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Man City Charges

bisright1 said:
Well what happened is that Etihad didn't give them the money, they have their own balance sheet and money did not leave it to go to City.

I struggle to understand why Etihad didn't just give them the money. But apparently there is strong evidence that they just didn't do that, that the money was faked and went direct from the family to City group.
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So therein lies the problem, I always found it bizarre most clubs hadn’t taken that approach.

IE why PIF didn’t just become Newcastles FOS for 500M a season etc.
 
OTL said:
Im not sure if the PSR saving clubs is the key take away. I cant help but seeing it as a way of keeping smaller clubs down and protecting the dominant status of the likes of Man Utd Arsenal and Liverpool.
All the critisism of Amortisation is oh clubs could go bust.....but it also allows them to compete with the three darlings of the premier league. Beggars cant be choosers some wish to attempt to reach the top table. Oh and multi club ownership allowing all that goes with it tut tut we cant have that these clubs may reach the top table heaven forbid.
The Bournemouth's of this world would need to buy and sell 10 Alex Scotts preferably in the next couple of windows and quadruple their stadium capacity to have a shot at the top table....which is exactly how the three amigos would like it to be ...no one to challenge their financial advantage.
Any new changes to financial control will likely come from defeating loophole maestros like our good selves. City for their part have been stupid and just cheated. blatantly.
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Keep going round in houses on this one;

On Bournemouth, yeah that is exactly what they would need to do.

The alternative is this which is literally what happened to a tonne of clubs in the 00s

Chelsea (I could use any big club), generate about £500m per year in revenue and spend about £550m per year.
Bournemouth generate £200m per year in revenue. And spend about £220m per year.

The suggestion is that it would be lovely if it was allowed for some billionaire to increase Bournemouth's costs to £400-450m per year so they have a chance of competing with Chelsea for the title. Which PSR doesn't allow.

What would happen if it was allowed - the same thing that happened to Villa, Leeds, Southampton etc. etc. etc

1. Eventually that great benefactor will stop giving them an extra £150-200m per year.
2. Bournemouth will likely have failed to increase their revenue beyond an extra 50 or 60m. It's pretty hard to do much more there, they are a seaside town of 200k residents and have a 12k stadium.
3. Bournemouth will end up in a debt spiral. Every year they are spending way beyond their revenue.
4. Bournemouth begin a firesale, to hold off the creditors, to try and bring their costs back down to the 220m mark, this is a lot harder than spending money.
5. Bournemouth inevitably get relegated. So then they need their costs to come down further as their revenue is now more like £120m.
6. Administration, Go bust. Hope they get a new buyer. (And in Bournemouth's case...its not as likely as clubs like Leicester who have double the population, or Newcastle with 4 times.
 
All Barco no bite said:
Did we not do the same thing with Infinite Athlete? I still refuse to believe that was a legitimate sponsorship
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No, I don't think so. Incestuous yes, shuffling money amongst the group yes, but massively over inflating the fair market value of the sponsorship, no I don't think we did.

Now the value we attributed to the women's team to pay money to ourselves, that I think definitely deserves closer scrutiny.
 
OTL said:
Im not sure if the PSR saving clubs is the key take away. I cant help but seeing it as a way of keeping smaller clubs down and protecting the dominant status of the likes of Man Utd Arsenal and Liverpool.
All the critisism of Amortisation is oh clubs could go bust.....but it also allows them to compete with the three darlings of the premier league. Beggars cant be choosers some wish to attempt to reach the top table. Oh and multi club ownership allowing all that goes with it tut tut we cant have that these clubs may reach the top table heaven forbid.
The Bournemouth's of this world would need to buy and sell 10 Alex Scotts preferably in the next couple of windows and quadruple their stadium capacity to have a shot at the top table....which is exactly how the three amigos would like it to be ...no one to challenge their financial advantage.
Any new changes to financial control will likely come from defeating loophole maestros like our good selves. City for their part have been stupid and just cheated. blatantly.
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You only have to look at the list of clubs entering administration prior to FFP and then afterwards to understand that it's much more likely that those owners will run the clubs into debt than establish the club as a competitor. Not every owner is a Roman.

The safest thing to do is to legislate for the more common outcome even if it comes at the risk of making it harder for the Bournemouths to compete. End of the day I am sure Bournemouth fans are more concerned about having a club to support than they are titles.
 
Clearlake Cartel said:
But this is exactly what I’m struggling to wrap my head around.

Why can’t Etihad (who are owned by the Abu Dhabi Family who also coincidentally own City) sponsor Man City for whatever sum they want? Why have they had to hide it like this and thus brake some FFP/PSR/TLA rules? It’s their money to do with as they wish.

I’m 100% we all knew at the time of the sponsorships it was essentially self sponsorship and a way around the rules, it’s no big secret why is it such a big deal now.

As opposed to a Clearlake, for example who have borrowed unimaginable sums from JP Morgan & Ares Management at some vile interest rates.

I’m just struggling to see why it’s preferable from the PL’s POV for clubs to borrow money as opposed to use their own.
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But I think that whilst your argument and rationale is sound it isn't the point of the issue.

Many people will agree that the PSR/FFP environment is a nonsense, a restraint of trade for some and if clubs were conducting annual solvency tests to prove sustainability then why shouldn't the ultra rich continue pumping money in.

Many others will argue that it devalues the competitive nature of the competition creating a glass ceiling that most in the league can't break through.

Both arguments have merit in my opinion. But that isn't the point is it? Regardless of our thoughts regarding the regulatory framework in place, those are the rules of the competition and they apply to all. Fraudulently circumventing those rules because they don't fit your own model or perception is what is unpalatable especially as significant sporting gain has clearly resulted.
 
bisright1 said:
Keep going round in houses on this one;

On Bournemouth, yeah that is exactly what they would need to do.

The alternative is this which is literally what happened to a tonne of clubs in the 00s

Chelsea (I could use any big club), generate about £500m per year in revenue and spend about £550m per year.
Bournemouth generate £200m per year in revenue. And spend about £220m per year.

The suggestion is that it would be lovely if it was allowed for some billionaire to increase Bournemouth's costs to £400-450m per year so they have a chance of competing with Chelsea for the title. Which PSR doesn't allow.

What would happen if it was allowed - the same thing that happened to Villa, Leeds, Southampton etc. etc. etc

1. Eventually that great benefactor will stop giving them an extra £150-200m per year.
2. Bournemouth will likely have failed to increase their revenue beyond an extra 50 or 60m. It's pretty hard to do much more there, they are a seaside town of 200k residents and have a 12k stadium.
3. Bournemouth will end up in a debt spiral. Every year they are spending way beyond their revenue.
4. Bournemouth begin a firesale, to hold off the creditors, to try and bring their costs back down to the 220m mark, this is a lot harder than spending money.
5. Bournemouth inevitably get relegated. So then they need their costs to come down further as their revenue is now more like £120m.
6. Administration, Go bust. Hope they get a new buyer. (And in Bournemouth's case...its not as likely as clubs like Leicester who have double the population, or Newcastle with 4 times.
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Spot on.
 
At this point in time , without sight of the various documents that are still to be published, we can only go on the 40 page summary which in itself is an incredibly damming document.

The theme throughout is that certain members of the clubs senior management embarked on a scheme whereby monies were injected not by authorised means which would have been treated as equity ( they were already at the limit of £105m ) example after example was uncovered of what has been termed an disguised equity scheme

What broadly happened was this.

A sponsor agreed to pay £x but either by way of a contribution from the owners resources ( apparently he hasn’t been proven to have know about money being diverted from his fund) or from a separate fund run by the UAE ruler( who is City owners brother) by way of grants to the sponsors business the actual sums reaching Cities coffers were far far greater that the sponsors found from their resources .

There then is the question around fair market value of those vastly inflated deals and as a consequence questions around related party transactions.

There were then details as to how they artificially reduced clubs costs.

For instance significant sums due to the likes of Mancini weren’t in his City contract but a second contract with another of the City Group which the IC said was an expense due to City not one of the other clubs in the City group.

You then have the fact that a Company called Fordham was formed to purchase from the club elements of the players image rights. This manoeuvre generated £20m income. The finding was that rather than allowable income this £20m should be treated as equity because it was the owners company who had paid the money.

The report details a staggering sum of£800+ m should be re classified in their accounts as it wasn’t income and must be treated being owners equity injection.

At this point it’s worth mentioning that our current owners introduced the notion, and it was agreed by the FA/PL&UEFA in our settlements ,that no matter how you looked at the numbers the supposed sum that RA paid via 3rd party entities we wouldn’t have failed PSR /FFP. In cities case the IC state clearly that City failed those limits by significant sums.We are said not to have gained sporting advantage it’s almost certain that dispensation won’t be afforded to City.

The consequences are massive. City are said to have submitted false accounts, false submissions re UEFA licensing, failing to act in good faith. Add to all that the fact City have been doing all they can to not engage with the authorities.

The list of their charges and guilty findings amount to 114 . The one the IC didn’t agree was proven was around one charge of not assisting the PL.

At an appeal City won’t be able to introduce any evidence that was in existence and known about at the time of the original hearing. I have read that Etihad are claiming that they weren’t approached or given the opportunity to defend the suggestions re them being complicit . The strange thing is why didn’t City call them or if they did was that evidence just dismissed ?

Sanctioning hearing will be following pretty soon. Current PL rules require the appeal to be dealt with in circa 90days. The appeal won’t be a re run of the hearing but more like a panel marking the ICs work. Sky have been reporting that any move to expel City from the PL has to go before a vote of the clubs. There is indeed a rule that says that but the rules around ICs and sanctions are not restricted.

City have a route to the High Court but that won’t afford an opportunity to appeal the outcome as such but there is a narrow route to challenge the rules , the competence and or bias of the IC members but when you factor in the fact that City have already tried some of those arguments in a separate HC application and they, City, lost and them some?

Apologies for the long post but this is real messy situation
 
terraloon said:
At this point in time , without sight of the various documents that are still to be published, we can only go on the 40 page summary which in itself is an incredibly damming document.

The theme throughout is that certain members of the clubs senior management embarked on a scheme whereby monies were injected not by authorised means which would have been treated as equity ( they were already at the limit of £105m ) example after example was uncovered of what has been termed an disguised equity scheme

What broadly happened was this.

A sponsor agreed to pay £x but either by way of a contribution from the owners resources ( apparently he hasn’t been proven to have know about money being diverted from his fund) or from a separate fund run by the UAE ruler( who is City owners brother) by way of grants to the sponsors business the actual sums reaching Cities coffers were far far greater that the sponsors found from their resources .

There then is the question around fair market value of those vastly inflated deals and as a consequence questions around related party transactions.

There were then details as to how they artificially reduced clubs costs.

For instance significant sums due to the likes of Mancini weren’t in his City contract but a second contract with another of the City Group which the IC said was an expense due to City not one of the other clubs in the City group.

You then have the fact that a Company called Fordham was formed to purchase from the club elements of the players image rights. This manoeuvre generated £20m income. The finding was that rather than allowable income this £20m should be treated as equity because it was the owners company who had paid the money.

The report details a staggering sum of£800+ m should be re classified in their accounts as it wasn’t income and must be treated being owners equity injection.

At this point it’s worth mentioning that our current owners introduced the notion, and it was agreed by the FA/PL&UEFA in our settlements ,that no matter how you looked at the numbers the supposed sum that RA paid via 3rd party entities we wouldn’t have failed PSR /FFP. In cities case the IC state clearly that City failed those limits by significant sums.We are said not to have gained sporting advantage it’s almost certain that dispensation won’t be afforded to City.

The consequences are massive. City are said to have submitted false accounts, false submissions re UEFA licensing, failing to act in good faith. Add to all that the fact City have been doing all they can to not engage with the authorities.

The list of their charges and guilty findings amount to 114 . The one the IC didn’t agree was proven was around one charge of not assisting the PL.

At an appeal City won’t be able to introduce any evidence that was in existence and known about at the time of the original hearing. I have read that Etihad are claiming that they weren’t approached or given the opportunity to defend the suggestions re them being complicit . The strange thing is why didn’t City call them or if they did was that evidence just dismissed ?

Sanctioning hearing will be following pretty soon. Current PL rules require the appeal to be dealt with in circa 90days. The appeal won’t be a re run of the hearing but more like a panel marking the ICs work. Sky have been reporting that any move to expel City from the PL has to go before a vote of the clubs. There is indeed a rule that says that but the rules around ICs and sanctions are not restricted.

City have a route to the High Court but that won’t afford an opportunity to appeal the outcome as such but there is a narrow route to challenge the rules , the competence and or bias of the IC members but when you factor in the fact that City have already tried some of those arguments in a separate HC application and they, City, lost and them some?

Apologies for the long post but this is real messy situation
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It's a great post, thank you.
 
Remodez said:
Well hard to say really as you only really hear about it once it's bad. There's stats out there that show that losses are lower under FFP than 10-15 years ago despite inflation and if you look at the list of clubs entering administration prior FFP and after it is significantly less.

A popular and recent example would probably be Leicester. Without the current rules they would have just kept on spending and spending.
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The research doesn't fully agree. Profits are up, but sustainability is not: Henley University study. There is a persistent structural issue where the profits are simply used to fund further player acquisition rather than pay down debt, especially as the boom in private credit means that transfer instalments are essentially just the transfer of high-interest debt notes to other clubs. This is very different to the past where money was owed to private owners or in the worst case, banks.

FFP allowed for a temporary reprieve but the debt bubble is calling, and when it pops it will be existential since the money is owed to parties outside the closed system.
 
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Remodez said:
Owner investment should be restricted, this is not money the club actually generates. Dumping a lot of debt without the means to pay it off with reveune is not something that should be encouraged. A club going from mid table one season to competiting for the title next season off their owner's money is not sustainable.

Clubs can still compete but it will take years of careful planning rather than blowing through money during a short period of time and if a owner is willing to dedicate the time to plan that long chances are they are not going to leave and saddle the club with debt the moment they get bored.
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But owners are allowed to spend billions on a new stadium and load the club with debt..
Anyway with our funding from Roman and City's funding, there was no expectation that it had to be repaid.
If an owner spends money on club transfers and declares that it's not a loan , there's no debt to be repaid. .
Every club has large increasing debts, years after FFP was supposed to prevent it.
It has only prevented anyone else becoming another Chelsea .
( Just look at our club, from debt free to massive debt within a few seasons with FFP firmly in place.. Hopefully the restrictions in the sale contact limiting the amount of debt they can load on the club still stands, although you try and find out what that figure is..
 
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Scott Harris said:


If anything, this is a good argument for why City shouldn't have been allowed to have these owners in the first place.
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Been waiting for this. I also wouldn't be surprised if Burnham already knew about his as well and the fact this that this whole issue will now be watered down, so has played the hand he has accordingly.
  • Burnham comes out stating how disappointing it would be for this to have deeper ramifications (so the real political sentiment is expressed)
  • Burnham then steps back saying what will be will be.
  • Emiratis come in hard insinuating diplomatic and trade relations could be hit (fuel is already going through the roof)
  • Lo and behold a technicality raised by Man City actually gets a foothold with the appeals panel.
  • Verdict and punishment gets watered down significantly.
  • Burnham saves his trade relations and still gets to put it out that due process has been observed.
 
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SydneyChelsea said:
The research doesn't fully agree. Profits are up, but sustainability is not: Henley University study. There is a persistent structural issue where the profits are simply used to fund further player acquisition rather than pay down debt, especially as the boom in private credit means that transfer instalments are essentially just the transfer of high-interest debt notes to other clubs. This is very different to the past where money was owed to private owners or in the worst case, banks.

FFP allowed for a temporary reprieve but the debt bubble is calling, and when it pops it will be existential since the money is owed to parties outside the closed system.
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But Syd, income isn't profit.
Every club's spending is larger than it's income.
Every club has large and increasing debts despite massive Broadcasting income and other income.
FFP hasn't stopped debt from increasing or increasing borrowing at high interest rates.
 
Clearlake Cartel said:
I’m still struggling to see why an owner using their own money (albeit through the back door) is considered bad but the likes of Clearlake & the Glasers running up insurmountable debt via continuous borrowing is OK?

Whole world is f**ked. Best we can hope for is a Third World War and we can all go back to getting our priorities straight.
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Yeah, dying of radiation sickness in a nuclear winter is definitely the answer to sorting out billionaires playing with football clubs to the detriment of relatively few people that rely heavily on the affairs of young men earning 200 grand a week to kick a bag of wind around for their happiness.
 
Some still haven't clocked how much collateral damage the entire English football pyramid has absorbed because of City's crimes.
 
The Rising Sun said:
But owners are allowed to spend billions on a new stadium and load the club with debt..
Anyway with our funding from Roman and City's funding, there was no expectation that it had to be repaid.
If an owner spends money on club transfers and declares that it's not a loan , there's no debt to be repaid. .
Every club has large increasing debts, years after FFP was supposed to prevent it.
It has only prevented anyone else becoming another Chelsea .
( Just look at our club, from debt free to massive debt within a few seasons with FFP firmly in place.. Hopefully the restrictions in the sale contact limiting the amount of debt they can load on the club still stands, although you try and find out what that figure is..
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Well the idea behind allowing funding for stadiums, training facilities, etc is that these are things that will benefit the club long after the owner is gone and also generates it's own revenue. Worse case scenario it can also be sold on.

99% of owners are not Roman or City so this is a moot point.

Clubs with increasing debts are spending more than they generate and those that do make profit blowing it on transfers instead of investing in long term growth. FFP ultimately can't tell people what to do with their money, all it does is sanction them and put a stop to it before it gets much worse.

It only stops other teams becoming another Chelsea in the short term, long term it is entirely possible but most owners are not willing or simply able to play the long game.
 
Clearlake Cartel said:
I’m still struggling to see why an owner using their own money (albeit through the back door) is considered bad but the likes of Clearlake & the Glasers running up insurmountable debt via continuous borrowing is OK?

Whole world is f**ked. Best we can hope for is a Third World War and we can all go back to getting our priorities straight.
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Yeah, dying of radiation sickness in a nuclear winter is definitely the answer to sorting out billionaires playing with football clubs to the detriment of relatively few people that rely heavily on the affairs of young men earning 200 grand a week to kick a bag of wind around for their happiness.
 
so Citeh lawyers took several years to lose 115 to 0
and now they are putting some even better lawyers on the appeal
....that would be quite a comeback in footballing terms.
 
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