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

[Charlesfarsbar]

In respect of one of the rules, the PL was given specific advice and went against it, thus rendering that particular rule to be unlawful.

In any normal sphere this would be the story, but it’s not.

Exactly , the PL implemented unlawful rules, knowingly to suit a vocal minority of clubs

How is this not the headline

 

[Roachy]

Not clued up on all the financial bits of this tbh. Does this means that the clubs that are negatively impacted by this decision will have to start sorting their financial shit out pronto? Will it have to be in order for this accounting period regardless, or will there be some leeway for them to utilise?

 

[hammocity]

The law isn't simply black and white and can be interpreted differently by different experts. Even this panel of 3 expert ex judges didn't agree on all points. The CAS panel wasn't in total agreement. We often see verdicts in one court overturned in another.

Wasn't one of the CAS panel selected by the Premier League? If so it's pretty much nailed on there was not going to be a unanimous decision.

 

[Pingu the Penguin]

Is there an easy summary of our challenges that were not upheld?

It's a bit like a scattergun. Deadly effective even if most bullets miss.

Yeah pg 164 of the judgement I think

 

[blueste41]

Slightly (greatly)confused on shareholder loans. Am I right in thinking that a shareholder loan doesn't affect PSR, in so much as an owner can't just give a loan that would allow a club to pass PSR. As an example if club had an £80m shortfall for PSR, an owner can't just inject £80m as a loan to allow a club to pass PSR. Is it only that clubs should be paying interest on such loans that is the problem. Then It as been said that the loan will be converted into equity. So if the loan becomes equity can that money be used for anything and does it help with PSR.

Correct, shareholder loans cannot be counted as revenue to meet with PSR and neither can equity investment. The ruling now means that the interest that would be due on that loan must be taken into account when deciding if a club meets PSR. So converting the loan to equity would only make the interest go away, if shareholders would be willing to convert loan to equity is (in most cases) unlikely.

 

[Mon Autre]

So, under the current rules 0% shareholder loans are accepted but they are now unlawful.

A few clubs will need to factor in FMA interest rates into their PSR.

We’re told an easy solution to this is to turn those loans into equity - if that shareholder has the appetite to do so (which is a big assumption).

So my question is, are shareholders now allowed to pump equity into a club, regardless of how much and, if so, is there anything stopping our owners from doing the same?

I haven’t a clue and would love some clarity on that if someone on here knows the answer

Equity doesn't impact P&L. So a shareholder cant put as much money in to buy limitless players, because revenue would need to cover expenditure.

Where it could help is that where you have a club that is paying huge interest on a loan that was used to pay upfront for a long term asset. In this case an owner could pay off the loan to mitigate the ongoing interest costs and convert it to equity. But obviously that requires agreement of other shareholders who would see their stake diluted

 

[Keepingthefaithsince1976]

 

[blueste41]

Wasn't one of the CAS panel selected by the Premier League? If so it's pretty much nailed on there was not going to be a unanimous decision.

As has been said many times before distinguished judges that have spent their lives getting to the absolute peak of their profession and are regarded to have an impeccable reputation cannot be "bought". Remember, people against City say that we will simply "buy a verdict" because we have so much money-it's nonsense but it works both ways.

 

[Academica]

Correct, shareholder loans cannot be counted as revenue to meet with PSR and neither can equity investment. The ruling now means that the interest that would be due on that loan must be taken into account when deciding if a club meets PSR. So converting the loan to equity would only make the interest go away, if shareholders would be willing to convert loan to equity is (in most cases) unlikely.

Thanks for reply, that makes things a lot clearer.

 

[OrigamiNinja]

I see the Premier League have "confirmed" that existing shareholder loans won't be included in modified ATP rules - but existing sponsorship deals will be included.
The chances of another court case not happening are thus vanishingly small I woukd imagine.

You can see how this can quite quickly snowball. It goes from City fighting legal battles to half the Prem doing it. Questions start being asked about the point of it all and all of a sudden the days of over-regulation to appease certain clubs are no more.