FFP & Sponsorship deals

[supercrystal7]

I don't care about it and think FFP is a joke. There should be rules to ensure that if an owner does invest, then the money is not loaned, but actually put into the club. Situations where clubs owe the owner hundreds of millions should not be allowed. Instead of restricting FFP they should limit the number of players clubs can register, which they do and stops certain clubs hording the best players.

The only thing noteworthy about City's sponsorship is the question of whether the Barcelona boys and the board are doing a great job or not. On the surface when I saw City were 6th income table I was very impressed with what they had been doing. Though if it's just ways for your owners to pour money into your club then I will be less impressed with the job they have done.

So you start by claiming owners should be allowed to invest as long as its not loans, something our owner has done yet finish by claiming you would be less than impressed if our owner was simply pouring money in?

He said he was impressed by the way we had risen up the money league but it would be less impressive if the revenue had simply been funneled from Abu Dhabi. Which makes perfect sense.

Yep that was exactly what I was saying.

 

[Matty]

They are not related party transactions - that is what I tried to explain very often here. Adidas and Audi are absolutely independent companies on the stock market - not private persons. And whereas their shares in Bayern for sure are an investment they are just minority shares without rights.

If they would pay 10 million EUR more for their sponsoring contracts that would result in maybe a higher dividend of 100.000 EUR... - with the other companies taking advantage of it, too... - it just does not make any sense...

It is different when it is about Volkswagen and Wolfsburg - but that the UEFA already investigates. There Volkswagen owns 100 % but is the sponsor, too.

A "related party" doesn't have to have any voting rights, or even any degree of shareholding, in the company. A related party can be an executive, an associate, or even a close family member of someone on the companies board. Any deal between Bayern Munich FC and Audi, or Adidas, is absolutely a related party one. Audi and Adidas hold shares in Bayern Munich, a decent number of shares at that. They are in a position to influence decisions. Yes, they don't personally get the right to vote, but they have a "way in" so they can speak to and influence the decisions of those who do vote. They are related parties. This doesn't mean their sponsorship is at an unacceptable level, but it does mean their sponsorship needs to be assessed by accountants, both those working for the German government, and those working for UEFA, to see if the level of sponsorship is at "market value".

As for your argument about them spending more money on sponsorship not equating to more money coming into Adidas or Audi. You are correct, not directly from Bayern Munich via dividends it wouldn't, well not enough to make it financially viable. However by spending more on Bayern Munich they help them achieve greater success, which brings the "brands" of Adidas and Audi to the fore, increases interest in the brands, and drives such things as sales higher up, which very much has the potential to increase their revenue enough to make it financially viable to spend more on Bayern Munich FC.

So - where do we start then. If the uncle of the grandmother of the grandfather of the sponsor has a relation to the club...

Every sponsor has the interest that the club he sponsors has success - because that indirectly is good for his own business whenever he is mentioned with the club. That is why he is sponsor there. But he does not pay over the odds to be sponsor... - what you described there is the interest of any sponsor...
To pay more because you are a 7% shareholder when the other 93% profit from it, too, is simply bullocks. The shareholders aren't related with each other so I do not know if Qatar that holds 15% Audi shares has shares of other big companies in Germany, too. But then - where do we want to start...

We need to start when a majority of a club is owned by somebody - when the club is dependend from a sponsor or when the sponsors are related with each other or the club...

And every sponsor has a certain influence in the club because of the contract they have or the thread that the sponsor will let run out the contract. At smaller clubs a lot more than at a big club with a multitude of big sponsors and sponsorings.

Not at a club that apart from being owned 75% by club members is owned by less than 25% by three different and independent stock oriented companies (with multiple owners in which the shareholders have different interests, too) - that has various big sponsoring contracts with a lot of companies.

We start with CLOSE family members, like I stated. Parents, children, siblings, potentially aunts and uncles, maybe grandparents. There's probably something documented in the Accountancy regulations that makes identifying who is and isn't "close" enough to a board member in terms of family relations to be a related party, but I don't know what that is off the top of me head. The "uncle of the grandmother of the grandfather of the sponsor" would not be a close relation, so would be fine.

As for the rest of your statement, it's not really relevant whather you feel calling Adidas or Audi a "related party" is bollocks or not, or whether you agree with the definitiopns, or can see any difference between the interests of a sponsor, or the interests of a sponsro with a sizeable shareholding in the company they sponsor, what matters is the regulations that Bayern Munich, like all companies in countries within the EU, have to follow. These will determine whether Audi or Adidas are related parties or not. I would be astounded if they were not declared as such by Bayern's own accountants in their financial statements. It's really not difficult to understand. Ignoring everything else, they sponsor Bayern Munich, and they hold shares in Bayern Munich. They have 2 different interests in Bayern Munich, one as a vehicle to attract attention to their company, and therefore increase it's revenue, and one as a company they hold shares in, and aim to make money via dividends and onfield success. The sponsorship can have a positive impact on the clubs ability to make money, so Audi sponsoring Bayern Munich can lead to increased profitability for Bayern Munich, and therefore increased value to Audi's stake in the company. One clearly can affect the other, and as such it's related. It's not much more complex than that, regardless of the arguments you make.