Super League and cheating by ManCity and PSG

[gary69]

Man City won part of its' case against PL regarding Associated Party Transaction (APT) rules.

So Man City can now sign more lucrative sponsorshp deals and be awarded compnsation from PL for lost income because they were not allowed to do these deals earlier.

From Fabrizio Romano: "

Rules deemed unlawful because they did not take into consideration interest-free loans from shareholders to clubs
Likely change in the regulations could lead to City striking more lucrative deals and seeking damages from the Premier League
Clubs with high levels of borrowing now in danger of breaching of Profitability and Sustainability Rules
Arsenal, City’s title rivals, have borrowing of more than £200million made up entirely of shareholder loans"

"Manchester City have inflicted a potentially damaging defeat on the Premier League after the rules governing commercial deals between clubs and related companies were declared unlawful.
In a landmark decision that could have huge ramifications for England’s top flight, it was ruled that City were unfairly blocked from agreeing two huge sponsorship deals earlier this year.
It opens the door for the English champions, majority-owned by Abu Dhabi, to strike significantly higher sponsorship agreements with associated parties than previously allowed — including with Etihad, their stadium and shirt sponsor — and to pursue compensation and costs from the Premier League for abusing its position. Other clubs could also now seek damages should they believe they have been impacted."

Even more interestingly shareholder loans must be paid back and be charged at market value interest, which could mean breach of sustainability rules for some clubs like Arsenal.

"The decision will spark huge concern among a number of City’s Premier League rivals — who rely heavily on such loans — and is likely to lead to the rules being changed.
The panel states that, of the £4billion in total borrowing across the Premier League, £1.5billion is in loans from club owners and shareholders. If the rules are altered and commercial loan rates are now applied to these interest-free loans and have to be included in a club’s profitability and sustainability calculation, many clubs could find they are in breach of Profitability and Sustainability Rules (PSR).
City had argued that such payments were unfair and not at market value because they were interest-free and, in some cases, did not have to be repaid at all. For a club such as Arsenal, with borrowing of more than £200million made up entirely of shareholder loans, that is a potentially seismic development."

PL has issued a statement on the verdict:

Premier League statement

 

[bluesfan94]

Man City won part of its' case against PL regarding Associated Party Transaction (APT) rules.

So Man City can now sign more lucrative sponsorshp deals and be awarded compnsation from PL for lost income because they were not allowed to do these deals earlier.

From Fabrizio Romano: "

Rules deemed unlawful because they did not take into consideration interest-free loans from shareholders to clubs
Likely change in the regulations could lead to City striking more lucrative deals and seeking damages from the Premier League
Clubs with high levels of borrowing now in danger of breaching of Profitability and Sustainability Rules
Arsenal, City’s title rivals, have borrowing of more than £200million made up entirely of shareholder loans"

"Manchester City have inflicted a potentially damaging defeat on the Premier League after the rules governing commercial deals between clubs and related companies were declared unlawful.
In a landmark decision that could have huge ramifications for England’s top flight, it was ruled that City were unfairly blocked from agreeing two huge sponsorship deals earlier this year.
It opens the door for the English champions, majority-owned by Abu Dhabi, to strike significantly higher sponsorship agreements with associated parties than previously allowed — including with Etihad, their stadium and shirt sponsor — and to pursue compensation and costs from the Premier League for abusing its position. Other clubs could also now seek damages should they believe they have been impacted."

Even more interestingly shareholder loans must be paid back and be charged at market value interest, which could mean breach of sustainability rules for some clubs like Arsenal.

"The decision will spark huge concern among a number of City’s Premier League rivals — who rely heavily on such loans — and is likely to lead to the rules being changed.
The panel states that, of the £4billion in total borrowing across the Premier League, £1.5billion is in loans from club owners and shareholders. If the rules are altered and commercial loan rates are now applied to these interest-free loans and have to be included in a club’s profitability and sustainability calculation, many clubs could find they are in breach of Profitability and Sustainability Rules (PSR).
City had argued that such payments were unfair and not at market value because they were interest-free and, in some cases, did not have to be repaid at all. For a club such as Arsenal, with borrowing of more than £200million made up entirely of shareholder loans, that is a potentially seismic development."

PL has issued a statement on the verdict:

Premier League statement

Fabrizio Romano doesn't know what the hell he's talking about. The downside of basing one's "analysis" on whatever PR a club source feeds you.

There are basically two actually ramifications here:
1) The burden of proof is on the EPL and not the club to demonstrate FMV of affiliate sponsorships. That likely means that City/Newcastle/*insert club here* can probably get a little more money out of their affiliate sponsorships.

2) The financing charges on shareholder loans will be considered losses and must be at FMV. Previously, shareholders could loan money to clubs with essentially no interest and there would be no loss. That's not the case anymore. Now there will have to be FMV for interest. That doesn't mean the whole value of the loan is on PSR. More importantly, if it actually be came an issue, those loans could just be converted to equity and would go away.

To be clear - don't mean to come after you for this, but when football reporters report on legal cases without (1) being lawyers and (2) reading the entire ruling (which, it's 175 pages and Fabs/others tweeted before the whole thing was available), it's more likely than not wrong/misunderstood.

 

[gary69]

The interesting question is what will happen regarding any amendments to rules, as they stiil need to be voted on amongst the clubs. Will be an interesting meeting.

 

[gary69]

Fabrizio Romano doesn't know what the hell he's talking about. The downside of basing one's "analysis" on whatever PR a club source feeds you.

There are basically two actually ramifications here:
1) The burden of proof is on the EPL and not the club to demonstrate FMV of affiliate sponsorships. That likely means that City/Newcastle/*insert club here* can probably get a little more money out of their affiliate sponsorships.

2) The financing charges on shareholder loans will be considered losses and must be at FMV. Previously, shareholders could loan money to clubs with essentially no interest and there would be no loss. That's not the case anymore. Now there will have to be FMV for interest. That doesn't mean the whole value of the loan is on PSR. More importantly, if it actually be came an issue, those loans could just be converted to equity and would go away.

To be clear - don't mean to come after you for this, but when football reporters report on legal cases without (1) being lawyers and (2) reading the entire ruling (which, it's 175 pages and Fabs/others tweeted before the whole thing was available), it's more likely than not wrong/misunderstood.

No problem, I took no offence from your post.

Can't be bothered to read the tribunal's ruling nor am I lawyer, so I just read what others have written and wait to see how & when the rules might actually be chanced.

 

[spintheblackcircle]

My .02, ManCity didn't win very much. What they won is that now the PL have to investigate the clubs who have been loaning themselves money. They still have dozens of charges pending.

 

[1865]

As a kid growing up in Nottingham in the 90's, you really *hated* Man Utd. They won everything and you either supported them (regardless of where you're from) or loathed them with every ounce of your being.

It's a weird time now because it's all so different with City. Them winning the league is met with such apathy because nobody really cares. Is it because it is all artificial? None of their success has been "earned" as such, it's just oil money thrown at the wall until it worked. There is a unanimous dislike across the other 91 of their obvious cheating, but you get the feeling people are OK with City winning the league every year because you don't really know any of their fans and at least it isn't Liverpool or United doing it again.

Nobody truly expects the PL to be able to prove these charges, City will keep throwing money at lawyers until it all goes away. They'll just keep punishing the Forests and Evertons of the world instead, like a man bullied at work who goes home and kicks his dog.

 

[Scandale du Jour]

My .02, ManCity didn't win very much. What they won is that now the PL have to investigate the clubs who have been loaning themselves money. They still have dozens of charges pending.

They won't be punished. Everton will lose 10 points instead.

 

[bluesfan94]

I think this lawsuit’s results makes it very likely that City gets the book thrown at them.