Terraloon

You then would get into a debate about fair value ( it works both way) with the PL/ UEFA but , and now I am getting outside my knowledge, I would imagine that the Police could well get involved because that sounds akin to Fraudulent Accounting particularly as you are talking about the same individuals agreeing the transactions Also I would imagine that HMRC would be challenging the accounts which would come with a whole load of implications

Because HMRC wouldn’t just allow that involving the VO Agency to determine the commercial value of the properties particularly if the properties were disposed of for that much under their depreciated value

I would imagine that there would be some sort of notional or contra payment paid from the trading hotel income by way of rent or the like but sorry I have no info how the arrangement is contracted to work. If you look at most commercial entities the business itself doesn’t actually own the building it’s a landlord who doesn’t get the income of the business but a commercial rent.

I think that’s right but CFC sold the properties not the hotel business

That’s correct and as I say we have no idea what the situation is but the fact that someone is briefing the press re our 23/24 position is either bravado or based on agreed submissions

Won’t save anything in the 23/24 year as their contracts run to 30/6/24 and ironically they are paid for a period into 24/25

The PL haven’t confirmed that the deal has been signed off but there again such transactions have to be kept confidential so it’s unlikely that such information would be placed in the public domain. The transaction was included in the year22/23 which in effect ended 12 months ago . The PL will have know about this transaction way before 30/6/23 they, the PL , have only a short period to process maters such as this and that time has way passed . Can we assume anything from that?

As I said in my original post clever people employer very clever people to find work around. Is what we have done right? Depends what you define as right ? But the reality is that numerous trading entities don’t own they property from which they trade

Sad that I am I spent a couple of hours a week or so reading the UEFA regulations and the PLs alongside. The UEFA ones first have different strands such as squad costs, no outstanding payables debt and of course all that alongside allowable losses. You are 100% correct the UEFA punishments are far less draconian In terms of exceeding squad costs there is a table of monetary fines that basically withhold a % of the revenue earned from UEFA . The table does vary based on how many occasions a club exceeds and by what % but I would think that if you worked on say 15% -20% in year one that would be about right The squad wages are for 1) Every male player registered with the club 2) Head Coaches wages 3) Amortisation and Impairment for those players 4) Agents fees etc ( theses are included in the amortisation charge. You then add back the wages spent on academy players Many make the mistake of looking at accounts and just taking the wage numbers reflected in those accounts as being the number they will use. I have seen estimates of what % is probably accurate . It’s quite simply impossible without access to the internal numbers to know but it could be as high as 90% for some clubs ( Everton for instance have outsourced commercial and catering and WHU pay stadium costs including security are included in their rent of the London Stadium) I would imagine that some clubs may well be circa 70% or even lower for clubs that have massive numbers employed in commercial, admin etc. In terms of football revenue UEFAs regulation around “ profit “ from the disposal of tangible assets is not as clear cut as it could be and unless you replace assets such as training grounds and stadiums they aren’t allowed at all. Irrespective if say for instance the proceeds from the sell of those hotels are disallowed it’s highly likely that a sanction will follow by way of a sanctions agreement and yes that could be expulsion but more likely to be an additional monetary policy penalty and squad size restrictions. Those hotels were independently valued ( by two companies) and the proceeds didn’t exceed the depreciated value in the relevant accounts. Anyone that has visited Stamford Bridge will know that there is significant property owned by the club that I suspect will now be sold to Blue Co. From the block of flats which is worth tens of millions . I would add in those UEFA regulations there is significant concession when clubs have been through issues such as the knock on of things such as the sanction’s imposed on RA. In effect that could mean for the years 21/22 & 22/23 the numbers are excluded simply because the 3 year cycle would be a factor in the assessment. What all this has gone to prove is that PSR/ FFP or whatever system the football bodies want to put in place the loop holes as some refer them as being will always be exploited by the very clever people that this very rich people employ to crunch the numbers

The author or source of the information is Muguire ( Spelling) who has put himself up as an expert. Treat everything he says with a tin of salt . He can read a set of accounts that much is clear but his assumptions on a club to club basis are based on those but post say the 30/6/23 accounts he has no idea for instance what amortisation will look like at end of 31/6/24. He basis his estimates on the likes of transfer market who yes are probably in the ball park but still not accurate enough but even then the numbers shown in the accounts will be subject to adjustments. On top of all that discussions are ongoing all the time between clubs and the PL indeed the Everton IC gave an insight into such discussions and allowances are agreed which again don’t feature in accounts. Then you have allowable deductibles again assumptions but no more than that . How much has been claimed for academy , how much for woman’s football how much for allowable exceptional items etc.

The claim if I remember was that SJHL not being NUFC wasn’t bound by the arbitration process as SJHL simply put wasn’t “The Club” in effect that was the thrust of the referral. The CAT clearly didn’t rule on matters as it was felt that the separate process ( Arbitration under FA rule) would almost certainly resolve the matter before it and I guess it’s all irrelevant because you are where you are. The point you make about the referral to the HC the point of law being CAT jurisdiction is interesting and something I haven’t really considered but thinking about that I wonder if PL rules would take precedence but again that would I can see your thinking in that regard.

The PL version is based on clubs accounting period and to a degree UEFAs version looks at the same but in terms of squad costs and applicable income is indeed over the period 1/1-31/12

That process is dictated by FIFA

It was Villas proposal so pretty sure they voted for it. It depends if the clubs coming up had a vote or the clubs going down. I suspect it’s the former if that’s correct it’s likely to be Leicester .

I think that is in the main correct although the thrust of Cities arguments were that the arbitration panel who agreed with the PL that full disclosure should occur was that the PL panel weren’t competent due in the main to lack of impartiality

Newcastle Utd didn’t take the matter to CAT it was ST James Holdings Ltd. Subtle difference bearing in mind the ownership hierarchy but that was the QCs case and that argument was likely to succeed, as you say, but it was because Ashley hadn’t submitted information in accord it seems with PL regulations. SJHL case was that they weren’t duty bound to the football bodies (FA& PL) process of arbitration as dictated to by FIFA and in reality had the PL been of a mind they could in all likelihood have charged Ashley & NUFC

Not in PL arbitration there isn’t. There is what in effect is a contractural agreement between the league and all member clubs that save on a point of law where there is a route to the HC all clubs have agreed to abide by the decisions/ conclusions reached under the PL Rule Book and in particular section X which deals specifically with the arbitration procedure. The very last subsection excludes the route that you suggest is open to clubs.

City have already argued that in the HC and had their backsides well and truly kicked. I very much doubt that they will pursue past Arbitration Part of the contract if you like all clubs and the league have is that they will take such disputes to a PL Arbitration Panel.

Whilst I wouldn’t necessarily call them loop holes I don’t necessarily dis agree with the point you make. The fact is that most PL clubs are part of a group and opportunities existed for clubs to sell on assets in accord with accounting principles and indeed company law the fact is many have taken opportunities to do so but little or no fuss has been made. Remember for instance city selling image rights to an associate company ? The granting of contracts ( in excess of 5 years) was never a problem for UEFA when the Spanish big 3 ( Real, AM & Barca) routinely handed out deals over 5 years nor indeed was there an issue when lots of clubs in England likewise did the same. Were clubs exploiting a loophole or was it simply clubs wanting to protect their interests? It’s worth noting these extended contracts haven’t just been awarded for players that attracted big fees nor did the rule change mean that players like Caciedo or Palmer , signed after the rule change nor indeed there they restricted to just players that a fee was paid . Yes Chelsea’s new owners haven’t been backward in this but the main drivers in the rule change such as Arsenal could have followed the same route but as was their right choose not to but in their haste to get a rule change the impact will be far wider than just Chelsea’s PSR and FFP submissions. For instance should Newcastle want to extent say Isaks contract the residue sum to be amortised can’t be re calculated as has been the case for many a year nor , if I am reading it right will agents fees, additional signing on fees etc associated with a second or subsequent contract come into the equation.

It has always seem odd to me that when Bohley etc took over the club they never seemed concerned about PSR or indeed FFP. None of us outside the loop will have a clue what the PLor indeed UEFA have rubber stamped in advance. That isn’t just in relation to sums that could be added back as a consequence of the impact of RAs sanctions on the club but there was a hint in the 21/22 accounts when it came to sums impaired against players values was the most ever shown in a PL clubs accounts that the new owners are for want of a better phrase tidying up matters post RA and in all likelihood in accord with concessions already in place David Ornstein is far closer to the heiracy at Chelsea than most journalists indeed he has been saying for a while that Chelsea actually don’t have to sell in 23/24 other than players already committed to leaving such as Hall but there will have to be sales in 24/25 I have always questioned FFP and by default PSR and yes the transfer of assets by way of inter company transactions comply with FSR which is the bedrock of accounting but as we have seen the more the football authorities try to close loop holes the more the clever people seem to find work arounds

There is provision , before “ charges” are passed to an IC for the PL & an individual or club to agree to what in effect is a settlement that said I am far from sure that the league or come to that an IC are empowered to agree to one in the manner being floated at this stage. The clear route in the PL rules is that the legue step aside once an IC has been set up and the case is decided on the evidence independently of course the process will involve things like discovery. Ironically and perhaps blind hope I actually wonder if we , Chelsea, are going to be dealt with by way of a settlement . It’s the only explanation I can think of as to why no charges have been passed to an IC. Back to City as I have said before I am far from convinced that the higher impact charges involving disguised equity will be proven, that is unless the PL have a smoking gun, but the charges around payments to ex managers and players alongside failing to co operate are far easier to prove.

That’s not quite right despite what was said on Talksport. The management contract is with the new owners BlueCo and not Chelsea Holdings

My point about Arsenal was that they in effect borrowed money and were able to capitalise all the costs when it came to building the stadium but didn’t reduce the sums when they redeveloped Highbury. It’s not a great analogy but when you have a house and you buy a new one only one you use the proceeds from sale to reduce your indebtedness.Arsenal didn’t they claimed allowances on a greater sum than was needed and used property sales to fund running costs. My point about Arsenal is that they couldn’t get the type of loans that KSE could simply because they , KSE, borrowed money from lenders in the US . The owners then in turn lent money to Arsenal at far lower rates than were commercially available indeed in Arsenals accounts they recognise this as being a capital contribution. In effect a groups heiracy was used to reduce running costs These two hotels were never actually shown in CFC accounts( Remember Chelsea Village) they were always in CFC Holdings who in turn owed, via Fordstam, RA the £1+ billion. Fordstam is now being wound up and I would imagine that a lot of what is going on is unpicking matters that were needed to organised in such a way as to facilitate the sale. It seems that the stadium rebuild is going to be undertaken by BlueCo22 as opposed to CFC Ltd. Nothing wrong with any of that but BlueCo will almost certainly want and need all land assets that previously were owned by Fordstam to be put into BlueCo ownership. It’s worth noting that most clubs have a complicated ownership model whereby things such as stadia are owned by separate entities. Look at Spurs for instance then at Arsenals.

When the likes of Arsenal built their new stadium they in effect retained ownership of the old Highbury site and redeveloped it into hoses / flats etc. They claimed 100% of the costs to build the new stadium and no body blinked an eye when they included property sales in their income. Ok you might say but they didn’t sell it to another company with links to an owner. So maybe then let’s look how they settled huge and expensive commercial borrowings to both banks and government loans . but not by increased equity but by way of less expensive loans. Or what about City or WHU who sold the grounds they owned and moved into what in effect are government or local authority funded modern and bigger grounds. Scratch beneath the surface and you see all sorts of questionable but sanctioned activities at clubs it’s just that some loop holes are more acceptable when it’s your own loop holes

It’s quite interesting when I read comments like this simply because Chelsea certainly weren’t the first to offer contracts over five years nor will I suspect will the restrictions imposed for FFP/PSR stop clubs protecting what are very expensive assets by signing them on long term contracts. There is ,despite the rule change, absolutely no restrictions as to the length of a contract the change purely limits the time over which amortisation in accounts can take place it would be a minefield if UEFA or the PL tried to restrict contract lengths if such contracts are allowed in the UK which they are just as they are in many jurisdictions When I first started to watch football it was very very rare that a player signed a contract over 3 years now a player under say 25 signed for a decent fee is given a five year deal as a minimum now quite a few clubs regularly offer contracts that are longer than 5 years. Look at the big Spanish clubs for instance and in particular Real Madrid or 6 year deals at Newcastle . There is absolutely nothing wrong with offering deals of 3-5-6- 7 years or whatever there is absolutely no obligation for a player to sign them but the haste with which UEFA and the PL restricted the period over which a fee can be amortised won’t just impact Chelsea it has wider repercussions in the PL because many many clubs extend players contracts over five years and with that they historically have been after a couple of years reduce their own amortisation charge that can not happen and I wonder how it impacts when it comes to to amortisation of agents fees when it comes to contract extensions The irony is restricted time lines for amortisation will potentially work against clubs that aspire to break into the top 6 or perhaps just push on because whilst they might want to sign say a £40 million player clubs may well find the £8 million annual charge too much