PL charge City for alleged breaches of financial rules

[mscenterh750]

You’ll just have to roll with it…

That’s what some might say.

 

[mscenterh750]

Only cheating to their made rules. If the FFP rules did not exist it means we did it the united way and spend lots of money to assemble a good squad to go on an win leagues.

Could be a lot worse and have spent £600m in two years and still have a wank squad.

 

[Prestwich_Blue]

This is a few pages back now given that this thread marches on at a furious pace, but I saw it last night and thought it was interesting. It reflects various comments in the media, such as the recent piece by Adam Crafton in The Athletic quoting various sources from rival clubs, suggesting that City are widely seen as guilty throughout football.

However, IMO this is based on a flawed leap of logic. As the above states, the person whose view the poster is quoting believes that "it is widely considered City enhanced our revenues to comply with FFP". I don't have a problem with this opinion. Every club does so. It's precisely the type of behaviour that FFP encourages. However, I think that there's a flawed leap of logic.

The assumption among our detractors seems to be that we couldn't have achieved what we've managed to achieve without breaking the rules. IMO, that's entirely feasible. They imposed financial rules that they took wholesale from international finance, accounting and legal practice, so of course people can find workarounds that have been use in the real world.

I assume this is what the poster means when he states that "a sensible conversation tended to find the middle ground that probably points to City not being charged". That it's not widely understood shows how damaging the utterly hysterical media coverage of the whole affair has been.

The problem is that "utterly hysterical media coverage" has become the generally accepted "truth" and very few, if any, sensible conversations seem to be taking place publicly, bar on here.

We absolutely enhanced our revenue at some point, particularly with the sale of IP back in 2012/13. That involved selling image rights to Fordham and the setting up of the two subsidiaries City Football Services and City Football Marketing, to whom we also sold IP. That was purely to try to mitigate anticipated losses to enable us to meet the Annex XI transitional arrangement and avoid sanction. UEFA closed that route by (a) excluding intra-group transfers from allowable revenue and (b) widening the 'reporting perimeter' to include companies like CFS and CFM.

Those transactions could be seen as opportunistic, maybe even a bit sharp, but there was nothing illegal and didn't actually break any rules. That's what loopholes are, after all and it's very similar to Chelsea's sale of their hotel to their holding company.

We've also leveraged the owner's position in the ruling family to bring on sponsorships from Abu Dhabi-based companies, or those that have business relationships there. My understanding of the Hays sponsorship was that it was effectively a quid-pro-quo for them getting the exclusive contract to manage recruitment at the Abu Dhabi National Oil Company. I think there's a relationship or joint-venture with Nexen Tyre. Nothing wrong with these, assuming they're done at fair market value.

The allegations, as we've talked about on here ad nauseam, appear to involve:
(a) claiming revenue that's deemed to be equity investment,
(b) not declaring expenses (namely player & manager remuneration) that we should have, namely some players' image rights and Mancini's contract with Al Jazira.

But no one in the media appears to be linking (a) to the CAS case or has questioned why the PL has brought these charges in light of the pretty comprehensive and detailed evidence presented to support the outcome at CAS. And it's clear that even in the worst case outcome in (b) that the impact on meeting FFP/PSR will almost certainly not make a difference to us passing FFP and certainly not to us passing PSR.

These are the elements for what I'd describe as a 'sensible conversation'.

 

[Claytop]

I can’t decide if old Magic hat is more or less obsessed about City (& Stefan) than Nick Harris…

Honestly must not have anything else to do with his time.

 

[KS55]

I can understand fans with no idea of how business works not believing that we could ever have done it fairly. However you would think anyone with a modicum of business expertise would know that many established and hugely successful businesses have lost market leadership through being bloated with success and complacent or not taking the threat posed by a new competitor seriously and not reacting to improve themselves.

City under the Sheikh should be a textbook case study in business/marketing/leadership.

I think that most clubs have been run like sweetshops historically and when our execs came along with good business experience and changed the game, other clubs just could not believe it. The fact is City were run really poorly previously and the contrast is mind blowing. Look at the rags, the so called biggest club in England and: they are in debt up to their eyeballs, their stadium is falling apart, their player recruitment has been abominable for a decade and more nonsense besides. Scruffy Jim, well versed in big business, turns up and is asked what he is going to change at the old toilet. “Everything” he answered. And how? Recruit a CEO from City for a start. QED.

 

[Bodicoteblue]

The press and rival fans are an absolute textbook study in confirmation bias, they believe what they need to believe in order to sustain their belief system.

It makes me worry about the strain that is going to be put on an already struggling mental health service when we are cleared.
Some people seem to have invested so much emotion and faith in a guilty verdict that some kind of breakdown may occur in those who are already deep down enough to be violent towards us.
It has taken on a cult-like momentum, and I think there may be serious mental problems for some.

 

[Manchester_lalala]

That wasn't specifically set out in black and white iirc but even if not, it's a pretty safe assumption. In their submission to CAS, City talked about the 'accruals basis' of accounting, which is separate to the cash payments. That means if Etihad contract to pay us £60m a year over 10 years, we'll record £60m a year in the accounts, regardless of whether the cashflow is £60m a year or not.

If Etihad paid us £200m in year one, we'd still show that as £60m revenue in the P&L account, with £140m as deferred revenue in the balance sheet. If they paid us nothing the following year, we'd again show £60m revenue, but with deferred revenue of £80m.

So when Harris was going on about us under-stating the Etihad revenue, when he added up three years cash receipts and divided by three, he clearly had no idea about accruals accounting. The timing of the cashflow is irrelevant.

Shows you easily it is to manipulate the emails which were leaked. Without the accounts of Etihad and City, the emails are worthless.

 

[KS55]

It makes me worry about the strain that is going to be put on an already struggling mental health service when we are cleared.
Some people seem to have invested so much emotion and faith in a guilty verdict that some kind of breakdown may occur in those who are already deep down enough to be violent towards us.
It has taken on a cult-like momentum, and I think there may be serious mental problems for some.

The City are guilty cult. Massive (!) Membership in clubs’ boardrooms, on the terraces, in the media, on the PL board, in UEFA. Hon President: Senor Teabag.
Main activities: Hating Muslims, especially Arabs, lying.
Future Prospects: Mega Breakdown.

 

[KS55]

Shows you easily it is to manipulate the emails which were leaked. Without the accounts of Etihad and City, the emails are worthless.

I borrow from Criminal law. Even if the emails are evidence of Mens Rea, where’s the Actus Reus?
So many in the media don’t seem to understand this and think the emails are evidence of wrong doing. Actually, I don’t think they are decent evidence of intent but you can give the haters this as a sop, and then ask them where is the evidence of actual wrong doing? Is it in our accounts? Have you read them?
Er,,,,no.

Has any journo ever asked rival execs who castigate us these questions?
No? So down the conspiracy hole you go.

 

[Giovinco]

Is it wishful thinking on my part that I hope the premier league are trying to look for a way out of this