PL charge City for alleged breaches of financial rules

[WRicko]

I'll try.

FFP was originally introduced in 2010, to take effect for the first time from 2011/12. But clubs were concerned that player contracts entered into prior to 2010 could impact their FFP assessment even though they were unaware of the FFP rules at the time. UEFA therefore introduced a temporary rule that, in principle, clubs failing FFP in the initial two assessment periods wouldn't be sanctioned if they could show that their failure was solely a result of wages paid under contracts signed prior to June 2010.

As part of that arrangement, they set out in their FFP toolkit, which clubs had to follow, how to work out whether that was the case or not. The first assessment period covered 2011/12 and 2012/13 and there were three parts to the test, all of which had to be met to claim mitigation. One of those three related solely to the 2011/12 season and if you couldn't meet that, then you couldn't claim that mitigation, regardless of your financial results in 2012/13.

The initial test for 2011/12 was quite complicated, more than it needed to be, but we passed it and therefore could go on to test the other two conditions. I worked out at the time that we needed to show losses under £55m in 2012/13 to fully comply with the three tests. Thanks to the £24.5m from Fordham, we looked like we'd done that but for 2012/13, UEFA changed the part of the test that applied solely to 2011/12 just after we published our 2011/12 accounts, but that was in March or April 2013, well after our June 2012 year-end, so there was nothing we could do.

The revised test was actually much simpler and more logical, involving (if I remember correctly) simply deducting the applicable wage total from the net loss and seeing if the adjusted figure was a net profit. If it was, you were OK. However we were now on the wrong side of it compared to the original test and therefore couldn't claim mitigation.

Khaldoon mentioned in his statement, after it was revealed we'd failed FFP and were being sanctioned, the the issue was about the treatment of those pre-June 2010 wages. That's what made me go back and check the relevant rules, which is how I saw there'd been a change and was able to work out, based on the figures I had, that it was only a matter of £2-3m either way but on the new test we were the wrong side.

You can argue about the motive or morality of changing something after the chance to comply had passed by a few months. I compared it to driving on a road that had a 30mph limit on Friday, staying within the speed limit but then being told you were being prosecuted because they'd changed it to 20mph on Saturday. If we'd taken UEFA to court, I suspect that's the sort of argument we'd have used (although in a rather more sophisticated way).

Makes sense but there should never have been any issues it should have been wages not counted or possibly wages and amortization. I do not understand how they complicated it and how they where allowed to changed or what those changes are anyway it is what it is

 

[pauls]

I assume because the investigation was for the der spiegel allegations. It opened when uefa opened theirs, and once cas concluded it, there was no logic in the PL just carrying on investigating every year thereafter indefinitely.

It was a fair stance imo. They will argue that's failure to cooperate, but the club would probably argue the need to cooperate beyond what was being investigated, without a definitive end in sight.

Don't think the PL threw ANY resources at it as they planned the easy and cheaper option of supplementing the UEFA charges when found guilty at CAS.
That we didn't meant they then had then to look at it where it looks like Mancini and Fordham which activates FFP and PSR and then non cooperation which cumulatively lands at 115.
The most annoying thing had it been , Trafford,the Arse or Dippers it would have been conveniently swept under the carpet.
What's happened to Chelsea or Barcelona ffs!

 

[Silva61]

Wasn't Fordham setup specifically by 1or 2 ex directors of the club so we could then raise the funds to comply with FFP, and soon after the company ceased to exist.
So where did the 2.4m come from.
Can PB shed more light on this.

 

[Gaylord du Bois]

And I did, within three posts and then fucked him off and told him to stick to blogging.

Especially enjoyed, when he backtracked by trying to qualify what he actually meant by the Premier League NOW throwing all their resources at it, bankrolling the Independent Commission.

When it was kicked upstairs last year and has zero influence on the panel.

 

[Dribble]

I'll try.

FFP was originally introduced in 2010, to take effect for the first time from 2011/12. But clubs were concerned that player contracts entered into prior to 2010 could impact their FFP assessment even though they were unaware of the FFP rules at the time. UEFA therefore introduced a temporary rule that, in principle, clubs failing FFP in the initial two assessment periods wouldn't be sanctioned if they could show that their failure was solely a result of wages paid under contracts signed prior to June 2010.

As part of that arrangement, they set out in their FFP toolkit, which clubs had to follow, how to work out whether that was the case or not. The first assessment period covered 2011/12 and 2012/13 and there were three parts to the test, all of which had to be met to claim mitigation. One of those three related solely to the 2011/12 season and if you couldn't meet that, then you couldn't claim that mitigation, regardless of your financial results in 2012/13.

The initial test for 2011/12 was quite complicated, more than it needed to be, but we passed it and therefore could go on to test the other two conditions. I worked out at the time that we needed to show losses under £55m in 2012/13 to fully comply with the three tests. Thanks to the £24.5m from Fordham, we looked like we'd done that but for 2012/13, UEFA changed the part of the test that applied solely to 2011/12 just after we published our 2011/12 accounts, but that was in March or April 2013, well after our June 2012 year-end, so there was nothing we could do.

The revised test was actually much simpler and more logical, involving (if I remember correctly) simply deducting the applicable wage total from the net loss and seeing if the adjusted figure was a net profit. If it was, you were OK. However we were now on the wrong side of it compared to the original test and therefore couldn't claim mitigation.

Khaldoon mentioned in his statement, after it was revealed we'd failed FFP and were being sanctioned, the the issue was about the treatment of those pre-June 2010 wages. That's what made me go back and check the relevant rules, which is how I saw there'd been a change and was able to work out, based on the figures I had, that it was only a matter of £2-3m either way but on the new test we were the wrong side.

You can argue about the motive or morality of changing something after the chance to comply had passed by a few months. I compared it to driving on a road that had a 30mph limit on Friday, staying within the speed limit but then being told you were being prosecuted because they'd changed it to 20mph on Saturday. If we'd taken UEFA to court, I suspect that's the sort of argument we'd have used (although in a rather more sophisticated way).

Thank you so very much for this detailed explanation as to what happened with our first run in with UEFA.

This is the reason Khaldoon was apoplectic with rage with them at the time. We'd worked closely & diligently with them to ensure we passed FFP, & UEFA were more than happy to oblige to ensure we complied.

HOWEVER, little did we know what UEFA's true intent was. As you correctly stated, in March 2013, we submitted our interim accounts to UEFA to ensure everything was OK. They confirmed it was & that we'd passed FFP by £3m.

We told them we'd submit our full verified accounts within four weeks, & it's during that period they shifted the monitoring period back by twelve months without telling us, which meant by the time we submitted our full audited accounts, it included Carlos Tevez's transfer & wages which meant we were now £3m OUTSIDE the FFP limit.

We were hit with a €50m fine, a CL squad reduction to twenty players for three seasons, of which four had to be club trained & four had to be association trained.

Crucially for City, UEFA had it written into their FFP rules that as part of their improvement policy, they could make FFP changes without prior notice.

Essentially City revealed their hand, so UEFA/G14 knew EXACTLY what they had to do to stiff us, & there was fuck all we could do about it!

This is why Khaldoon said we'd "Take the pinch" & it was reported he said privately that rather than ever pay another UEFA/G14 FFP fine again, we'd instead spend £30m on the world's best lawyers & sue them out of existence.

This is why all the subsequent non-cooperation charges were levied against us with later "breaches". City were open & cooperative with UEFA in 2013, when all along they were plotting to double cross us at the behest of the G14.

Once bitten, twice shy. City would rather receive fines for non-cooperation than reveal our hand, & get shafted by UEFA/G14 again.

Fuckin dirty, cheating scum sucking bastards, the lot of em!

 

[halfcenturyup]

I'll try.

FFP was originally introduced in 2010, to take effect for the first time from 2011/12. But clubs were concerned that player contracts entered into prior to 2010 could impact their FFP assessment even though they were unaware of the FFP rules at the time. UEFA therefore introduced a temporary rule that, in principle, clubs failing FFP in the initial two assessment periods wouldn't be sanctioned if they could show that their failure was solely a result of wages paid under contracts signed prior to June 2010.

As part of that arrangement, they set out in their FFP toolkit, which clubs had to follow, how to work out whether that was the case or not. The first assessment period covered 2011/12 and 2012/13 and there were three parts to the test, all of which had to be met to claim mitigation. One of those three related solely to the 2011/12 season and if you couldn't meet that, then you couldn't claim that mitigation, regardless of your financial results in 2012/13.

The initial test for 2011/12 was quite complicated, more than it needed to be, but we passed it and therefore could go on to test the other two conditions. I worked out at the time that we needed to show losses under £55m in 2012/13 to fully comply with the three tests. Thanks to the £24.5m from Fordham, we looked like we'd done that but for 2012/13, UEFA changed the part of the test that applied solely to 2011/12 just after we published our 2011/12 accounts, but that was in March or April 2013, well after our June 2012 year-end, so there was nothing we could do.

The revised test was actually much simpler and more logical, involving (if I remember correctly) simply deducting the applicable wage total from the net loss and seeing if the adjusted figure was a net profit. If it was, you were OK. However we were now on the wrong side of it compared to the original test and therefore couldn't claim mitigation.

Khaldoon mentioned in his statement, after it was revealed we'd failed FFP and were being sanctioned, the the issue was about the treatment of those pre-June 2010 wages. That's what made me go back and check the relevant rules, which is how I saw there'd been a change and was able to work out, based on the figures I had, that it was only a matter of £2-3m either way but on the new test we were the wrong side.

You can argue about the motive or morality of changing something after the chance to comply had passed by a few months. I compared it to driving on a road that had a 30mph limit on Friday, staying within the speed limit but then being told you were being prosecuted because they'd changed it to 20mph on Saturday. If we'd taken UEFA to court, I suspect that's the sort of argument we'd have used (although in a rather more sophisticated way).

Tbf to UEFA, and before people start frothing at the mouth about the injustice of it all, I feel I should point out:

i) The actual wording of the rule in respect of pre-2010 squad costs supported the method used in the 2012/13 toolkit, iirc. So, while we may have been screwed by the toolkit change in 2012/13, UEFA did have a defence against that, to some degree.

ii) This change in the toolkit, wasn't the only reason why, in the eyes of UEFA, the club failed FFP. They also raised a significant number of objections to some of the accounting treatments used by the club, including the inclusion of amortisation in the pre-2010 squad cost calculation (not just wages as UEFA wanted). Others were the revenue from Fordham, the revenue from the sale of IP to CFG and the fair value of AD sponsorships, any of which could have led to an adjustment of just the few million required to push the club into a breach.

My point being UEFA had plenty of other strings to their bow to push the club over the loss limit so that the pre-2010 squad costs would become irrelevant. So, it was as much in the club's interests to settle, maybe more than UEFA's, and then to claim the dispute was just about the pre-2010 squad costs. When, actually, it most likely wasn't.

 

[halfcenturyup]

Didn't we change ownership name in 2018 to Brookshaw Developments from ADUG?

Newton, in 2021. The two companies (ADUG and Newton) have different forms (Limited and LLC), so it is more likely CFG was transferred to a different company owned by Mansour.

I also wondered why Mansour did that. I did think it may have been to clarify ownership due to the investigations, or to make it more difficult (or I suppose easier, if Mansour is that way inclined) to get access to the accounts. I don't know enough about AD companies to come to a conclusion, tbh.

 

[Norbiton]

Tbf to UEFA, and before people start frothing at the mouth about the injustice of it all, I feel I should point out:

i) The actual wording of the rule in respect of pre-2010 squad costs supported the method used in the 2012/13 toolkit, iirc. So, while we may have been screwed by the toolkit change in 2012/13, UEFA did have a defence against that, to some degree.

ii) This change in the toolkit, wasn't the only reason why, in the eyes of UEFA, the club failed FFP. They also raised a significant number of objections to some of the accounting treatments used by the club, including the inclusion of amortisation in the pre-2010 squad cost calculation (not just wages as UEFA wanted). Others were the revenue from Fordham, the revenue from the sale of IP to CFG and the fair value of AD sponsorships, any of which could have led to an adjustment of just the few million required to push the club into a breach.

My point being UEFA had plenty of other strings to their bow to push the club over the loss limit so that the pre-2010 squad costs would become irrelevant. So, it was as much in the club's interests to settle, maybe more than UEFA's, and then to claim the dispute was just about the pre-2010 squad costs. When, actually, it most likely wasn't.

It seems that some of UEFA’s concerns, eg Fordham, only came about because City wrongly believed, apparently with UEFA’s initial acceptance, that they had passed the 2011/12 requirements and were trying to find ways to meet the 2012/13 ones too. So the changes to the toolkit may well have had a significant impact

 

[halfcenturyup]

It seems that some of UEFA’s concerns, eg Fordham, only came about because City wrongly believed, apparently with UEFA’s initial acceptance, that they had passed the 2011/12 requirements and were trying to find ways to meet the 2012/13 ones too. So the changes to the toolkit may well have had a significant impact

Possibly, but the Fordham and CFG IP sales stuck out like a sore thumb, they weren't going to be missed and could have been dismissed as "levers" and, again to be brutally honest, some of the minor AD sponsorships were pretty generous and could have been scaled down by the couple of million needed, even before we consider the disputed inclusion of amortisation in the pre-2010 squad costs that UEFA didn't like. I think it was a fair cop, tbh.

And the settlement was pretty good. Some small inconveniences, a bit of money but closure of the IP, Fordham, fair value and related party issues once and for all (with UEFA at least).

 

[Gone for a Burton]

BREAKING NEWS -:

PL have just announced that the main case against City is playing a FALSE centre forward in matches.

City have pleaded guilty as charged and asked for 115 cases to be taken into account.