Football Finance

[Beamrider]

Is this something that has been looked into I wonder amongst those 115 charges?

I expect so. The paying of salaries off-book was part of the football leaks information / Der Speigel investigation which, since City haven't complied with the PL's requests, forms the basis on which the charges were made.

EDIT
14 of the charges relate to "Failure to provide accurate financial reports for player and manager compensation from 2009/10 to and including 2017/18". So clearly in scope. It's also likely that, if found guilty under those charges, further years would be investigated as they're probably still at it even now.

 

[the count]

Is this something that has been looked into I wonder amongst those 115 charges?

Not sure mate. @Beamrider is your man for the fine details.
I suspect that whatever they are doing doesn't break premier League rules but the inland revenue might want a word at some point

 

[Beamrider]

Not sure mate. @Beamrider is your man for the fine details.
I suspect that whatever they are doing doesn't break premier League rules but the inland revenue might want a word at some point

If they're not including everything they're paying the players for in their accounts, they're breaking PL rules. And if they're not declaring anything they've hidden from the PL to HMRC then they're breaking tax laws too. I would not be surprised if HMRC has already dealt with matters, but they wouldn't be entitled to share info with the PL.

 

[YNWA]

Ours was £373m in 2023. Bear in mind that was a poor year on the pitch, but with Mo's new deal. As long as media income keeps rising, wages will follow.

A few thoughts/reasons why I think absolute wages might grow however at a much lower rate than historically observed. a) domestic media income has stagnated over the last couple of cycles b) on the other hand international rights deals have taken off and I wonder how much more room for growth do they have c) in 2023 we played CL so bonuses would be built into the 373 figure d) my original point about a number of high earners going off the wage bill e) EPL planning to align its sustainability rules to that of UEFA i.e. wage to turnover ratio.

 

[the count]

If they're not including everything they're paying the players for in their accounts, they're breaking PL rules. And if they're not declaring anything they've hidden from the PL to HMRC then they're breaking tax laws too. I would not be surprised if HMRC has already dealt with matters, but they wouldn't be entitled to share info with the PL.

Say that the players were doing outside work that even though it wasn't officially for the club it was with an associated company in the gulf and it significantly increased their income would that merit investigation by either the league or revenue?

 

[Brizzle]

Say that the players were doing outside work that even though it wasn't officially for the club it was with an associated company in the gulf and it significantly increased their income would that merit investigation by either the league or revenue?

Do we know that the players/staff weren't declaring the income? Let's say Mancini was being paid half his total comp by an associated party... we don't know that he didn't actually declare that to HMRC and pay tax etc. We just know that MCFC didn't declare his total comp. Is that right?

 

[Beamrider]

Say that the players were doing outside work that even though it wasn't officially for the club it was with an associated company in the gulf and it significantly increased their income would that merit investigation by either the league or revenue?

The allegation is that City moved their image rights costs off book. To explain:
Players will basically get paid two types of remuneration.
Firstly, salary and bonuses. These are subject to PAYE (payroll tax at source) and are paid for playing football. These amounts have to be paid by the club. If any part of them is paid by a third party it is, de facto, third party ownership within FIFA's rules - ie banned. By definition, the player would be paid by, and therefore could be influenced by, a third party. and that's an absolute no no.
Second part is image rights. Vast majority of players will have transferred their image rights to a company and the club will pay a fee to the company for them, which then enables the club to require the players to do stuff for sponsors etc, which in turn drives the value of sponsorship deals up. Provided the fee falls within limits accepted by HMRC there is no PAYE and, importantly, no social security for either the club or the player - so more tax efficient. Depending on where the image rights company is based, it will pay tax on the income, but at a lower rate.
The allegation against Ciry is that they moved the image rights payments into a separate company, thus reducing their overall wage bill in the club's books (probably by about 15%). To be clear, that would be allowed under both football and tax rules - nothing illegal. But there's a problem. Because it would mean City didn't have the right to get their players to do commercial appearances, meaning their (already hugely overpriced) sponsorship deals would be worth fuck all. If they wanted to deliver player appearances, they would have to pay a fee to the company that held the image rights, and then their profits turn into the losses they should have reported in the first place because the fees drag them back down. And they had no plans whatsoever to do that. So the whole scheme fails because it is a lie. You've stopped paying your gym fees but you still workout twice a day and use the sauna. Nope, not buying that one lads.

 

[StevieM]

If they're not including everything they're paying the players for in their accounts, they're breaking PL rules. And if they're not declaring anything they've hidden from the PL to HMRC then they're breaking tax laws too. I would not be surprised if HMRC has already dealt with matters, but they wouldn't be entitled to share info with the PL.

Did they not have some scheme around “image rights payments” where they sold them to another company (therefore adding in revenue for the company from the sale). The “other company” was then responsible for paying that component of the salary.

Turns out the other company was bankrolled by City’s owners.

Man City: Where along the line will they take a long, hard look at themselves | All Football

 

[Beamrider]

Do we know that the players/staff weren't declaring the income? Let's say Mancini was being paid half his total comp by an associated party... we don't know that he didn't actually declare that to HMRC and pay tax etc. We just know that MCFC didn't declare his total comp. Is that right?

This is correct.
However, there's a chance it might not have been declared because players' advisers tend to rely on clubs confirming their income so they can file tax returns (most players have no clue how much they are due and where it comes from). Not all players mind, I know of a few who knew to the last penny what they were due.
Point is they might make that request to a low-ranking person in payroll / finance who knew nothing of the arrangement, didn't provide the information, so it wasn't declared. Unless the adviser went through all the bank accounts, they could have missed this and, innocently (although arguably negligently), failed to declare it.

 

[Beamrider]

Did they not have some scheme around “image rights payments” where they sold them to another company (therefore adding in revenue for the company from the sale). The “other company” was then responsible for paying that component of the salary.

Turns out the other company was bankrolled by City’s owners.

Man City: Where along the line will they take a long, hard look at themselves | All Football

Think we crossed in the post...

 

[Beamrider]

A few thoughts/reasons why I think absolute wages might grow however at a much lower rate than historically observed. a) domestic media income has stagnated over the last couple of cycles b) on the other hand international rights deals have taken off and I wonder how much more room for growth do they have c) in 2023 we played CL so bonuses would be built into the 373 figure d) my original point about a number of high earners going off the wage bill e) EPL planning to align its sustainability rules to that of UEFA i.e. wage to turnover ratio.

This is all valid, but if income is going up (let's not forget the bonanza of the FIFA club world cup and commercial deals on top of the more static media income) then agents will drive the wages up. It's why football clubs at the very top rarely make money. I don't see that changing any time soon, even though it should for all the reasons you highlight.
And if someone else can afford to pay Player X £20m a year, then we won't sign him unless we do too. It's basic supply and demand.
I think we may see more of a shift towards players running their contracts down to boost their earnings at their next club (Mbappe being the most high profile to date, but Ballack basically did that his whole career).
And then we don't know what happens if the Saudi bubble doesn't burst.

 

[StevieM]

Think we crossed in the post...

Yeah… but as always, your explanation was clearer and better.

Interesting though, that the people behind Frodham (the company that bought the player rights), the Rowlands (Jonathon & David) are also Tory Party donors.

That feeds my conspiracy theory side that says the Government will make sure City’s owners aren’t embarrassed - even if there’s a change in government.

 

[StevieM]

If anyone wants to go down a City Financial rabbit hole - just Google “Project Longbow City” and off you go…

 

[Beamrider]

Yeah… but as always, your explanation was clearer and better.

Interesting though, that the people behind Frodham (the company that bought the player rights), the Rowlands (Jonathon & David) are also Tory Party donors.

That feeds my conspiracy theory side that says the Government will make sure City’s owners aren’t embarrassed - even if there’s a change in government.

I kind of hope a Labour administration will be happy to hang Tory donors out to dry. But if these guys start donating to Labour then we need to get David Conn at the Guardian to kick up a fuss. He's the only journo I'd trust to do it and a guy who deserves a lot of respect for the way he supported the Hillsborough families by telling their story when no-one wanted to hear it.

 

[Beamrider]

I found a useful summary of City's charges:

Failure to provide accurate and up to date financial information - 54 charges covering 2009 - 2018.
Failure to provide accurate financial reports for player and manager remuneration - 14 charges covering 2009 - 2018.
Failure to comply with UEFA licensing and FFP regs - 5 charges, period unclear
Breaches of PL PSR rules - 7 charges covering 2015 - 2018.
Failure to cooperate with PL investigations - 35 charges covering 2018 to the date the charges were made.

I think I've said before that I believe the PL will have charged them with anything they might be guilty of. There's a good chance a lot of the charges will not be proven (no doubt leading Pep to say they've been "exonerated" again), but the reason for this will be more likely that the PL don't currently have the information to know whether the charges are valid or not so they've thrown as much shit at the wall as they can, believing some of it will stick.

And I think that when this case is done, further charges will follow for 2018 to date.

The PSR charges cover a shorter period. This may be because the rules weren't introduced until 2013. I'm not sure when the first reporting period was, but it could conceivably have been 2015-16 (covering 2013-2016). The others run from 2009, the first full season after the ADUG takeover.

The failure to cooperate will, I think, be a real issue for them. It's clear they didn't, and there's been a lot of focus on this in the Everton and Forest cases (and likely in the Leicester one too). The Leicester case is likely to give us an early indication on how the commission will react to the failure to cooperate as Leicester are going down the same route as City - claiming innocence and therefore no requirement to cooperate. I don't see that ending well.

Feel free to unload your "nothing will happen" comments below, but I'm choosing to believe the glass is half full.

 

[tombrown]

I reserve my "Nothing will happen" for the supposition that Labour in power will reverse Tory practi. Bunch of fuçking cowards.

 

[dee]

I’ll be 115 when then they hear these

 

[StevieM]

I found a useful summary of City's charges:

Failure to provide accurate and up to date financial information - 54 charges covering 2009 - 2018.
Failure to provide accurate financial reports for player and manager remuneration - 14 charges covering 2009 - 2018.
Failure to comply with UEFA licensing and FFP regs - 5 charges, period unclear
Breaches of PL PSR rules - 7 charges covering 2015 - 2018.
Failure to cooperate with PL investigations - 35 charges covering 2018 to the date the charges were made.

I think I've said before that I believe the PL will have charged them with anything they might be guilty of. There's a good chance a lot of the charges will not be proven (no doubt leading Pep to say they've been "exonerated" again), but the reason for this will be more likely that the PL don't currently have the information to know whether the charges are valid or not so they've thrown as much shit at the wall as they can, believing some of it will stick.

And I think that when this case is done, further charges will follow for 2018 to date.

The PSR charges cover a shorter period. This may be because the rules weren't introduced until 2013. I'm not sure when the first reporting period was, but it could conceivably have been 2015-16 (covering 2013-2016). The others run from 2009, the first full season after the ADUG takeover.

The failure to cooperate will, I think, be a real issue for them. It's clear they didn't, and there's been a lot of focus on this in the Everton and Forest cases (and likely in the Leicester one too). The Leicester case is likely to give us an early indication on how the commission will react to the failure to cooperate as Leicester are going down the same route as City - claiming innocence and therefore no requirement to cooperate. I don't see that ending well.

Feel free to unload your "nothing will happen" comments below, but I'm choosing to believe the glass is half full.

It feels like failure to co-operate and provide info would more likely attract a financial penalty - which is where I think this will end up. The rest will end up being unproven and dismissed.

 

[Beamrider]

It feels like failure to co-operate and provide info would more likely attract a financial penalty - which is where I think this will end up. The rest will end up being unproven and dismissed.

I think failure to cooperate will only be a financial penalty IF the other charges are unproven. If (some of) the charges are proven then I'd expect failure to co-operate to increase the sanction for the other charges.
And on "unproven", don't forget that the burden of proof is on City - they have to prove innocence, the PL does not have to prove guilt. That will likely be the basis of their appeal to CAS in due course (that the burden of proof within rules they signed up to is not fair).

 

[Squiggles]

What does the appeal process look like? Can City endlessly appeal like a prisoner on death row, or is there a chance of seeing a resolution in our lifetime?

 

[Beamrider]

What does the appeal process look like? Can City endlessly appeal like a prisoner on death row, or is there a chance of seeing a resolution in our lifetime?

As I understand it, the initial hearing would be a commission, same as for Everton / Forest, albeit the complexity of the case means that process would take a much longer time. First appeal would be within PL rules, to an appeals commission (same as with Everton's appeal). Beyond that, I think the only recourse is then to CAS.
In terms of timescale, the suggestion is initial hearing later this year, decision mid 2025. I'd then say 3-4 months for the appeal, as that process would be confined to matters contained in the initial decision, rather than a re-hearing of the entire case, so it should be quicker. Notably, the CAS process for the UEFA ban took 5 months, so that might not take forever either.
But best case we'd still be looking at 2-3 years before a final, binding verdict, with any punishments likely held over until that time. So even if the initial ruling goes against City, they'll keep lingering like a bad smell for a couple of years afterwards.

 

[StevieM]

I think failure to cooperate will only be a financial penalty IF the other charges are unproven. If (some of) the charges are proven then I'd expect failure to co-operate to increase the sanction for the other charges.
And on "unproven", don't forget that the burden of proof is on City - they have to prove innocence, the PL does not have to prove guilt. That will likely be the basis of their appeal to CAS in due course (that the burden of proof within rules they signed up to is not fair).

That’s fair.

I thought there was no right of appeal?

Does this mean they’ll get to “appoint” 2 of the 3 people hearing the appeal again, like the last time they went to CAS and won the appeal rather shockingly 2-1.

 

[Brizzle]

By the time they get any sort of punishment, I bet Pep will have jumped ship so that he doesn't have to face the music

 

[Farkmaster]

By the time they get any sort of punishment, I bet Pep will have jumped ship so that he doesn't have to face the music

He will leave and take a moral highground that is somewhere around where that sub imploded, the apologist cunt.

 

[Hansern]

Fucking lolz

View: https://x.com/MailSport/status/1775844357246988680?s=20

 

[The Nomad]

Fucking lolz

View: https://x.com/MailSport/status/1775844357246988680?s=20

If this happens, I'll officially stop watching the Premier League, and probably football altogether. It'd be the final nail in the coffin.

 

[Beamrider]

I think you have to look at this in the context of the likely appointment of a football regulator. This is likely something the PL will be happy to give the regulator as a win - either abolishing it or agreeing to allow some or all of the funds to trickle down the pyramid (helping to resolve the current impasse with the EFL). The trickle down is hinted at in the article.
And as much as this sounds absurd, it may actually help level the playing field a little. The teams at the top of the league will still be bound to UEFA limits so won't be making use of this. But the teams looking to break into that group (or promoted teams wanting to strengthen like Forest tired to) might be able to take advantage.
But it will inevitably encourage overspending and increases the risk of mid-table clubs being cast adrift if their sugar daddy owners get bored or put in prison wherever they came from.
Ultimately, this looks like playing politics to me.And if the PL clubs are seeing their arses over a few clubs being docked points then they need to give their heads a wobble. Ultimately, this shows that the rules are starting to bite. Just need them to bite City and Chelsea and we'll be all good.

 

[737Max]

I think you have to look at this in the context of the likely appointment of a football regulator. This is likely something the PL will be happy to give the regulator as a win - either abolishing it or agreeing to allow some or all of the funds to trickle down the pyramid (helping to resolve the current impasse with the EFL). The trickle down is hinted at in the article.
And as much as this sounds absurd, it may actually help level the playing field a little. The teams at the top of the league will still be bound to UEFA limits so won't be making use of this. But the teams looking to break into that group (or promoted teams wanting to strengthen like Forest tired to) might be able to take advantage.
But it will inevitably encourage overspending and increases the risk of mid-table clubs being cast adrift if their sugar daddy owners get bored or put in prison wherever they came from.
Ultimately, this looks like playing politics to me.And if the PL clubs are seeing their arses over a few clubs being docked points then they need to give their heads a wobble. Ultimately, this shows that the rules are starting to bite. Just need them to bite City and Chelsea and we'll be all good.

Then the 10 point deduction for going into administration needs to at least be doubled/tripled, there needs to be some kind of consequence on clubs who will not care about fiscal responsibilities. A harsher penalty for going into administration needs to be a must stricter threat along with any so-called luxury tax.

 

[tombrown]

I think you have to look at this in the context of the likely appointment of a football regulator. This is likely something the PL will be happy to give the regulator as a win - either abolishing it or agreeing to allow some or all of the funds to trickle down the pyramid (helping to resolve the current impasse with the EFL). The trickle down is hinted at in the article.
And as much as this sounds absurd, it may actually help level the playing field a little. The teams at the top of the league will still be bound to UEFA limits so won't be making use of this. But the teams looking to break into that group (or promoted teams wanting to strengthen like Forest tired to) might be able to take advantage.
But it will inevitably encourage overspending and increases the risk of mid-table clubs being cast adrift if their sugar daddy owners get bored or put in prison wherever they came from.
Ultimately, this looks like playing politics to me.And if the PL clubs are seeing their arses over a few clubs being docked points then they need to give their heads a wobble. Ultimately, this shows that the rules are starting to bite. Just need them to bite City and Chelsea and we'll be all good.

Forest didnt "try to strengthen" .. they tried to create 4 teams with their transfers (and couldn't even manage one)

 

[dee]

Forest didnt "try to strengthen" .. they tried to create 4 teams with their transfers (and couldn't even manage one)

How many squads are Chelsea up to now?