PL charge City for alleged breaches of financial rules

[halfcenturyup]

Think it would run into issues, I can’t say for certain but there should be some market value rules with connected parties.

The more interesting question for me is what is stopping them buying it back through owner investment as development costs (which are not included in the PSR calculation.

So in theory could they buy it back for £70 million and as such then continue to be able to account for the revenue as income.

I don’t know for certain on any of this (mostly based on the fact these are ridiculous made up rules that are anti business so makes little to no sense). Be interested to know the view of the experts to see if I’m on the right track with my thinking.

I think profits on real estate sales aren't included in PSR profits / losses for the simple reason that infrastructure costs when they are built and depreciated aren't considered costs. So it doesn't matter who they sell too and for how much.

Edit: Apparently, I was wrong. The profits are excluded from EFL PSR, but it's allowed as profit under PL PSR. How fucking stupid is that? Add it to the list of "The PL doesn't know what it's doing!". So you can lose as much money as you want, as long as you strip the club of its assets to compensate. Sustainability my arse.

So I suppose the only issue is fair value (and this profit is the only reason they didn't fail PSR. Remarkable).

 

[MCFC84000]

They'll be fine if the other company is not a third party or they could have got better value elsewhere.

Would love to see the rival bid!

 

[SatOnTheWall]

Todd B is the CEO of both involved

So definitely not a related party then. Glad we have cleared that up.

 

[waspish]

How do we know it’s allowed ? I thought these things happened then the premier league looked at them

Well if they are not we should find out in the next few weeks because it's out there now

 

[Stoned Rose]

The 36 million is the operating loss before profit on player sales of 122 million. So, as long as they are consistent with the other clubs, that is fine.

Ta mate.

 

[Silva2021]

I think profits on real estate sales aren't included in PSR profits / losses for the simple reason that infrastructure costs when they are built and depreciated aren't considered costs. So it doesn't matter who they sell too and for how much.

Edit: Apparently, I was wrong. The profits are excluded from EFL PSR, but it's allowed as profit under PL PSR. How fucking stupid is that? Add it to the list of "The PL doesn't know what it's doing!". So you can lose as much money as you want, as long as you strip the club of its assets to compensate. Sustainability my arse.

So I suppose the only issue is fair value (and this profit is the only reason they didn't fail PSR. Remarkable).

Yes, it’s ultimately might be a get out of jail card for that year but it is then going to give them more money to find the next.

The next question is if infrastructure (real estate) is excluded as a cost what in theory stops Chelsea just buying it back and putting those costs as owner investment.

If that can be done fair dues to them, make Masters and co, look like an absolute shambles.

Look forward to an amendment after the next PL meeting.

 

[WRicko]

I think profits on real estate sales aren't included in PSR profits / losses for the simple reason that infrastructure costs when they are built and depreciated aren't considered costs. So it doesn't matter who they sell too and for how much.

Edit: Apparently, I was wrong. The profits are excluded from EFL PSR, but it's allowed as profit under PL PSR. How fucking stupid is that? Add it to the list of "The PL doesn't know what it's doing!". So you can lose as much money as you want, as long as you strip the club of its assets to compensate. Sustainability my arse.

So I suppose the only issue is fair value (and this profit is the only reason they didn't fail PSR. Remarkable).

So we are sure they have passed PSR for the period when they sold this ?

 

[KS55]

So we are sure they have passed PSR for the period when they sold this ?

It’s clear as mud.

 

[waspish]

So we are sure they have passed PSR for the period when they sold this ?

Yep and Chelsea be looking to sell more assists buildings property to not fail PSR next season! Surprised really they they haven't closed that loop hole? Meaning a club can sell assets to pass PSR then buy them back later for less then in the duster do the same again! Fair play to Chelsea hedge fund owners finding that loop hole..

 

[feedmpenzaandhewillscore]

Yep and Chelsea be looking to sell more assists buildings property to not fail PSR next season! Surprised really they they haven't closed that loop hole? Meaning a club can sell assets to pass PSR then buy them back later for less then in the duster do the same again! Fair play to Chelsea hedge fund owners finding that loop hole..

Fair play to them for looking at the rule book and seeing what they could recoup. The Co-Op Live arena cost something like £365 million to build, I’m not sure what the split is on ownership between the CFG and Silverlake but it’s another potential lever to pull to boil some piss on revenue in the future. Not like we would need to mind.