Should they reward them for financial irregularities

from Bluemoon

Good question. We don't really know what UEFA means by this but we know from Der Spiegel that they looked at all the Abu Dhabi sponsorships as part of their original investigation. The concept of applying the market or fair value test only applies if the sponsor is deemed to be a 'related party'. If not, they can pay whatever they want. So if John Wardle had been both chairman of JD Sports and City at the same time, any sponsorship from them would have to be at market value. However Sports Direct, assuming Ashley had not other rleationship with the club, could sponsor our shirts for whatever we agreed, even if that was double or treble what JD Sports had paid. No market value test is applied to non-related parties.

UEFA claimed these companies were 'related parties' but that the Etihad deal would be deemed fair value. However it said that other Abu Dhabi deals weren't. We contested that but it was never tested in court and we voluntarily agreed not to increase those. I think Aabar was ultimately owned by a company chaired by Sheikh Mansour, although that's not enough in itself to prove conclusively that Aabar is definitely a related party. So even if we fully accpeted what UEFA had said (which we didn't) we'd have had to reduce two lesser sponsorships by about £10m or thereabouts, which would have made little impact in the overall scheme of things and certainly wouldn't have led to any further punishment than we actually received.

But I assume at the time UEFA weren't aware that Etihad and the other companies weren't paying the full amount of those sponsorships (although they should have known as that information about Etihad was already in the public domain as part of the Open Skies case in the USA courts). What they seem to punishing us for now is that we used those sponsorships to funnel ADUG money into the club. But if it's not a related party, as we claimed, then that's outside the FFP rules if that's the case. But it entirely depends on who paid the money. If it was the Executive Council, as as the case in the document filed in the New York courts, then that's a completely different matter to the money coming directly from ADUG. There's an email between Simon Pearce & Ferran Soriano where soriano asks Pearce to ask someone called Muhamad (not HH Sheikh Mohammed bin Zayed as they'd never refer to him in that way) to split the remittances into those from Etihad and the other sponsors (which are revenue) from those coming directly from ADUG as equity investment. We don't know exactly who Muhamad is but I'm assuming he's someone in finance at ADUG.

You could read this two ways. One one hand, it's very sensible and allows us to show the monies from sponsors as separate amounts from the monies for, say the CFA build or to cover transfers. Etiahd and the other parties could have sent the money to ADUG, even if some of that was sourced from ADEC (the Executive Council). On the other hand, it could be interpreted as showing that ADUG just paid us a flat remittance that incorporated all the income we needed and got whatever was due from Etihad (£8m out of the full sponsorship, whatever that was, £40m or £50m).

Der Spiegel never published anything that conclusively proved that latter scenario though although it was clear Etiahd wasn't paying the full sponsorhip out of its own pocket. There were references to 'His Highness' which was taken by Der Spiegel and other jounralists to mean Sheikh Mansour but that wasn't correct. As I said, 'HH' without qualification would be Mohammed bin Zayed and there's absolutely no way someone like someone like Simon Pearce would get something like that wrong or allow someone else to. I'm told by someone who should know that it's even quite a serious breach of protocol. This is quite important as it shows that MBZ, rather than ADUG/Sheikh Mansour, was arranging the money.

In summary, if Etihad is deemed a related party by UEFA but also that the sponsorship represents market value, then there should be no issue, regardless of how the money was sourced. Even if the other companies were deemed related parties and their sponsorships weren't deemed market value, at worst we'd have knocked our revenue down a bit and we'd have failed FFP by £10m more, which isn't significant and doesn't justify the new investigation in my view. Particularly as the 2014 settlement had already been over this ground. So we can assume it's not about that per se therefore.

The most likely explanation is that UEFA is accusing us of hiding the fact that the sponsorships weren't fully funded by the companies involved, which it didn't know in 2014 (but the information was there, in the public domain so you could argue that it was a known fact that Etihad weren't responsible for the full funding of our sponsorship). But if they were related parties, as claimed by UEFA seemingly, then as I said above, it doesn't matter.

If they weren't related parties, which we and our auditors claim, then it's potentially more of a case. I said at the time that it would have been the clever move to accept that they were related. But UEFA would need to prove that the money came directly from ADUG and not from other sources within Abu Dhabi, which is why the definition of 'HH' is is quite crucial. If Etihad paid us £50m in one or more remittances and all but the reported £8m came direct from ADUG then we'd possibly have a problem, although it's far from certain. If however Etihad paid that full money to ADUG and it was sourced from somewhere else other than ADUG then it's none of their business.

What would land us in the **** is if UEFA could see separately identified remittances of £8m from Etihad and £42m from ADUG both booked as commercial income under the Etihad sponsorship arrangement. But if that was the case, they'd have seen that at the time of the 2014 investigation presumably.

seems balanced to me

A team that can't fill it's own stadium, nor attract unconnected sponsors, uses money from unelected nation state dictators to play real life fantasy football then hires squads of expensive lawyers to argue that its all unfair

City's average attendance in the Premier League is 54,391 with a capacity of 55,097. That's the 5th highest in the league behind United, Arsenal, West Ham and Tottenham. Man City sponsors : https://www.mancity.com/fans-and-community/club/partners/global. No breach of ownership rules, that I know of. Don't most clubs play Fantasy Football in a way?

The Chinese deal in 2015 valued the club at $3bn, the American deal in 2019 valued it at $3.7bn.

if they hadn't lied an held their hands up they would have only got a one year
it was their grubby lying and non cooperation that peed UEFA off
didnt they get fined £50M previously

The previous fine was refunded.

Probably an Estate Agent

I doubt it, prices can go up or down.

you need to cooperate with governing bodies whether you feel hard dime by or not

the arrogance of the owners that they could just ignore UEFA off is incredible

no one is a fan of these governing bodies but they have the power

They continue to make operating losses whilst net profit can only be described as break even.

Man City P&L	2019	2018	2017
Revenue	535	500	473
Operating Profit	(22)	(22)	(30)
Profit after Tax	10	10	1
Profit %	1.9%	2.0%	0.2%

Both Real and Barca negotiate their own tv deals. Nothing said.

Real Madrid and Barce do not negotiate their own TV deals anymore, its moved towards collective revenue sharing albeit isn't quite that as it's still in their favour as some of the money is split towards social influence (ie. the big teams), but it's nothing like it was 10 years ago either.

The final numbers are in for the 2017/18 season and Barcelona pocketed €154M ($176M) and Real Madrid €148M ($169M) from a total TV pool of €1.33B ($1.52B).

It was a record for both teams but the wealth was spread throughout the league. Sixteen other teams also received record payouts with only Valencia and Malaga failing to beat their previous highs.  Even then, the differences were minuscule – Valencia missed by €1M and Malaga by €2M.

Rights fees distributed to La Liga teams have grown by more than 80% since 2013/14 (€734M), the last season before a form of a centralized model of selling was adopted.

A centralized model was legislated by a 2015 Royal decree and required implementation for the 2016/17 season. 2015/16 saw a hybrid model implemented as a stepping stone to full implementation.

Prior to the decree, La Liga teams sold rights on an individual basis. Barcelona and Real Madrid siphoned off a large percentage of the rights (combo of 38% in 2014/15). This percentage has now dropped to 23%. However, the pie has grown larger and so Barcelona and Real Madrid are banking more money than ever before.

As part of the transition to centralized selling Barcelona and Real Madrid were guaranteed that neither team would receive less than they did through the old system. Both teams have now exceeded the grandfathered amounts.

The centralized model has been a great success. Teams finishing at the bottom end of La Liga are receiving over €40M each – in 2014/15 it was closer to €18M.

Teams finishing higher in the table have also benefited greatly. Atletico Madrid (€111M up from €42M, +163%) and Sevilla (€74M up from €35, +111%) are two prime examples.

The distribution is based on several aspects and different leagues assign different weights to such factors as finishing position, performance over several seasons, attendance and others.

Based on the 2017/18 distribution, the ratio between the highest earning team and the lowest earning team in La Liga is 1:3.6. Serie A is generally at the higher end of the scale – around 1:4.5 while Ligue 1 is usually close to La Liga’s ratio.

The Bundesliga ratio has run at around 1:3.4 while the Premier League ratio of 1:1.6 makes the English top flight the most equitable by far.

The Premier League continues to outstrip the other leagues as far as revenue generation is concerned. In 2017/18, the Premier League distributed more than double the La Liga amount - €2.7B ($3.1B).

The top-earning team, Manchester United, received €167.8M ($191m) while West Brom, the bottom team banked €106M ($120.9M).

Both leagues are now in the final year of three-year rights deals and a new cycle starts with the 2019/20 season. The Premier League’s domestic TV rights for 2019/20 are close to par with present earnings while the final value for overseas rights has still to be announced.

La Liga is expecting an increase in rights fees of around 20% starting in 2019/20.

"In light of the Der Spiegel revelations, the manner in which FFP is applied would now appear to be more susceptible to a challenge alleging a breach of EU Competition law. As noted above, it is a weak legal argument which is founded on press reports. This article does not place any reliance on the alleged concerted actions by PSG and Manchester City to deliberately circumvent FFP, or the alleged collusion between UEFA officials and certain clubs to reduce CFCB sanctions. The relevance of the Der Spiegel revelations to this article is simply that they have unquestionably introduced real concerns about the transparency and fairness with which sanctions are applied and that this, combined with the lack of any clear guidance as to when a Settlement Agreement will be offered, could affect a future consideration of FFP’s compliance with EU Competition law."