Author Topic: Financial Fair Play - developments in here  (Read 169012 times)

Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #160 on: August 26, 2013, 12:25:19 am »
So Manchester Blue, lets me get a few things straight,The Abu Dhabi Executive Council is the government of Abu Dhabi? Correct?

Its government owns and runs the big companies of the emirate and the council members sit on the boards of said companies, Correct?

City owner Sheik Mansour is deputy prime minister of the council, alongside many of his family members who sit on the various boards of the government run companies, such as Etihad chairman and  Mansour's half brother, Hamed al Nahayan, The City chairman Khaldoon also sits on this executive council.

My question to you is this,
It what universe are these not related parties? Its a royal family who run the government which in turn run the companies, how are they not related?
In the universe of accounting standards (and therefore FFP) they are not related parties and that's all that matters.

You're applying your own, completely subjective opinion which, while interesting, is utterly irrelevant and invalid in this context. In fact, under IAS 24, government-related entities like the Abu Dhabi Executive Council & Etihad are effectively exempt from reporting related party transactions or being classed as a related party. In the words of Rafa - "and this is a fact".

Offline Acaustiq

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Re: Financial Fair Play - developments in here
« Reply #161 on: August 26, 2013, 02:40:42 am »
To answer your points Acaustiq, I appreciate what you're trying to say but you've taken some paragraphs and sentences out of context, plus you're looking at it purely in terms of people rather than legal entities. The terms "control" and significant influence" have specific meanings in accounting-speak. The former means having greater than 50% of the shares and the latter between 20 & 50%.

<snip>

In the universe of accounting standards (and therefore FFP) they are not related parties and that's all that matters.

To quote Wolfgang Pauli, it's not even wrong.

I had to give one of your lot a slap for telling these same exact same lies a while back (I suspect you're the same person to be honest) - there's a thread on bluemoon where you all sit around deliberately confusing IAS and FFP to convince each other that everything is hunky dory that's acting as an echo chamber for bullshit, I'm just bored of dealing with it now.

Some of the FFP nomenclature is directly lifted from IAS and IVS, that much is true, but UEFA have added proprietary elements precisely to counter your behaviour.

Etihad, infact pretty much anything to do with Abu Dhabi is a related party to your club, you can get away with it at companies house, but not with UEFA.
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Re: Financial Fair Play - developments in here
« Reply #162 on: August 26, 2013, 03:45:42 am »
I think both Manc lads have been a good value actually. I'd rather read their posts than 90% of the crap that our supposed supporters post on here. Oh, and I like Gary Neville's punditry too.

There, I've said it ... Now let normal service resume.

Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #163 on: August 26, 2013, 10:07:37 am »
To quote Wolfgang Pauli, it's not even wrong.

I had to give one of your lot a slap for telling these same exact same lies a while back (I suspect you're the same person to be honest) - there's a thread on bluemoon where you all sit around deliberately confusing IAS and FFP to convince each other that everything is hunky dory that's acting as an echo chamber for bullshit, I'm just bored of dealing with it now.

Some of the FFP nomenclature is directly lifted from IAS and IVS, that much is true, but UEFA have added proprietary elements precisely to counter your behaviour.

Etihad, infact pretty much anything to do with Abu Dhabi is a related party to your club, you can get away with it at companies house, but not with UEFA.
I'm getting tired of this. The related party rules in FFP are, word-for-word, lifted from the standards. The only proprietary part as far as I can see is the requirement to assess fair value in such a transaction. And even that concept is rooted in the need for a reporting entity to demonstrate that a related party transaction took place at an equivalent value to an 'arm's length' transaction.

I'm not stupid enough to deny that virtually everything in Abu Dhabi links back to the ruling family. So, in that sense, there's a "relationship" between Etihad & City. But they aren't related parties under the meaning of IAS or FFP. Look at City's accounts and see if they report the deal with Etihad as a related party transaction in the notes. They don't and UEFA will apply exactly the same rules.

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Re: Financial Fair Play - developments in here
« Reply #164 on: August 26, 2013, 10:10:22 am »
I'm getting tired of this. The related party rules in FFP are, word-for-word, lifted from the standards. The only proprietary part as far as I can see is the requirement to assess fair value in such a transaction. And even that concept is rooted in the need for a reporting entity to demonstrate that a related party transaction took place at an equivalent value to an 'arm's length' transaction.

I'm not stupid enough to deny that virtually everything in Abu Dhabi links back to the ruling family. So, in that sense, there's a "relationship" between Etihad & City. But they aren't related parties under the meaning of IAS or FFP. Look at City's accounts and see if they report the deal with Etihad as a related party transaction in the notes. They don't and UEFA will apply exactly the same rules.

But basically you're saying: yes, we know we're in the wrong, doing all kinds of dodgy accounting - but because the letter of the law allows us to get away with it, who gives a shit? Loopholery isn't fooling anyone.
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Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #165 on: August 26, 2013, 11:13:03 am »
But basically you're saying: yes, we know we're in the wrong, doing all kinds of dodgy accounting - but because the letter of the law allows us to get away with it, who gives a shit? Loopholery isn't fooling anyone.
Basically I'm not saying that. I'm saying Abu Dhabi is using City to promote their airline Etihad, one of the world's fastest growing airlines, which a few years ago placed the then single biggest commercial aircraft order ever. Their competitor Emirates has become one of the world's top airlines, partly by virtue of massive sports sponsorship and brand awareness arising from that.

People ask whether we would have got that deal if we weren't owned by Sheikh Mansour, a question which entirely misses the point, which was that the purchase was specifically to promote Abu Dhabi. I would question whether Liverpool would ever have entertained the idea of a lacrosse kit manufacturer making and distributing their iconic kits if it wasn't for the pre-existing relationship with the owners.

Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #166 on: August 26, 2013, 11:23:46 am »
Basically I'm not saying that. I'm saying Abu Dhabi is using City to promote their airline Etihad, one of the world's fastest growing airlines, which a few years ago placed the then single biggest commercial aircraft order ever. Their competitor Emirates has become one of the world's top airlines, partly by virtue of massive sports sponsorship and brand awareness arising from that.

People ask whether we would have got that deal if we weren't owned by Sheikh Mansour, a question which entirely misses the point, which was that the purchase was specifically to promote Abu Dhabi. I would question whether Liverpool would ever have entertained the idea of a lacrosse kit manufacturer making and distributing their iconic kits if it wasn't for the pre-existing relationship with the owners.

I think you are massively missing the point here Blue, nobody is doubting that it is a good idea to sponsor City, what is in doubt is that they had to pay you the huge sums that they are doing, they could have sponsored you, or indeed a more successful and popular club, for a lot less.
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Offline robgomm

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Re: Financial Fair Play - developments in here
« Reply #167 on: August 26, 2013, 12:33:28 pm »
Etihad is owned by the UAE government, of which Sheikh Mansour is now deputy prime minister. And of course he's a member of the royal family. It's a conflict of interests without a shadow of a doubt.

Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #168 on: August 26, 2013, 12:53:01 pm »
I think you are massively missing the point here Blue, nobody is doubting that it is a good idea to sponsor City, what is in doubt is that they had to pay you the huge sums that they are doing, they could have sponsored you, or indeed a more successful and popular club, for a lot less.
A top four Premier League club is a pretty good vehicle to use for sponsorship wouldn't you say? We look like we're going to be a regular fixture in the CL (although we could do with getting out of the group stages I'll admit). The PL and CL are watched all round the world so unlike kit deals, which do directly rely on how popular a club is and how much merchandise gets shifted, the name on the shirt and stadium is more about exposure and increasing brand awareness.

I will say this if you want me to though. I don't know what the details of the Etihad deal are. The best figure I've heard is £350m over 10 years but I've no idea if that's right or if the deal has a performance-related structure. So it might be £30m a year basic with £5m add-ons if we meet certain targets but no one apart from the people at City and Etihad know for sure. So to talk about 'huge sums' when you have no idea of what those sums are is a bit silly.

If it's £30-35m a year then I'd say that it's fair value for the shirt, stadium and training campus naming rights. Arsenal are getting that for the shirt and stadium so no way could it be considered out of line. However if was it £50m or £100m a year then I'd accept it's excessive compared to other deals. But it still doesn't alter the fact that City and Etihad are not and will not be considered related parties for the purposes of FFP so if it was excessive then there would be some justification in seeing it as a (perfectly legal even if morally dubious) way of getting round FFP. But then City fans feel that FFP is a morally dubious way of the old guard trying to keep clubs like us at arm's length. And it's questionable if it's even legal under EU law. So all's fair in love and war as they say.

However, I'd stress again that our non-Abu Dhabi commercial income is probably around £70m a year and that Etihad and the other three Abu Dhabi companies contribute just over £40m in total. So I strongly doubt Etihad are paying us an excessive amount.
« Last Edit: August 26, 2013, 12:56:49 pm by ManchesterBlue »

Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #169 on: August 26, 2013, 01:27:05 pm »
Look Blue, there is no other way for me to say this without sounding like an arrogant condescending prick, so I apologise but

You're a small club.

There is no way you can expect to spend like Madrid and be self sustaining, no way mate.

When you signed a world record sponsorship deal (not 100% sure) for renaming a stadium (not even a new build) you hadn't won your domestic league for decades, FFS you hadn't even won a game in Europe for decades! Don't tell me that's a bit fishy

How can you expect to sign similar deals to Madrid, Barca, Munich and United? just because you're in the top 4? Do Dortmund attract similar deals to Munich? Did Spurs when they made top 4? no they didn't

Seriously mate, commercially you aren't at the top club's level, nowhere near in fact, but you spend like a top club, thats only possible because you get over-inflated deals, I don't know why you can't acknowledge this.
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Offline Nessy76

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Re: Financial Fair Play - developments in here
« Reply #170 on: August 26, 2013, 02:25:08 pm »
Well since no one picked up on this I'll C&P the entire article as I think the arguments are quite compelling.

I don't.

Quote
In his article Stefan Szymanski argues that FFP will ossify European football, and entrench those teams already at the top in such a manner it will bring in an era in which leagues are in fact de-facto 'closed' leagues as found in US sports.

Again, I disagree.

Quote
This will be the last year of European football as we know it. The “open” system by which the sport has long operated is now coming to an end, and will quickly become a “closed” American-style system.

This is all down to Financial Fair Play, the new regulatory system adopted by Uefa, European football’s governing body, which will bite next year. Instead of just tallying goals scored and conceded, fans will have to learn complicated rules about “break-even” and club licensing to work out who their opponents will be. Sporting merit will no longer be the sole criterion for success in competition.

That's moronic to begin with. The fixtures and draws will be made, as always, by UEFA. The list of teams taking part in European competitions will be widely available before the first draw is made. The basis for qualification will be identical to what it has been for the past two or three seasons, and essentially the same as it has been for decades. Teams will qualify based on their position in domestic leagues and cup competitions, with a small number of wild-card entries (1 I think) to the Europa League for "fair play". Unless you don't see fair play as "sporting merit" (a reasonable objection, but nothing has changed with regard to that rule) then that is, in fact, the sole criterion for success.

Fans don't need to learn anything new to work out who their opponents will be, they just need to look up the fixtures, as always.

Some teams could, in principle, be barred from competition for failing to comply with the rules. There's nothing new about that, either.

Quote
This will be a big change for European football, a defining facet of which has long been the notion that anyone, anywhere, can set up a club and, through the pyramid system of promotion and relegation, aspire to play in the Champions League. Not that this is very likely, but there is still much mobility. Of the 104 teams that played in the top four English divisions between 2001 and 2010, only 26 stayed in the same division for the decade; the same number played at three different levels; and two teams managed to play in all four.
But this openness has also caused financial chaos. The last time anyone said that English football’s finances were healthy was the 1950s, when the players’ pay was capped at £20 a week and less than half of the population had a television. The same is true across Europe, where many clubs have fallen into cycles of extravagant spending, temporary success followed by financial disaster, retrenchment, frequent changes of ownership and the injection of new money.

Apples and oranges. The make-up of the domestic leagues is completely unaffected by FFP. The writer of this is therefore clearly either talking out of his arse, or has some kind of agenda. Nothing in the FFP rules makes it impossible for a small club to get into European competition. They just need to be well-run. The majority of supporters would prefer to see their team succeed because their manager is gifted and they have been able to build a strong squad, not to see it handed on a plate by a sugar daddy, there's no sporting merit in that.

Quote
Uefa tells us that in 2011, 63 per cent of clubs in Europe’s top divisions were reporting an operating loss and 55 per cent reported a net loss overall; 38 per cent reported negative net equity, and 16 per cent of club accounts contained a qualification expressed by the auditors as to the financial viability of the company. This is despite the fact that club revenues have grown at an annual rate of 5.6 per cent in the past five years.

So Uefa’s controls require clubs to break even, or face sanctions that could include exclusion from their lucrative competitions. But the regulations are complex and offer opportunities for litigation by disgruntled clubs. The rules will lack credibility if too many big clubs fail to meet the criteria early on. Will they all be barred? And what of the biggest names? Would any self-respecting fan want Barcelona or Real Madrid excluded?

Would any self-respecting fan want Barcelona or Real Madrid to fold? Because that's what we're talking about here. Protecting the existance of football clubs. Ask a Rangers fan how much fun it's been for them lately.

Quote
Even so, this all brings Europe a little closer to the US, whose leading sports leagues have developed hugely successful championships based on a shifting bargain among franchise owners. Rules for sharing revenues and limiting player pay are designed to maintain a competitive balance between teams. Entry is strictly limited – buying into the National Football League or Major League Baseball will cost you upwards of $1bn today – and the rewards of this exclusivity are also huge. The leagues mostly give the fans what they want, and profit royally.

No it doesn't, quite the opposite. US sport is run on a franchise system, where rich people can buy a place at the table. That is exactly the sort of thing FFP is designed to prevent. If the Premier League was the MLS, then Sheik Mansour could have simply bought Tottenham and moved them up to Manchester. There is nothing in FFP that allows that kind of thing.

Quote
Europe is not there yet. Uefa has studiously denied that maintaining competitive balance between clubs is an object of FFP. Its plan, it says, is not to make sure that humble Crystal Palace has a chance to compete at the top of the English Premier League against Manchester United. And for good reason: the new rules are actually likely to ossify European competition and limit the potential for big clubs of today to be challenged.

Evidence?

Quote
Similar regulations are creeping in at national level. England’s Premier League now has a rule limiting wage bill rises to £4m a year for clubs already spending more than £52m. Of the league’s 20 clubs, 14 spend at or below this level, while the “big six” spend more than £100m – there are no plausible mechanisms for the smaller clubs ever to close this gap and compete.

Why does the author of this want clubs to go bust? Who in football actually enjoys watching a Coventry or a Portsmouth, a Rangers or a Chester City going to the wall? No fan who has seen their club get even close to such a situation could possiby see it as a good thing, so what's this guy's real agenda?

Quote
But such ossification is a first step to a closed system – for which there are advantages. Well-matched teams are usually more attractive to watch than David and Goliath contests, however much we like fairy tales. There is more chance to see the biggest stars play each other in a closed system, and more potential for investment, whether in player training, stadiums or broadcasting.

Idle speculation, based purely on completely spurious circular logic. Crap. Bullshit. Imaginary. Get a fucking grip.

Quote
But this is not football’s tradition. The open system of promotion and relegation has a romantic appeal,

FFP does not prevent promotion and relegation. Horse shit.

Quote
and makes for an intensity of competition US leagues sometimes lack. Moreover, financial chaos may have caused owners to lose money but almost never leads to the demise of clubs.

Really? Now you're just lying. Fuck you.

Quote
As a system, the open model has been stable and attractive largely because of the gyrations of the individual clubs. It also limits the capacity of wealthy owners to leach large profits out of the game: no one is safe from competition.

It is ironic that Uefa, and many of those who lobby on behalf of fans, see the US system as anathema but seem to be doing everything possible to ensure its adoption. The Premier League welcomed another American owner last month, bringing the total to six, all of whom understand the two systems very well and are fully committed to the new regulation. They, at least, know where they are heading.

Ah, now we get to the point. Little-Englander xenophobia. Them foreigners are trying to screw up our game.

Fuck you very much.
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Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #171 on: August 26, 2013, 02:45:04 pm »
Look Blue, there is no other way for me to say this without sounding like an arrogant condescending prick
No problem. You're a United fan so we know that's the default setting ;)

Did you know Nike are looking at pulling out of your kit deal because they've not made any money on the £23.5m a year they've been paying you and you're asking for even more? Or that Chevrolet quietly re-negotiated your mega-deal with them down because (a) the guy who did it exceeded his authority and (b) they are claiming you misrepresented the level of global brand recognition you claimed?

Even when we were utterly shite a few years ago, we were still in the Top 20 clubs in the Deloitte table. We get higher crowds than Liverpool and even if it wasn't Etihad's name on our shirt and stadium, we'd still have a higher revenue. I'll happily agree that we aren't as well supported in Indonesia and other such places as you, Liverpool and Arsenal but all those 650 million foreign fans of yours bring in jack-shit (less than a penny each) as your own accounts show. Do I even want us to have an "Official Noodle Partner", an "Official Savoury Snacks Partner" or an "Official Airline Partner" that doesn't even fly into or out of Manchester? At least Etihad do, as well as employing about 100 people locally.

At the end of the day, it took you and Liverpool years to establish your global appeal and it will take us the same, given we only started 5 years ago. But we're a leading team in the most watched sporting competition in the world and playing regularly in the CL. That isn't a "small club" by any reckoning.

But yet again you talk about a "world record stadium sponsorship deal" when no figures have ever been published. I've got some pretty decent contacts at City but I've got no real idea of the size of the deal or how it breaks down across the three areas.

Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #172 on: August 26, 2013, 03:01:54 pm »


At the end of the day, it took you and Liverpool years to establish your global appeal and it will take us the same, given we only started 5 years ago. But we're a leading team in the most watched sporting competition in the world and playing regularly in the CL. That isn't a "small club" by any reckoning.

But yet again you talk about a "world record stadium sponsorship deal" when no figures have ever been published. I've got some pretty decent contacts at City but I've got no real idea of the size of the deal or how it breaks down across the three areas.

Yes it's taken us years to build up our global appeal and you've just started 5 years ago, so tell me, how can you command similar sized deals?

Yes nobody knows the figures, but they've been reported as world record figures and must be huge because how else are you going to fund your extravagant spending?

Are these contacts the same ones that stated Ferguson left because of lack of transfer funds? If do take what they say with a dollop of salt mate.
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Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #173 on: August 26, 2013, 03:45:43 pm »
When you signed the huge sponsorship deal with Etihad, you hadn't even played a single game in the CL and your highest league finish was 3rd and you got more money than they did for renaming madison square gardens.

Arsenal signed a shirt and stadium sponsorship in 2004 with Emirates for much, much less, granted that was partly due to receiving the bulk of the money up front to pay for the stadium but it surely wouldn't drop it that much.

This was an Arsenal who had been CL stalwarts, reaching finals, winning Leagues unbeaten and winning doubles, they had just had the most successful period of their history and they banked £90 million over 15 years.

City banked a reported £400 million over 10 years for winning an FA cup, embarrassing themselves in the Europa league and just finishing 3rd once.

How can you, with a straight face, possibly say that your Etihad deal represents fair value? It isn't mate and I don't know why you can't acknowledge this. You'll still challenge for trophies, you'll still buy the top players in the world, why do you feel the need to legitimise how you fund it? Is it because otherwise it feels a bit hollow without respect?

Oh and regarding the restructuring of the Chevrolet deal, no i'm not aware of a renegotiation of the deal, can you back this up please because I think you're talking rubbish, and Nike considering pulling out of a deal with us because they are losing money? We're the jewel in their footballing crown and we make them a fortune, again utter tripe.
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Offline Phil M

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Re: Financial Fair Play - developments in here
« Reply #174 on: August 26, 2013, 03:47:06 pm »
Look Blue, there is no other way for me to say this without sounding like an arrogant condescending prick, so I apologise but

You're a small club.


Ooh that's gotta hurt.
It's true to say that if Shankly had told us to invade Poland we'd be queuing up 10 deep all the way from Anfield to the Pier Head.

Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #175 on: August 26, 2013, 04:11:57 pm »
Yes it's taken us years to build up our global appeal and you've just started 5 years ago, so tell me, how can you command similar sized deals?

Yes nobody knows the figures, but they've been reported as world record figures and must be huge because how else are you going to fund your extravagant spending?

Are these contacts the same ones that stated Ferguson left because of lack of transfer funds? If do take what they say with a dollop of salt mate.
Show me where it's been reported as a "world record deal" because I've never seen that.

And as for my source on your £30m transfer budget this summer, if only you knew...

Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #176 on: August 26, 2013, 05:34:29 pm »
Show me where it's been reported as a "world record deal" because I've never seen that.

And as for my source on your £30m transfer budget this summer, if only you knew...
Its been reported in numerous news outlets such as
http://www.theguardian.com/football/2011/jul/08/manchester-city-deal-etihad-airwaysand
http://www.independent.co.uk/sport/football/premier-league/uefa-to-investigate-manchester-city-over-etihad-sponsorship-deal-2338555.htmlthere are numerous others just google 'Etihad deal with Manchester City

Is this your source?

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Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #177 on: August 26, 2013, 05:54:37 pm »
The Guardian article is plain wrong as he's comparing the whole Etihad deal, which is for shirts, stadium and the training campus, against a deal solely for stadium naming rights. The story also says "up to £400m over 10 years". So if we won the PL and CL every year for 10 years we'd get something like £400m over that period. I think that would be quite reasonable if that were the case.

But we won't and as I've already said, the only solid information I've had indicates that it's performance related and probably in the region of £30-35m in a reasonable year.

Arsenal recently got £150m over 5 years from Emirates and our deal includes the training complex and surrounding facilities.

Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #178 on: August 26, 2013, 05:58:41 pm »
Nope, the emirates deal was for Stadium and shirts

No comment on how you got such a huge deal despite doing so little on the pitch?
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Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #179 on: August 26, 2013, 06:49:16 pm »
Nope, the emirates deal was for Stadium and shirts

No comment on how you got such a huge deal despite doing so little on the pitch?
We're just going round in circles. We did. It's foolproof. End of story

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Re: Financial Fair Play - developments in here
« Reply #180 on: January 29, 2014, 04:31:24 pm »
Rob Harris ‏@RobHarris 25m
Man City 2012-13 finances in: Net loss £51.6m - down from £97.9m - all debt paid off. Turnover £271m

Rob Harris ‏@RobHarris 23m
No mention by Man City - unlike Chelsea's confidence - that they will comply with UEFA financial fair play
 
Rob Harris ‏@RobHarris 22m
Man City loses over the last 2 years: £149.5m - pressure on UEFA to act re: financial fair play. Won't be booted out of Europe

Rob Harris ‏@RobHarris 19m
Not a single mention of "financial fair play" in Man City's 106-page annual report

Rob Harris ‏@RobHarris 16m
Man City burying bad news? financial results released hours before a match

Rob Harris ‏@RobHarris 3m
Man City's accounts - and those at some other clubs - will be a big test of UEFA's FFP rules and how tough they'll get on the big teams

Rob Harris ‏@RobHarris 2m
On the face of it - no. RT @PaulSarahs: @RobHarris Genuine question, Rob. Haven't City complied with FFP with these figures?

Rob Harris ‏@RobHarris 1m
What is surprising is City not even acknowledging FFP once in its annual report despite being so key to the club's ability to play in Europe

Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #181 on: January 29, 2014, 05:26:41 pm »
I've posted on the PSG thread about this but forgot to add that selected journalists were briefed on Monday night I believe and Ian Ladyman was one of them. Rob Harris (who is somewhat clueless about FFP) wasn't.

So see Ladyman's piece in The Mail for City's official view.

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Re: Financial Fair Play - developments in here
« Reply #182 on: January 29, 2014, 09:43:00 pm »
City made £47 million for the sale of "intellectual property" to "related parties" again.

Anyone shed any light on this? I heard New York City FC (also owned by the sheik) paid them £22 million to call the team "City"   ;D
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Offline rscanderlech

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Re: Financial Fair Play - developments in here
« Reply #183 on: January 29, 2014, 10:31:41 pm »
City made £47 million for the sale of "intellectual property" to "related parties" again.

Anyone shed any light on this? I heard New York City FC (also owned by the sheik) paid them £22 million to call the team "City"   ;D
Ahahahahahaha! £22m for 'City'? And this is entirely legal?

Offline rscanderlech

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Re: Financial Fair Play - developments in here
« Reply #184 on: January 29, 2014, 10:33:54 pm »
The Guardian article is plain wrong as he's comparing the whole Etihad deal, which is for shirts, stadium and the training campus, against a deal solely for stadium naming rights. The story also says "up to £400m over 10 years". So if we won the PL and CL every year for 10 years we'd get something like £400m over that period. I think that would be quite reasonable if that were the case.

But we won't and as I've already said, the only solid information I've had indicates that it's performance related and probably in the region of £30-35m in a reasonable year.

Arsenal recently got £150m over 5 years from Emirates and our deal includes the training complex and surrounding facilities.
That's not so bad then, maybe even perfectly reasonable. PSG's is just an insult and the two clubs should not be put in the same bracket.
« Last Edit: January 29, 2014, 11:35:19 pm by rscanderlech »

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Re: Financial Fair Play - developments in here
« Reply #185 on: January 29, 2014, 11:13:01 pm »
Details of Man City annual returns for the year according to the Guardian

I'm not sure how even the most blinkered Man City fan could look at these figures and think 'sustainable' or 'FFP here we come'.

http://www.theguardian.com/football/2014/jan/29/manchester-city-loss-wage-bill-income

Some highlights:

Manchester City have announced a loss of £52m for the year to 31 May 2013, a reduction from the £98m loss made by the club the previous year.

City's wage bill increased during 2012-13, to £233m

City's annual report reveals the extraordinary sums invested in the club by Sheikh Mansour bin Zayed al-Nahyan

Since he bought City in August 2008. In those five years, City have spent £712m on transfer fees alone, including last summer's £102m outlay on five new players.

City state their net spend, after money received from selling players between 2008 and 2013, was £582m.

The accounts show Sheikh Mansour had paid almost exactly £1bn into City since his 2008 takeover, including £190m last year.

Total losses made to 31 May 2013 were £559m,

The £52m loss is by far City's lowest of any year since the takeover, due to the £271m income. City's matchday and TV income were similar to 2011-12, but other commercial income, principally from sponsorship by the Abu Dhabi airline Etihad, and other Abu Dhabi and international sponsors, rose from £107m in 2011-12 to £143m. City's income also included £47m from selling "intellectual property", including £22m-worth to related City companies
[internal transfers?]

To sum up, the only way City can maintain their current side is through money transfers through proxy companies to the club from their owners. If this is not a blatant disregard for the spirit of FFP, I don't know what is.
« Last Edit: January 29, 2014, 11:14:34 pm by DonkeyWan »
Beatings will continue until morale improves...

Offline robgomm

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Re: Financial Fair Play - developments in here
« Reply #186 on: January 30, 2014, 12:28:12 am »
I'm not sure FFP has much spirit.

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Re: Financial Fair Play - developments in here
« Reply #187 on: January 30, 2014, 12:32:55 am »
City made £47 million for the sale of "intellectual property" to "related parties" again.

Anyone shed any light on this? I heard New York City FC (also owned by the sheik) paid them £22 million to call the team "City"   ;D
I can but I'm completely ratlegged so it'll have to wait until I've sobered up.

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Re: Financial Fair Play - developments in here
« Reply #188 on: January 30, 2014, 12:34:54 am »
City's figures, and more so their attempts to get past FFP, are utterly ridiculous. In fact, they are a fucking joke.

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Re: Financial Fair Play - developments in here
« Reply #189 on: January 30, 2014, 01:03:55 pm »
UEFA needs to penalise these cheats severely instead of selling clubs who compete fairly down the river.

Grow a spine UEFA.

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Re: Financial Fair Play - developments in here
« Reply #190 on: January 30, 2014, 01:38:14 pm »
Man City have "sold" their brand name rights to the clubs that THEY own in the US, Australia, and elsewhere, including to the Man City ladies team. If they need more revenue to satisfy FFP I'm sure their owners will just create more fictional sponsorship "deals" from their other ventures (Etihad being one of them).

Some call that clever accounting, I call that cheating the system. I hope UEFA cut down on loop-holes like this but I honestly can't see it happening.
« Last Edit: January 30, 2014, 01:40:18 pm by rickardinho1 »

Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #191 on: January 30, 2014, 02:26:55 pm »
Man City have "sold" their brand name rights to the clubs that THEY own in the US, Australia, and elsewhere, including to the Man City ladies team. If they need more revenue to satisfy FFP I'm sure their owners will just create more fictional sponsorship "deals" from their other ventures (Etihad being one of them).

Some call that clever accounting, I call that cheating the system. I hope UEFA cut down on loop-holes like this but I honestly can't see it happening.
You can call it what you like but at least get the story right. There are two elements to this. One involves selling the Manchester City brand rights to an unnamed third party and City actually did something like this once before in the late 1980's when they sold it to the guy running the souvenir shop. They then didn't actually have the rights to their own badge. Basically we've sold the rights to future income streams for royalties for a one-off payment, a bit like a sale-and-leaseback. This part is not a related party transaction as its been done outside the group. I thinks that's for £24.5m. It's no different to selling your training ground and leasing it back. You get a one-off payment and pay that back over time.

The other part is the sale of IP rights to databases and know-how (including the international scouting network) to a new company (which I think is called Manchester City Group Limited) that will control all the global franchises. The selling company has invested money and time into these services and is effectively cross-charging the other companies for using those services. The alternative was an annual charge or cost-transfer.

So if you own two companies and transfer a piece of plant from one to another then you'd be expected to show a fair-market value for that in your accounts, as it is a related party transaction. Both appear to be one-offs so are unlikely to be seen again.
These transactions are in addition to the £271m turnover by the way, not part of it.

You may not like it but these are entirely legitimate transactions and would have to be reported whether FFP was in force or not. Basically we've given up our rights to future income for an up-front payment. I'd guess it's almost certainly to do with FFP so not so much clever accounting than necessary business.

We did this with our club shop in 2006, selling it to a third party and leasing it back, when we needed money. In that case, we had to pay out money to lease it. In this case, we'll be giving up revenue.
« Last Edit: January 30, 2014, 02:40:49 pm by ManchesterBlue »

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Re: Financial Fair Play - developments in here
« Reply #192 on: January 30, 2014, 03:16:37 pm »
Some call that clever accounting, I call that cheating the system. I hope UEFA cut down on loop-holes like this but I honestly can't see it happening.

It's not a loop hole, it's against the rules and won't be counted towards the break even calculation.
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Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #193 on: January 30, 2014, 03:26:32 pm »
It's not a loop hole, it's against the rules and won't be counted towards the break even calculation.
You make these statements but never justify them. You've not responded to my challenge about IAS 24, which is something else you clearly don't understand. All you do is come out with ill-informed crap about subjects you clearly know nothing about.

If we've done a deal with a third party then it counts for FFP if it's football related. Full stop.
If we've done a deal with a related party then we have to state it hasn't been done at fair market value (and what that value should be) or prove it has if challenged.

How about constructing a rational, intelligent argument supported by facts instead of mouthing off and calling people names?

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Re: Financial Fair Play - developments in here
« Reply #194 on: January 30, 2014, 11:45:56 pm »


 I heard New York City FC (also owned by the sheik) paid them £22 million to call the team "City"   ;D

Teams like Bristol City should ask for a cut of that.
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Re: Financial Fair Play - developments in here
« Reply #195 on: January 31, 2014, 12:32:16 am »
You say FFP avoidance, we say FFP evasion. It is deliberate circumvention of the intent of the rules.

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Re: Financial Fair Play - developments in here
« Reply #196 on: January 31, 2014, 10:26:20 am »
What next? City to sell their tealady's intellectual property to Abu Dhabi for £80 million? ;D

Proof that they are nowhere near world leaders when it comes to sponsorship is the fact they have a Nike deal worth only £12 million a season. I'd like to know Blue's take on that, just why aren't City able to attract the top end of deals when it comes to companies not linked to Mansour?
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Re: Financial Fair Play - developments in here
« Reply #197 on: January 31, 2014, 11:32:15 am »
In simple terms it is just blatant cheating.  When they need cash to satisfy the books they just sell something pish to one of their "sponsors" for an over inflated amount of cash.

UEFA don't have the balls to clamp down on it tho. 

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Re: Financial Fair Play - developments in here
« Reply #198 on: January 31, 2014, 11:44:14 am »
You can call it what you like but at least get the story right. There are two elements to this. One involves selling the Manchester City brand rights to an unnamed third party and City actually did something like this once before in the late 1980's when they sold it to the guy running the souvenir shop. They then didn't actually have the rights to their own badge. Basically we've sold the rights to future income streams for royalties for a one-off payment, a bit like a sale-and-leaseback. This part is not a related party transaction as its been done outside the group. I thinks that's for £24.5m. It's no different to selling your training ground and leasing it back. You get a one-off payment and pay that back over time.

The other part is the sale of IP rights to databases and know-how (including the international scouting network) to a new company (which I think is called Manchester City Group Limited) that will control all the global franchises. The selling company has invested money and time into these services and is effectively cross-charging the other companies for using those services. The alternative was an annual charge or cost-transfer.

So if you own two companies and transfer a piece of plant from one to another then you'd be expected to show a fair-market value for that in your accounts, as it is a related party transaction. Both appear to be one-offs so are unlikely to be seen again.
These transactions are in addition to the £271m turnover by the way, not part of it.

You may not like it but these are entirely legitimate transactions and would have to be reported whether FFP was in force or not. Basically we've given up our rights to future income for an up-front payment. I'd guess it's almost certainly to do with FFP so not so much clever accounting than necessary business.

We did this with our club shop in 2006, selling it to a third party and leasing it back, when we needed money. In that case, we had to pay out money to lease it. In this case, we'll be giving up revenue.
MB, just like to get your thoughts on the pro's and con's of selling the IP/brand.

I'm guessing that should City be successful in the future or should I say the brand really takes off then that future revenue stream could be a lot more lucrative than the current market value?

Offline ManchesterBlue

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Re: Financial Fair Play - developments in here
« Reply #199 on: January 31, 2014, 01:55:20 pm »
MB, just like to get your thoughts on the pro's and con's of selling the IP/brand.

I'm guessing that should City be successful in the future or should I say the brand really takes off then that future revenue stream could be a lot more lucrative than the current market value?
That's entirely possible but it's impossible to say what basis the £24.5m has been prepared on. Normally you'd do a discounted cash flow calculation which looks at projected future cash flows from branding and applies a discount based on interest rates, inflation or other variables. In other words, how much is 20 years of cash inflows worth to me now? So that increase might have been built in to the calculation or it might not.

I'm sure that, given the legal and financial expertise available to Sheikh Mansour, we will have covered ourselves from an FFP perspective but I certainly understand the cynicism as it does all look a bit convenient and shabby. Last year's transaction made sense from a legal and administrative point of view but these appear to be a means to an end - meeting FFP - pure and simple. It almost takes me back to the days of 2005-2006 when we were totally skint and had to sell the building housing the club shop to a third party and Shaun Wright Phillips to Chelsea to keep us going. I'll argue when people are factually incorrect but I can't argue with the perception that things like this engender.

Looking at the accounts and taking out some of the variables (wages is said to include a big pay-off to Mancini and his staff) we aren't quite where I expected us to be at this stage by about £15m or so. The only bright spot is that, in this current financial year, we should actually achieve break-even and the CEO has pretty well confirmed that. I have no problem with cash being pumped in to fund infrastructure projects and that's going to be happening for a while now. The expansion of the stadium and development of the collar site around the stadium will bring in significant revenue in years to come so will pay for themselves. But I won't be happy until I see the football side of the club become self-sustaining.