Financial Fair Play/Financial Report (merged)

[Prestwich_Blue]

Re: Financial Fair Play will not affect us.

Wow, another FFPR thread and I didnt start it ;-)

Some of you may remember that I have been talking (positively) about FFPR for quite sometime and I must say that this forum has been one of the better places to find reasoned and balanced debate on the subject almost from day one.

In response to an early post about contacting UEFA about FFPR I actually did way back in the mists of time I called them and asked some simple but important questions.

I was provided with answers which made it clear that ANY income deemed legal within a club's host country would be allowed under the terms of FFPR.

That is a very important and specific statement as you can extrapolate from that the fact that the Etihad deal for example is perfectly acceptable to UEFA because it is signed off by City's auditors.

After my conversation with UEFA however they brought in the next stage of the loop hole closing which talked about 'fair market value' - this is to be judged by a group of UEFA experts and if they feel that a deal is above fair market value they will discount the mount above 'their' figure for FFPR purposes.

Once this fair market value test was introduced then FFPR as a threat to City and PSG etc died.

They cannot offer an opinion on fair market value that would stand up in court as the people who pay for the deals will simply stand up and say that they thought it was fair and reasonable to pay price X for sponsorship Y.

UEFA have in short tried to fix a market for sponsorships in their own image which the EU will find rather intriguing for a start.

Further to that UEFA in ignoring debt as an issue (when the whole world has debt repayment as its focus) can legitimately be accused of creating a cartel and being anti-competitive in a number of ways. The biggest one of course is that in stopping a business owner from investing his/her money in his/her own business in order to reach a level where income can be significantly increased via UEFA's own payment schedules/structures ( which are based on achievement ) could be argued is designed solely to stop any new companies from achieving the required levels of achievement.

The first question that would be asked by any crap lawyer would be which clubs benefit from FFPR most and is there any evidence of a relationship between those clubs and the people who drew up the rules that could be seen as anti-competitive?

Hi Andy. Just to make the point again that fair market value only applies to related party transactions as declared by the reporting entity. If we don't believe it's a related party transaction under the current agreed definition(s) then we don't have to apply the market value test. UEFA can audit our FFP submission but their definition of a related party is the same one our auditors will have used. So to force us to apply market value would involve successfully challenging that. Chance of that? Nil.

 

[EricBrooksGhost]

Re: Financial Fair Play will not affect us.

Give us an example please. Qatar Tourism and PSG doesn't count. No disrespect to City, but if the Etihad deal is ''normal'' business, how come clubs like Barca, Madrid,Yanited or Bayern Munich never secured anything like it. Those clubs are in a different league in terms of their brand value and popularity.

If a major company gave me the task of securing shirt deals with Man Utd, Arsenal, Man City,Wigan, Bolton and Stockport, and gave me a budget of 100 million a year I'd probably offer United 45 million, Arsenal 35 million, City 15 million, Wigan 3 million,Bolton 1.5m and Stockport .5m.

That would represent fair value for the sponsor. Obviously I just made these amounts up, but nobody can argue with the basic point that different clubs have different values from a sponsorship p.o.v.

No different to placing an ad. It will cost you more to advertise in the Times than it would in your local parish newsletter.

There is nothing to pull up over the Etihad deal as its not related party so therefore not subject to a fair value test. Why is this so hard to understand.

Is this correct though? I am not sure it is.

The term "Related Party" covers a lot of ground. For example, Etihad are a related party if "a person" at Etihad has significant influence over the reporting party. Is there anyone at Etihad who has the Sheikh's ear? There might well be.

Also Etihad is a related party if they are part of the same group. Given that we are both owned by the Abu Dhabi royal family, this is questionable as well.

Right here goes...
If Etihad were a related party as per FRS8 accounting rules this would have to be declared in our accounts even before the campus deal e.g. Shirt sponsorship; they are not. Now UEFA related party rules mimic accounting rules ... QED . Related party rules are not based on hearsay and supposition and they are not as you define above

 

[Chippy_boy]

Re: Financial Fair Play will not affect us.

There is nothing to pull up over the Etihad deal as its not related party so therefore not subject to a fair value test. Why is this so hard to understand.

Is this correct though? I am not sure it is.

The term "Related Party" covers a lot of ground. For example, Etihad are a related party if "a person" at Etihad has significant influence over the reporting party. Is there anyone at Etihad who has the Sheikh's ear? There might well be.

Also Etihad is a related party if they are part of the same group. Given that we are both owned by the Abu Dhabi royal family, this is questionable as well.

Right here goes...
If Etihad were a related party as per FRS8 accounting rules this would have to be declared in our accounts even before the campus deal e.g. Shirt sponsorship; they are not. Now UEFA related party rules mimic accounting rules ... QED . Related party rules are not based on hearsay and supposition and they are not as you define above

Thanks. (As per previous couple of pages, btw).

 

[grunge]

Re: Financial Fair Play will not affect us.

we should have top loaded the Etihad deal ( Arsenal did it with there stadium deal ) to give us the vast majoriry of it over the next 3 or 4 years while we are setting up and then either renegotiate or take the small amount left over the remaining years.

With the PSG's 150m a year deal for the next 4 years its entirely possible we could do another deal with some part Abu Dhabi ( the tourism board like PSG did ).

What sort of company would sign a 10yr sponsorship deal front load it the first 4 years and then renegotiate after those 4 years???


Hahahahaha

Depends how friendly Mansour is with his cousin ;)

Either way, we should have front loaded it just to get a lot more cash early on, while other revenues were increasing..

 

[BluessinceHydeRoad]

Re: Financial Fair Play will not affect us.

It's fucked us over hasn't it. Otherwise we would have seen some proper signings in summer on the back of our title win (richest owner in world football, league champions, and we buy... Sinclair, Maicon, Rodwell, Richard Wright!?) if it wasn't for this FFP bullshit we'd surely have got De Rossi, Thiago Silva and RvP and have the title virtually in the bag already! Absolutely gutted, I wish we could either fuck it off and call Platini's bluff or get the best lawyers available to blow it away somehow. Platini has pretty much handed the rags about 5 more titles that we should be winning. The twat.

The problem you have here is that you assume the motive in not signing Van Persie, Hazard and the lad who went to Bayern was that FFPR had "fucked us over". This appears not to be the case. Your first mistake is to believe Sheikh Mansour is prepared to by anyone for any amount because he's "the richest owner in world football". He isn't. He's invested heavily in players, but now expects the club to spend less and sell to buy. There are non-FFPR reasons why we didn't get the three players we were "in" for - the length of contract Van Persie wanted at his age, Hazard's wage demands which we considered excessive and the fact that the other lad prefered Bayern. It seems hard to think that City would have bought all three, even if FFPR were not being introduced, but we would have gone for one, and did so. All the players we bought in August were targets Roberto had identified but were not his "A-list" targets. In brief, the club is taking FFPR seriously and is determined to comply, but it doesn't seem to believe this means an end to activity in the transfer market. I believe we spent £55 million in August, which is nothing like expenditure in previous windows, but isn't pin money - especially from a side good enough to have just won the title!

 

[fbloke]

Re: Financial Fair Play will not affect us.

Wow, another FFPR thread and I didnt start it ;-)

Some of you may remember that I have been talking (positively) about FFPR for quite sometime and I must say that this forum has been one of the better places to find reasoned and balanced debate on the subject almost from day one.

In response to an early post about contacting UEFA about FFPR I actually did way back in the mists of time I called them and asked some simple but important questions.

I was provided with answers which made it clear that ANY income deemed legal within a club's host country would be allowed under the terms of FFPR.

That is a very important and specific statement as you can extrapolate from that the fact that the Etihad deal for example is perfectly acceptable to UEFA because it is signed off by City's auditors.

After my conversation with UEFA however they brought in the next stage of the loop hole closing which talked about 'fair market value' - this is to be judged by a group of UEFA experts and if they feel that a deal is above fair market value they will discount the mount above 'their' figure for FFPR purposes.

Once this fair market value test was introduced then FFPR as a threat to City and PSG etc died.

They cannot offer an opinion on fair market value that would stand up in court as the people who pay for the deals will simply stand up and say that they thought it was fair and reasonable to pay price X for sponsorship Y.

UEFA have in short tried to fix a market for sponsorships in their own image which the EU will find rather intriguing for a start.

Further to that UEFA in ignoring debt as an issue (when the whole world has debt repayment as its focus) can legitimately be accused of creating a cartel and being anti-competitive in a number of ways. The biggest one of course is that in stopping a business owner from investing his/her money in his/her own business in order to reach a level where income can be significantly increased via UEFA's own payment schedules/structures ( which are based on achievement ) could be argued is designed solely to stop any new companies from achieving the required levels of achievement.

The first question that would be asked by any crap lawyer would be which clubs benefit from FFPR most and is there any evidence of a relationship between those clubs and the people who drew up the rules that could be seen as anti-competitive?

Hi Andy. Just to make the point again that fair market value only applies to related party transactions as declared by the reporting entity. If we don't believe it's a related party transaction under the current agreed definition(s) then we don't have to apply the market value test. UEFA can audit our FFP submission but their definition of a related party is the same one our auditors will have used. So to force us to apply market value would involve successfully challenging that. Chance of that? Nil.

Exactly right and that's why I talked about the 'fair market value' test coming after they apparently realised that audited deals being given the OK would leave their hands somewhat tied.

They made a very big noise about FMV stuff in the media to mine and I assume your amusement ;-)

 

[Prestwich_Blue]

Re: Financial Fair Play will not affect us.

Wow, another FFPR thread and I didnt start it ;-)

Some of you may remember that I have been talking (positively) about FFPR for quite sometime and I must say that this forum has been one of the better places to find reasoned and balanced debate on the subject almost from day one.

In response to an early post about contacting UEFA about FFPR I actually did way back in the mists of time I called them and asked some simple but important questions.

I was provided with answers which made it clear that ANY income deemed legal within a club's host country would be allowed under the terms of FFPR.

That is a very important and specific statement as you can extrapolate from that the fact that the Etihad deal for example is perfectly acceptable to UEFA because it is signed off by City's auditors.

After my conversation with UEFA however they brought in the next stage of the loop hole closing which talked about 'fair market value' - this is to be judged by a group of UEFA experts and if they feel that a deal is above fair market value they will discount the mount above 'their' figure for FFPR purposes.

Once this fair market value test was introduced then FFPR as a threat to City and PSG etc died.

They cannot offer an opinion on fair market value that would stand up in court as the people who pay for the deals will simply stand up and say that they thought it was fair and reasonable to pay price X for sponsorship Y.

UEFA have in short tried to fix a market for sponsorships in their own image which the EU will find rather intriguing for a start.

Further to that UEFA in ignoring debt as an issue (when the whole world has debt repayment as its focus) can legitimately be accused of creating a cartel and being anti-competitive in a number of ways. The biggest one of course is that in stopping a business owner from investing his/her money in his/her own business in order to reach a level where income can be significantly increased via UEFA's own payment schedules/structures ( which are based on achievement ) could be argued is designed solely to stop any new companies from achieving the required levels of achievement.

The first question that would be asked by any crap lawyer would be which clubs benefit from FFPR most and is there any evidence of a relationship between those clubs and the people who drew up the rules that could be seen as anti-competitive?

Hi Andy. Just to make the point again that fair market value only applies to related party transactions as declared by the reporting entity. If we don't believe it's a related party transaction under the current agreed definition(s) then we don't have to apply the market value test. UEFA can audit our FFP submission but their definition of a related party is the same one our auditors will have used. So to force us to apply market value would involve successfully challenging that. Chance of that? Nil.

Exactly right and that's why I talked about the 'fair market value' test coming after they apparently realised that audited deals being given the OK would leave their hands somewhat tied.

They made a very big noise about FMV stuff in the media to mine and I assume your amusement ;-)

I wasn't amused to be honest as, although I knew it was a complete red-herring from our point of view, it set an impression among other people who didn't know that, who consequently assumed we were "cheating".

 

[fbloke]

Re: Financial Fair Play will not affect us.

Hi Andy. Just to make the point again that fair market value only applies to related party transactions as declared by the reporting entity. If we don't believe it's a related party transaction under the current agreed definition(s) then we don't have to apply the market value test. UEFA can audit our FFP submission but their definition of a related party is the same one our auditors will have used. So to force us to apply market value would involve successfully challenging that. Chance of that? Nil.

Exactly right and that's why I talked about the 'fair market value' test coming after they apparently realised that audited deals being given the OK would leave their hands somewhat tied.

They made a very big noise about FMV stuff in the media to mine and I assume your amusement ;-)

I wasn't amused to be honest as, although I knew it was a complete red-herring from our point of view, it set an impression among other people who didn't know that, who consequently assumed we were "cheating".

Taking a longer view by this time next year UEFA will have to announce to the world that everything in City's accounts is fine and acceptable.

 

[Marvin]

Re: Financial Fair Play will not affect us.

Guardian has a piece on Chelsea's accounts.

The small profit they made was due to exceptional items without which they would have made a loss of £20m and since the accounts they have spent a net £40m on players.

CFC still confident of meeting the UEFA breakeven target and their confidence seems well placed.

If you haven't seen it, it's worth a read http://www.guardian.co.uk/football/2013/jan/09/chelsea-cancelled-shared-profit-abramovich

 

[St Helens Blue (Exiled)]

Re: Financial Fair Play will not affect us.

Wow, another FFPR thread and I didnt start it ;-)

Some of you may remember that I have been talking (positively) about FFPR for quite sometime and I must say that this forum has been one of the better places to find reasoned and balanced debate on the subject almost from day one.

In response to an early post about contacting UEFA about FFPR I actually did way back in the mists of time I called them and asked some simple but important questions.

I was provided with answers which made it clear that ANY income deemed legal within a club's host country would be allowed under the terms of FFPR.

That is a very important and specific statement as you can extrapolate from that the fact that the Etihad deal for example is perfectly acceptable to UEFA because it is signed off by City's auditors.

After my conversation with UEFA however they brought in the next stage of the loop hole closing which talked about 'fair market value' - this is to be judged by a group of UEFA experts and if they feel that a deal is above fair market value they will discount the mount above 'their' figure for FFPR purposes.

Once this fair market value test was introduced then FFPR as a threat to City and PSG etc died.

They cannot offer an opinion on fair market value that would stand up in court as the people who pay for the deals will simply stand up and say that they thought it was fair and reasonable to pay price X for sponsorship Y.

UEFA have in short tried to fix a market for sponsorships in their own image which the EU will find rather intriguing for a start.

Further to that UEFA in ignoring debt as an issue (when the whole world has debt repayment as its focus) can legitimately be accused of creating a cartel and being anti-competitive in a number of ways. The biggest one of course is that in stopping a business owner from investing his/her money in his/her own business in order to reach a level where income can be significantly increased via UEFA's own payment schedules/structures ( which are based on achievement ) could be argued is designed solely to stop any new companies from achieving the required levels of achievement.

The first question that would be asked by any crap lawyer would be which clubs benefit from FFPR most and is there any evidence of a relationship between those clubs and the people who drew up the rules that could be seen as anti-competitive?

Have you there mobile number?