[Albion] Associated Party Transactions (APT) ruling

[Gwylan]

Well, Man City did because they were the ones challenging the FA.

What about the other 19?

Yeah, fair enough. I think it's reasonable to wait for a PL response - my second point was unfair. Still puzzled by the first one though

 

[Bozza]

Yeah, fair enough. I think it's reasonable to wait for a PL response - my second point was unfair. Still puzzled by the first one though

Chelsea?

They've already illustrated they are willing to push the envelope in terms of accounting across a group of companies beyond the football club entity itself, so I'd guess they'd be happy to have greater flexibility to do that, even if they don't have the riches of a petro-state to call upon.

 

[trueblue]

Chelsea?

They've already illustrated they are willing to push the envelope in terms of accounting across a group of companies beyond the football club entity itself, so I'd guess they'd be happy to have greater flexibility to do that, even if they don't have the riches of a petro-state to call upon.

This. Seems Chelsea would rather sell things to themselves at inflated values than put money in directly through shareholder loans which is more transparent.

City seem to want everything to revolve around them with zero interest in the integrity of the competition as a whole. The ability to fund their bid for world domination through inflated deals, effectively pumping in their own money AND penalise owners who want to put money in directly.

I'm slightly puzzled about why the second is so important to them if, as they claim, they've won free rein to set up commercial deals however they like. Other than greed, obviously.

 

[Nobby Cybergoat]

I'm slightly puzzled about why the second is so important to them if, as they claim, they've won free rein to set up commercial deals however they like. Other than greed, obviously.

I sometimes wonder if there is a possibility that they are taking on the PL for the sake of taking on the PL. They have deeper pockets and the ability to fund eye watering legal costs for longer and they are hoping the PL are forced to settle on the more complex cases

 

[London Irish]

Long time since I've seen such wildy contrasting takes on a story by the media and social media

 

[Uh_huh_him]

I sometimes wonder if there is a possibility that they are taking on the PL for the sake of taking on the PL. They have deeper pockets and the ability to fund eye watering legal costs for longer and they are hoping the PL are forced to settle on the more complex cases

I don't think they are taking on the PL for the sake of it.
They are taking on the PL, because they are constraining them from doing whatever the hell they like.

The fact they have the deepest pockets and have some support from other clubs, could lead to either PL caving in, or another attempt at the Super League.

The "tyranny of teh majority" is always going to be a factor in the Premier League.
Particularly when it comes to the things City and Newcastle want to be doing.

 

[Gwylan]

Presumably that can't be retrospective though can it?

Citeh seem to think it has to be and is threatening more legal action against the PL if they don't introduce a restrospective element to shareholder loans. That is going to hit Brighton (unless infrastructure expenditure is excluded)

 

[Nobby Cybergoat]

One thing I don't get about this process, is that there were these clubs who were witness for City and clubs who were witness for the Premier League.

What were they witnessing? What is it they can have observed? This is surely just a procedure whereby City were testing some rules?

 

[trueblue]

I sometimes wonder if there is a possibility that they are taking on the PL for the sake of taking on the PL. They have deeper pockets and the ability to fund eye watering legal costs for longer and they are hoping the PL are forced to settle on the more complex cases

Absolutely. They seem to be saying to the other clubs pretty clearly, “come across to our side or it’ll cost you”. Given the Gulf States’ unlimited funds, you’d assume some will cave. I suppose we need to start looking at the commercial deals we can do at ridiculous values. Maybe the fish and chip van outside the north can pump in a couple of hundred a million a year for an advert on the big screen.

 

[Uh_huh_him]

Can someone explain to me why Fulham have only £1m in shareholder debt?

They were permitted £83m losses in the last PSR round and narrowly scraped through, but their losses were significcantly more with teh stand development.

Do they have normal debt to cover the shortfall, or does the owner just pay it off, but not register it as debt??

 

[AZ Gull]

Can someone explain to me why Fulham have only £1m in shareholder debt?

They were permitted £83m losses in the last PSR round and narrowly scraped through, but their losses were significcantly more with teh stand development.

Do they have normal debt to cover the shortfall, or does the owner just pay it off, but not register it as debt??

As per Swiss Ramble, £832m of owner debt has been converted into equity since 2012 (mostly from Khan but also previously by Al Fayed).

 

[Uh_huh_him]

As per Swiss Ramble, £832m of owner debt has been converted into equity since 2012 (mostly from Khan but also previously by Al Fayed).

So why can't City and Newcastle do this, and avoid all this APT shenanigans?

 

[AZ Gull]

So why can't City and Newcastle do this, and avoid all this APT shenanigans?

Neither City nor Newcastle have any shareholder debt.

 

[Uh_huh_him]

Neither City nor Newcastle have any shareholder debt.

Yeah sure - but instead of getting inflated Spomsorship deals, what's to stop them from just wracking up debt and the owner s loan the club the money to cover the losses?

 

[AZ Gull]

Yeah sure - but instead of getting inflated Spomsorship deals, what's to stop them from just wracking up debt and the owner s loan the club the money to cover the losses?

Under the current Premier League PSR rules, a PL club is permitted to have a maximum PSR loss of £105m over a three-year period (ie £35 per year, on average). However, that £105m figure INCLUDES a maximum of £90m coming from owner "secure funding" (which essentially means equity, ie buying more shares in the club, rather than loans). Without that owner equity investment the maximum allowable loss is only £15m.

So, there is a limit to how much secure funding an owner can put in to alleviate the PSR loss. That is why clubs look to inflate their revenue (such as through sponsorship deals) as much as possible - the higher the revenue, the lower the loss (or higher the profit).

 

[Uh_huh_him]

Under the current Premier League PSR rules, a PL club is permitted to have a maximum PSR loss of £105m over a three-year period (ie £35 per year, on average). However, that £105m figure INCLUDES a maximum of £90m coming from owner "secure funding" (which essentially means equity, ie buying more shares in the club, rather than loans). Without that owner equity investment the maximum allowable loss is only £15m.

So, there is a limit to how much secure funding an owner can put in to alleviate the PSR loss. That is why clubs look to inflate their revenue (such as through sponsorship deals) as much as possible - the higher the revenue, the lower the loss (or higher the profit).

Thanks that is really helpful.

 

[El Presidente]

A couple of things struck me: why did Chelsea support City's action? I'd have thought that the club, without the support of a state wealth fund to support it, but bolstered by shareholder investment is exactly the sort of club that will be hit by this judgment: what am I missing?

The other thing: I've not seen any statement from the Albion about how it will affect (or not affect) the club. I don't think any club has put out such a statement. Isn't that a bit strange,a full day after the ruling? I imagine all supporters will be wondering what this means for their club.

Chelsea’s unusual sponsor deal last year with Infinite Athlete for an estimated £40m, signed after the stsrt of the season (therefore not on the majority of shirts sold which tend to take place at launch) in a season where the club was not in Europe might raise eyebrows.

Infinite Athlete are a company only formed in 2021 yet two years later can afford a deal of this magnitude.

Chelsea also appear to have sold 2/3 properties and their women’s team to an associated party in 2024.

The above perhaps explains why Chelsea are supporting Manchester City.

If you Google Toad Boehly and Saudi Arabia you might see some links there too.

 

[El Presidente]

Under the current Premier League PSR rules, a PL club is permitted to have a maximum PSR loss of £105m over a three-year period (ie £35 per year, on average). However, that £105m figure INCLUDES a maximum of £90m coming from owner "secure funding" (which essentially means equity, ie buying more shares in the club, rather than loans). Without that owner equity investment the maximum allowable loss is only £15m.

So, there is a limit to how much secure funding an owner can put in to alleviate the PSR loss. That is why clubs look to inflate their revenue (such as through sponsorship deals) as much as possible - the higher the revenue, the lower the loss (or higher the profit).

The definition of secure funding is more broad than that.

Even though it explicitly says in the PL handbook that “secure funding may not be a loan” (section A.1.230) it does appear that an overdraft facility is not deemed to be a loan.

One very high profile club has taken advantage of this and has incurred substantial losses which are effectively covered by their £200m overdraft facility.

In the Premier League all clubs are equal but some clubs are more equal than others.

 

[Dick Knights Mumm]

I would like to see the wheels set in motion to kick City out of the League.

 

[El Presidente]

I would like to see the wheels set in motion to kick City out of the League.

Why though?

There is nothing fair about Financial Fair Play, there is no profitability or sustainability commitment in the Profitability and Sustainability rules.

I would like to see the wheels set in motion to kick City out of the League.