem for the Premier league was City were given tge best oart of fuck all information on tge process and the result of the process - basically "The red cartel says no."
Which was UNLAWFUL, UNFAIR and UNREASONABLE.

 

[halfcenturyup]

If I Die .. I think you may have misunderstood my post. Of course loans will be recorded in the balance sheet as both an asset in the bank account and as a loan creditor. This is standard accounting practise for any loan
However it is believed that a number of clubs including Arsenal, Liverpool, Brighton et al have received soft loans from related parties/shareholders. These loans and agreements backing the loans have been made at 0% or as near to as makes little or no difference. If the loan agreement is for 0% interest then there is no requirement for the club/entity to declare an interest charge in its P&L account or a liability in the balance sheet as there is no liability to pay any interest. This should be straight forward as far as statutory accounts are concerned.
What the tribunal have ruled is that these zero interest loans from 'related parties' should be treated as arms length or FMV loans in the same way that sponsorship deals from 'related parties' are required to be at fair market value, but only for PSR calculation purposes. The PL has no authority to tell clubs what interest they should actually in fact pay their lender, that would be absurd. Such loans on the open market would typically, currently, accrue interest at a rate of around 8% to 10% per annum.

The 'soft loans' help reduce costs for the recipient by keeping interest charges out of the P&L account, and the statutory accounts but NOT now for PSR calculations.
By the same token the current PL FMV assessments for alleged related party income sponsorships allegedly aim to ensure that income received by the beneficiary is not artificially inflated above the market value of comparable deals - who decides this and how is another matter altogether - available on the open market.
In summary, the tribunal have essentially ruled that 'artificially' reduced loan costs from related parties must now come under the same umbrella as 'artificially' inflated related party sponsorships and disallowed for PSR purposes or as some might see it they are two cheeks of the same arse.

I think you have also misunderstood the current APT rules. Contracts have to be re-written to fmv, it's not just a question of adjusting the PL impact for PSR:





Which, again, is my question. What legal right does the PL have to impose that on a company not subject to the PL rules or, for that matter, even a company that is subject to the PL rules.

 

[Chris in London]

Thanks. Let me test you on whether the APT rules don't exist. City told the other clubs that the rules were null and void.

No-one seemed to have explained why that was so (in public) but it seems clear from s.2 of the Competition Act.

Agreements etc. preventing, restricting or distorting competition.

(1) Subject to section 3, agreements between undertakings, decisions by associations of undertakings or concerted practices which—
(a) may affect trade within the United Kingdom, and
(b) have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom,
are prohibited unless they are exempt in accordance with the provisions of this Part.

(2) Subsection (1) applies, in particular, to agreements, decisions or practices which—
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

(3) Subsection (1) applies only if the agreement, decision or practice is, or is intended to be, implemented in the United Kingdom.

(4) Any agreement or decision which is prohibited by subsection (1) is void.


Start at the end. What is void? The decision of the PL to introduce APT rules - because the rules were judged unlawful under s.2(1) - some of s.2(2) may apply - and are therefore prohibited under s.2(1) and the decision is therefore void under s.2(4).


Happy to learn if that interpretation is wrong. (Well, not happy.)

I think you are drawing a distinction without a difference.

If something is void it is as if it never happened, but that is not to say it did not actually happen.

Suppose two thieves agree to split the proceeds of their crimes 50/50. One steals more than the other and wants to keep it. The other cannot sue to enforce the agreement because an unlawful agreement is void. But the agreement exists however: both entered into it. So it cannot be said that the agreement does not exist, it clearly does. But it is unenforceable.

As I said, a fine distinction perhaps.

 

[Chris in London]

I think you have also misunderstood the current APT rules. Contracts have to be re-written to fmv, it's not just a question of adjusting the PL impact for PSR:

View attachment 134891
View attachment 134892


Which, again, is my question. What legal right does the PL have to impose that on a company not subject to the PL rules or, for that matter, even a company that is subject to the PL rules.

The right is that if a club wants to play in the PL it must abide by the PL rules.

What right do I have to tell you to take your shoes off? None whatsoever

unless you want to come in my house.

 

[stirlingblue]

I think you have also misunderstood the current APT rules. Contracts have to be re-written to fmv, it's not just a question of adjusting the PL impact for PSR:

View attachment 134891
View attachment 134892


Which, again, is my question. What legal right does the PL have to impose that on a company not subject to the PL rules or, for that matter, even a company that is subject to the PL rules.

The short answer to your original question is it is definitely NOT illegal to provide a soft loan. The question of whether it should be adjusted - for PSR calculations only to comply with PL rules - has I believe been answered by the decree of the tribunal as it relates to each clubs 'membership' of the PL. The stuff about re-writing contracts is outside my pay grade and I'm definitely not qualified to comment with any authority whatsoever.

 

[Keeper!]

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

Their advice was ignored.

 

[Keeper!]

Fanny C was a malign ****.