UEFA FFP investigation - CAS decision to be announced Monday, 13th July 9.30am BST

[Alan Oakes Shinpads]

Brooks, Cheeseman or Nield?

I lived next street up on Wykeham.

His surname was Amesbury,lived there till mid 70's and left the area and the country for awhile,trained as a chef initially Handforth/Wilmslow way.Think his Mam still lived there for a while,lost touch as I moved out of M14,currently exiled in Lobby gobbler land

 

[slbsn]

Not as great as state ?In what sense? If I owe you money but get someone else to pay you on my behalf i still owe you and you still get the income and declare it in the same way. If on the other hand I say you owe my company x amount but you actually owe me y then my accounts are wrong and are affected in a much more serious way. but for the arguments about related parties etc the former does not seem to be much of an issue but if it where the later then its more serous regardless of who related party issues

UEFA's case on the emails appears to be the nonsense concept that Etihad were only obligated for £8m of the £67.5m in the stated deal.

From Conn 14 Feb 2020: "The “leaked” emails and documents appeared to show that City’s owner, Sheikh Mansour bin Zayed al-Nahyan of the Abu Dhabi ruling family, was mostly funding the huge, £67.5m annual sponsorship of the City shirt, stadium and academy by his country’s airline, Etihad. One of the leaked emails suggested that only £8m of that sponsorship in 2015-16 was funded directly by Etihad and the rest was coming from Mansour’s own company vehicle for the ownership of City, the Abu Dhabi United Group."

 

[Jazzman]

To add to Stefan's reply to you, if we receive money from a sponsorship contract, that's revenue so goes into the Profit and Loss Account. We've received money (income) in consideration of an agreement to provide something, which in this case is publicity/advertising. In accounting terms, you debit the bank account (which is a balance sheet item) and credit the commercial revenue account (a P&L account item) with the cash received.

If we receive money from a loan, that's a balance sheet transaction. We've received an asset (cash) in return for accepting a liability to the lender. So in accounting terms we debit cash again but this time we credit a loan account. Both of these are on the balance sheet so the money received doesn't go into the P&L account (although any interest we pay will).

That, to me, shows the weakness of FFP as it stands. At the end of the day it's cash in the bank which you can spend the cash on players however it comes in, via a loan, sponsorship or the sale of a player. Obviously, if it's from the latter two, it's money that's been "earned" - money in, money out - whereas if that's a loan, it's not "earned" money and you've increased your liabilities. But FFP doesn't look at liabilities, just income and expenses. What UEFA should be doing is asking the likes of Chelsea and United how they would repay the debts they have (Chelsea's £1.4bn debt to Abramovich and United's now £650m debt to their lenders) if they needed to.

FFP, if it was seriously concerned with the fininacial sustainability of clubs, should be insisting that any debt is repayable over a given period, say 10 years for debt like United's or Chelsea's and maybe 20-25 years for infrastructure-related debt. Or else the notional repayment figure that would be required to settle that debt should be added to allowable FFP expenses. So if a club's notional debt repayment schedule under current interest rates would involve paying back £50m a year for a number of years, that £50m should be added to expenses for FFP purposes so the club can't spend that. That, to me, would level the playing field for clubs that don't have huge debts.

But does this actually mean that a club can borrow for example 200 million, spend it all on transfers, and in FFP terms this is no different to if a club sold players for 200 million first?
If yes it would mean that Barca and Real could borrow that money from the Spanish taxpayers, and use it outspend a club like City in the transfer market who raised money by selling shares in the company to Silverlake.
That seems absurd to me.

 

[ancoats]

That's going to be one big ass banner is it not?

Oh, and you're not in charge of spelling for it.

hahahaha your right about that knowing me i would add city instead of united hahahah

 

[MCC]

Quite a detailed piece on this website and that time-barred aspect is "misjudged"...

https://www.footballlaw.co.uk/articles/mcfc-uefa-ffp-and-the-cas

MCFC’s reliance upon the five-year limitation period and the ‘release’ from the May 2014 Settlement Agreement appears misjudged. The May 2014 Settlement Agreement expressly states that the same ‘will be subject to on-going and in depth monitoring, in accordance with the applicable rules’ and that if MCFC ‘fails to comply with any of the terms of [the May 2014 Settlement Agreement], the… CFCB Chief Investigator shall refer the case to the [AC], as foreseen in Art. 15 (4) [of the PRCFCB]’. The mere opening of proceedings is sufficient to stop time from running.[11] The Investigation commenced in March 2019, fewer than five years after the May 2014 Settlement Agreement. Further, if the CLFFPR violation allegations against MCFC are proven – as the AC Decision indicates they are – then MCFC was never entitled to a ‘release’ from the May 2014 Settlement Agreement and the CFCB was entitled to commence the Investigation/make the Referral Decision against MCFC.[12] This encapsulates a basic legal principle that no one shall benefit from their own wrongdoing.

 

[KS55]

It’s interesting that pre-ffp as we know it now , platini ranted on about how unfair it was on everyone that some clubs could compete in, and win, the Cl, whilst carrying huge amounts of debt.
He even named two clubs that he saw as serious culprits, one not so far away, and one from west London.
Where did that idea go?

Up g14 fundament. They threatened a breakaway yet again and rewrote the rules to cover P&L rather than balance sheet. Mr. Platini, of course, signed up. See that old interview with Platini by Martin Samuels.

 

[BluessinceHydeRoad]

Thanks to projectriver and PB yet again for answers to my earlier post. They have been most instructive and my confidence has certainly been reinforced by your contributions, projectriver. I have known your thoughts on FFP and debt for a long time now, PB, and I share them, though without any of your accounting expertise. They do form part of the bee I have in my bonnet about FFP and its status in law.

The law has to pay due regard to the intentions of the law makers and this is often not simple, but in the case of laws relating to business it is: investment is good, preventing it bad. FFP is NOT law but rules introduced by a sport governing body and the courts may need to consider what the real intentions of that body were when it introduced FFP. There is a clear temporal connection between the introduction of FFP and Abramovitch's regime at Chelsea and Sheikh Mansour's purchase of City. There is also the influence exerted on the form FFP took by those from certain clubs which were already banging the drun to put forward the idea that owner investment was actually "ruining football" for those clubs which "spent their own money". Platini switched his attention from the problem of debt to the question of spending and tried to convince every body that the consequences for football of limiting spending but also investment would be wholly beneficial. UEFA has only recently toned down the volume of its drum. It still claims that football is in a better financial state than in 2009, but this is hotly disputed and the liabilities of some clubs are far worse than they were. When we look at the liabilities of "elite" clubs we note a marked deterioration in their position. FFP has not reduced debt, certainly at those clubs which were influential in the direction it took. I think it would be wrong to outlaw debt and it would be unlawful (even leveraged buy outs in the UK) but the obvious weakness is that it does little if anything to discourage debt but it does absolutely nothing to ensure tat clubs ever pay the debt off. They have to pay the interest, but this is only similar to having to pay your bills. As you point out, PB, it is not genuinely concerned with the financial stability of clubs and I think a line of attack, in addition to the limits on investment, would be that it does nothing to achieve its main aim but actually puts obstacles in the way of clubs of which the financial stability is not in doubt at all.

Anyway, thank you both for your replies. My posts may belie the claim, but I feel I am rather the wiser for your assistance.

 

[BringBackSwales]

Not Mickey Chapman was it?

He was a big mate of my old man and was the only big red I remember living on Lowthorpe Street during that era.

Granted, a couple might have been hiding the fact through fear.

No mate it wasn’t. I don’t think he would have classed himself as a big red, he had a blue heart, just got brought up wrong

 

[KS55]

But does this actually mean that a club can borrow for example 200 million, spend it all on transfers, and in FFP terms this is no different to if a club sold players for 200 million first?
If yes it would mean that Barca and Real could borrow that money from the Spanish taxpayers, and use it outspend a club like City in the transfer market who raised money by selling shares in the company to Silverlake.
That seems absurd to me.

Borrow the money to buy a player for £100m on a five year contract. For the purposes of ffp, that goes into expenditure as £20m per year for the transfer, plus wages etc, plus interest on the loan. Borrowings naturally on the balance sheet as debt. If you are Barca or RM, by the magic of Spanish politics you wont be called in a hurry by the bank for not meeting your repayment obligations.

 

[nmc]

In the post-covid world I'd have thought their assets are likely to be considerably devalued.

Not really cos the state stumps up overvalued prices for their assets regardless, like stri
ps of land near the stadium and training grounds etc.