Zidane and Moomba's FFP chat.

[Zidane98]

BDO said they were not related party transactions according to the International Accounting Standard.

I'm willing to be that that his highness didn't disclose to BDO that he was funding those companies.

 

[moomba]

What I an saying is that a sponsorship deal shouldn't be linked to a state owned Abu Dhabi enterprise investing in that company. The fact that Mansour has control over the club and the state owned investment company suggests a strong case that Nexen too is a related part.

Does he have control over Nexen though?

That's the only important issue as far as related parties go. By your definition, Real Madrid for example would be considered a related party. Probably Liverpool too if you dig far enough.

 

[moomba]

I'm willing to be that that his highness didn't disclose to BDO that he was funding those companies.

He wasn't being audited so I'm guessing he didn't.

TBH I don't know whether knowledge of the leaks would have changed anything with BDO. It may well have.

They're not going to be too bothered about FFP so I guess their concern would be more about whether the terms of the deal were being fulfilled (regardless of who funded it) and whether or not the deal was a related party transaction according to IAS24.

If it's ultimately found to not be a related party transaction I could see UEFA re-writing their regs to stop such a thing from happening again.

 

[moomba]

 

[chef]

It absolutely is. There is a good article floating around by some academic saying that not only does FFP give an inaccurate picture of a clubs financial health but it is also very easily manipulated.

I'll try to find it.

[Edit]

Here it is

https://news.liverpool.ac.uk/2017/09/05/financial-fair-play-foul-play-sour-grapes/



Some interesting stuff in the article, both pro and against City/FFP.

FFP really is pointless with City showing the ease it is to get around and how easy a clubs books can be manipulated.

 

[Zidane98]

He wasn't being audited so I'm guessing he didn't.

TBH I don't know whether knowledge of the leaks would have changed anything with BDO. It may well have.

They're not going to be too bothered about FFP so I guess their concern would be more about whether the terms of the deal were being fulfilled (regardless of who funded it) and whether or not the deal was a related party transaction according to IAS24.

If it's ultimately found to not be a related party transaction I could see UEFA re-writing their regs to stop such a thing from happening again.

IAS24 states that if Mansour has significant influence over the company it is a RPT. Financing a company would be seen as significant influence to any reasonable person IMO. Of course that wasn't disclosed to the auditors or the6 were paid off to not disclose it.

 

[Zidane98]

Does he have control over Nexen though?

That's the only important issue as far as related parties go. By your definition, Real Madrid for example would be considered a related party. Probably Liverpool too if you dig far enough.

RM not related, directors of club not the same as the companies sponsoring them. Normal commercial transaction.

 

[moomba]

RM not related, directors of club not the same as the companies sponsoring them. Normal commercial transaction.

Same as Nexen.

 

[moomba]

IAS24 states that if Mansour has significant influence over the company it is a RPT. Financing a company would be seen as significant influence to any reasonable person IMO. Of course that wasn't disclosed to the auditors or the6 were paid off to not disclose it.

I suspect it would take a.court to decide for sure. It's not really cut and dry, and while I think think it's still probably not a related party transaction acccording to the letter of the law, I can see how others think differently and they might be right.

At this stage we still don't know a lot of detail about who exactly paid who and how much. And what were the terms and conditions of those payments.

I imagine looking at how Aabar/Etisalat etc raised the funds for the sponsorship would have been outside of BDOs scope.

 

[Zidane98]

I suspect it would take a.court to decide for sure. It's not really cut and dry, and while I think think it's still probably not a related party transaction acccording to the letter of the law, I can see how others think differently and they might be right.

At this stage we still don't know a lot of detail about who exactly paid who and how much. And what were the terms and conditions of those payments.

I imagine looking at how Aabar/Etisalat etc raised the funds for the sponsorship would have been outside of BDOs scope.

What's there to discuss? Any common shareholder and director who has a significant impact over a company results in those two parties being considered as related parties.

How can you honestly claim Sheikh Mansour funding companies to pay sponsorship deals to the same football club doesn't fall under that definition? Obviously BDO & UEFA were not aware of what was going on in the background but are now which should result in nearly all sponsors being considered as related parties.

UEFA are apparently reopening an investigation which should not take too long if what was released is true.

 

[moomba]

What's there to discuss? Any common shareholder and director who has a significant impact over a company results in those two parties being considered as related parties.

How can you honestly claim Sheikh Mansour funding companies to pay sponsorship deals to the same football club doesn't fall under that definition? Obviously BDO & UEFA were not aware of what was going on in the background but are now which should result in nearly all sponsors being considered as related parties.

UEFA are apparently reopening an investigation which should not take too long if what was released is true.

I don't think there are any common directors or shareholders between club and sponsor but could be wrong. You could be right, and they are now considered related parties. But from what I've read/heard I don't think they are.

As for that, and as for a UEFA Investigation we can only wait and see. Like I said before I hope it does happen, but suspect it won't.

 

[Nobu]

City are a dodgy football club? Never saw that one coming

 

[ADL9798]

"the perceived message became: "We believe FFP is illegal, but we'll go along with it, cooking the books if necessary because ultimately it benefits us in the long run.""

This is what irritates fans of other clubs.

Debate the merits of FFP and challenge it in principle, sure. There's certainly a strong argument to be made.

But I doubt any clubs across Europe would have signed off on FFP rules in the first instance if they'd known their competitors would [allegedly] so flagrantly cheat them, and further that they'd get away with a slap on the wrist for all intents and purposes.

 

[moomba]

My preference was always to fight it in the courts. Missing out on champions league for a few years wouldn't have bothered me in the slightest and I think the cost of doing that wouldn't have been nearly as much as Marcotti says.

 

[Magma]

cl ban would mean more sleep for me. i ******* love sleep.

 

[Shoei]

Clubs are always going to try to bend the rules and be dodgy.

Blame UEFA for a poorly thought out and implemented shitshow of a policy. Then blame UEFA again for knowing that their shitty policy can't be properly enforced leading to pathetic punishments and "agreements" with those clubs taking the piss.

Scrap it all and start again.

 

[Zidane98]

My preference was always to fight it in the courts. Missing out on champions league for a few years wouldn't have bothered me in the slightest and I think the cost of doing that wouldn't have been nearly as much as Marcotti says.

Taking it to court is a hollow threat, the only avenue of appeal is CAS for a club.

Not playing in the CL might not bother you but would bother your owners who want Abu Dhabi on display in Europe. It would also affect your ability to sign players even with unlimited resources you have to call on.

No club will be challenging FFP in court. The best any club could hope for is to challenge any FFP penalty in the CAS.

 

[WealstoneRaider]

It’s a total mess. I’m sure City would have eventually got success had they played by the rules, and people like me would actually have been ok with it considering they were a club I always had a soft spot for anyway. At this point I’d rather see anyone take them down outside of arsenal - and that might even include Chelsea, such is my disdain for what they have done

 

[moomba]

Would be an interesting sliding doors.

I could see it as having an enormous impact on us.

Reckon it would have set us back at least five years in terms of building a squad capable of qualifying for the champions league, and that would have had a significant financial cost in terms of lost revenue from not playing in the champions league (£200m over the five years) and also increased wages to retain players without the lure of being a club at the top.

I'd imagine the likes of Silva, Kompany etc would have moved on to bigger and better things. Aguero would almost certainly never have arrived.

I think by now we would be working up towards the top, but probably still waiting for our first title under the new ownership.

So a real setback, which some would say was exactly what FFP was designed for.

 

[ADL9798]

Would be an interesting sliding doors.

I could see it as having an enormous impact on us.

Reckon it would have set us back at least five years in terms of building a squad capable of qualifying for the champions league, and that would have had a significant financial cost in terms of lost revenue from not playing in the champions league (£200m over the five years) and also increased wages to retain players without the lure of being a club at the top.

I'd imagine the likes of Silva, Kompany etc would have moved on to bigger and better things. Aguero would almost certainly never have arrived.

I think by now we would be working up towards the top, but probably still waiting for our first title under the new ownership.

So a real setback, which some would say was exactly what FFP was designed for.

Depends on your perspective.

City going from perennially finishing in the bottom half of the table to winning the title in 3 years is the optimal outcome for City supporters, but not necessarily for the entire competition.

Wouldn't have been the end of the world for the club if it had taken you another 5 years to get to where you are, and at least you would have done so playing by the same rules as everyone else, so that success wouldn't come with the asterisk that now sits next to every piece of silverware you've won under Mansour et al.

 

[Zidane98]

Would be an interesting sliding doors.

I could see it as having an enormous impact on us.

Reckon it would have set us back at least five years in terms of building a squad capable of qualifying for the champions league, and that would have had a significant financial cost in terms of lost revenue from not playing in the champions league (£200m over the five years) and also increased wages to retain players without the lure of being a club at the top.

I'd imagine the likes of Silva, Kompany etc would have moved on to bigger and better things. Aguero would almost certainly never have arrived.

I think by now we would be working up towards the top, but probably still waiting for our first title under the new ownership.

So a real setback, which some would say was exactly what FFP was designed for.

So cheating is ok if you end up with trophies. Interesting logic.

At the end of the day FFP allowed unlimited spending on infrastructure & youth. It also allowed reasonable losses to be incurred.

There's a good reason why state based funding of companies is banned in the EU marketplace. It creates an unfair balance of power.

But it seems you've made up your mind that you'll forgive everything all for a few trophies.

 

[moomba]

So cheating is ok if you end up with trophies. Interesting logic.

I didn't say it was ok or not ok.

 

[moomba]

Wouldn't have been the end of the world for the club if it had taken you another 5 years to get to where you are, and at least you would have done so playing by the same rules as everyone else, so that success wouldn't come with the asterisk that now sits next to every piece of silverware you've won under Mansour et al.

It is what it is.

If people want to put an asterisk next to our trophies that's fine.

 

[jd2010]

Whether there's an asterix or not won't change things for City fans. Just like it won't for Storm fans and they were actually stripped of their premierships. Does discussion after the fact take anything away from the pure joy of the Aguero goal?

 

[Nobu]

Whether there's an asterix or not won't change things for City fans. Just like it won't for Storm fans and they were actually stripped of their premierships. Does discussion after the fact take anything away from the pure joy of the Aguero goal?

There are definitely more admirable ways of winning trophies though. You’ve got Leicester’s fairytale on one end of the spectrum, then at the complete opposite end you’ve got City winning the league by circumventing financial fair play rules.

Give me one Leicester title over everything City have achieved since their takeover.