I posted what you've replied to quickly while I was on the tram going home. then was out for the evening.
Having reflected I agree that my language was imprecise and there's no doubt that in the worst case scenario these are potentially serious charges. That worst case scenario involves us deliberately concealing legitimate expenses via Fordham and Al Jazira, and also deliberately reporting equity contributions that should go into the balance sheet as revenue. Additionally, by doing that we've presented a false picture of our finances (a potential criminal offence in itself) and have also misstated our finances vis-a-vis the PL and UEFA's financial control rules. So, yes, that certainly would entail serious consequences if proven.
My position however is that this worst case scenario is a false one.
- The Mancini contract is a complete red herring, involving a total sum of less than £6m over three years when we reported huge losses. And if the PL has thrown that red herring into the pot, some on here feel it really can't be too confident in the rest of its case. The possible real reason for that contract w not to hide what should have been legitimate expenses off the books but to either carry on a contract that might have been in place prior to Mancini joining us, or to confer some tax advantage to him.
- The Fordham one wasn't done to conceal expenses but was a device to increase revenue in 2012/13 in order to try to take advantage of the Annex XI provisions. Had we known in 2011/12 that we were never going to meet the requirements then I very much doubt we'd have entered into the arrangement. And we know that UEFA discussed this with us around 2014 or 2015, and no charges ever arose from that.
So you could take the view that these were fraudulent arrangements, knowingly entered into to hide expenses, or you could take the view that these were maybe artificial contracts but there was nothing illegitimate about them and that they were within rules that existed at the time, maybe at worst pushing the boundaries of the letter of those rules. My view is the latter opinion. And even if we take the worst case scenario view, it's probably unlikely there will have been any impact on FFP or the PL's Short Term Cost Control rules that were in force at the time.
Then there's the sponsorship charges, where we're assuming that there's potentially
- A second attempt to challenge the legitimacy of those sponsorships in some way, meaning that we've significantly overstated our revenue and have deliberately misreported equity investment as revenue
- An attempt to prove we've misreported related parties.
The first is potentially the most serious of all the charges, but unless the PL have a smoking gun that UEFA didn't have, that's unlikely to succeed. And, as I've said, the only snippet I've heard on this is that we presented the same evidence to the IC as we presented to CAS. But of course we don't know yet hat the PL found as part of its discovery process.
The related party issue, as I've said before, is one that runs through all our previous entanglements with the authorities, from the 2014 settlement, via CAS and the APT rule through to these charges. This will be the first time it's been properly tested and it would be a major shock if the Abu Dhabi companies were declared to be related parties by the IC. Our auditors, as Stefan has said, will want to be 200% sure of their ground on this, and that's not changed their view in the slightest. And even on the off chance that the IC did come down on the PL's side, then there has been nothing more han a technical misreporting, rather than financial chicanery.
So these are potentially serious charges I agree but my view is that the scenarios that make them serious (deliberate concealment) probably didn't exist.
Maybe you're being ultra-curious and maybe I'm being over#confident. We'll only know when we hear the outcome though.
