PIF and RB Sports & Media

[ponsaelius]

PIF could put their own money in and then take back out again at a far better rate than what they're going to get off HSBC. That's the alarming thing to me - not sure I see any reason to do it this way.

[Guest reefatoon]

1 minute ago, Yorkie said:

Can't say I've any great sadness in not being totally Man City'd by the Saudi PIF. Just being ambitious again was all I wanted. 

 

Totally agree. We are at last being ran like a professional club, yet it still isn't enough for some people.

[GeordieT]

1 minute ago, NWMag said:

Could be nothing to do with PIF perhaps? Say we want to spend another £100 million on transfers but don’t have the money, PIF may put their 80% in but maybe PCP and/or Rueben don’t have that cash so are taking a loan for their 10% shares?

Taking a personal loan secured against the clubs future revenue? Would hope not.

 

It is hard to fathom the rationale really, obviously cash flow, but can’t see why PIF couldn’t have provided a facility.

[Kanji]

5 minutes ago, ponsaelius said:

Do find it a bit alarming that they wouldn't just put their own cash in like other club owners do. Unless there is FFP benefits I am missing.

 

I'm fairly certain MOST PL clubs take advantage of the broadcast money by setting up a facility like this to advance those streams early to use for whatever means necessary. I think in the past, MA never or rarely did this. 

[The Prophet]

1 minute ago, Bompeter said:

Related party transactions relate to revenue or expenditure earned/levied by related parties, not the injection of capital.

 

Fair enough, I was just speculating.

 

I'm not qualified enough to know whether this is good, bad or neither.

[Yorkie]

Putting the debate about who is bankrolling us to one side, didn't we do this right before we signed Miggy?

[Kid Icarus]

2 minutes ago, ponsaelius said:

PIF could put their own money in and then take back out again at a far better rate than what they're going to get off HSBC. That's the alarming thing to me - not sure I see any reason to do it this way.

 

Are you sure this is definitely the case?

 

The guy who posted it seems to think other clubs do it this way too. 

 

Can't say I care too much either way tbh, just curious. 

[Bompeter]

I just think if we’re going to suffer the reputational damage of being associated with the Saudis, the least they could do is bankroll us and not quibble over £20m here or there given how profligate they are in other areas (e.g. golf). Instead the club is forced into raising external debt? 

[The Prophet]

 

[54]

Weren't there recent rule changes to FFP that meant owners couldn't pump money into the club for transfer related activities in the form of a "Loan"? Whereas borrowing from a bank is allowed? May be making that up mind.

[Kid Icarus]

1 minute ago, Bompeter said:

I just think if we’re going to suffer the reputational damage of being associated with the Saudis, the least they could do is bankroll us and not quibble over £20m here or there given how profligate they are in other areas (e.g. golf). Instead the club is forced into raising external debt? 

 

You're guessing though aren't you? 

[Yorkie]

Surely this is close as anything to proof that our spending this window is far from over?

[et tu brute]

13 minutes ago, Bompeter said:

This suggests we really aren’t being bankrolled by the Saudis in any way. Pretty disappointing. I’d love to know what exactly the funding agreement is between PIF and the minority owners.

 

 

 

[HaydnNUFC]

13 minutes ago, Bompeter said:

This suggests we really aren’t being bankrolled by the Saudis in any way. Pretty disappointing. I’d love to know what exactly the funding agreement is between PIF and the minority owners.

 

 

 

 

Alreet Penn/IMTTS/Baldwards?

[Jackie Broon]

9 minutes ago, The Prophet said:

I wonder if it's a way of injecting cash without falling foul of FFP and "related party transactions"?

 

I don't think so. In fact the rules specifically prohibit loans being used as secure funding to offset losses for FFP.

[r0cafella]

Just now, Yorkie said:

Surely this is close as anything to proof that our spending this window is far from over?

I mean our spending isn’t done but this isn’t the reason. The club will likely bleed money on a month to month basis in cash flow terms. 
 

also this facility will surely result in us patient interest to hsbc. 

[54]

3 minutes ago, The Prophet said:

 

So all we've done is bought forward the payments from the Premier League for the upcoming season via a bank loan, so we can use it in the short term. Given we're being told we're bound by FFP, and don't have the revenue streams set up yet. It seems like a completely logical thing to do.

[Bompeter]

7 minutes ago, Kid Icarus said:

 

You're guessing though aren't you? 

Guessing about what - that we aren’t being bankrolled by the Saudis?

 

Not really. If we were the club wouldn’t be raising external debt secured against future TV revenue, and needlessly incurring more interest costs as a result. 

 

 

Edited July 27, 2022 by Bompeter

[Kid Icarus]

2 minutes ago, Bompeter said:

Guessing about what - that we aren’t being bankrolled by the Saudis?

 

Not really. If we were the club wouldn’t be raising external debt secured against future TV revenue.

 Guessing about everything you said. About why the money's being borrowed, about quibbling over money, about us being 'forced' to take a loan out - you're just guessing and then drawing a conclusion from your guesswork. 

 

 

Edited July 27, 2022 by Kid Icarus

[54]

Just now, Kid Icarus said:

 Guessing about everything you said. About why the money's being borrowed, about us being 'forced' to take a loan out - you're just guessing and then drawing a conclusion from your guesswork. 

Especially given the majority of other clubs tend to do this.

[Jackie Broon]

I suppose it might make sense in that all related party transactions need to be pre-approved by the PL, which could potentially cause a cash flow issue. A credit facility would give the club immediate access to money if there is a delay caused by PL approval of a related party transaction?

[Kanji]

A lot of clubs do this FYI. Many clubs wanted the PL to take out a master financing plan for PL clubs to utilizie that was leveraged against TV money...this would then be drawn upon (each club's share would be tied to the TV money owed to them) to handle cash flow - particularly the smaller clubs. I don't think or know if this ever got done, but I believe the league did not want to be in that business and so it was up to the clubs do that. 

 

Again, every club is entitled to the TV money, some choose to advance it (like we are) and some don't. If the interest isn't terrible then its absolute no brainer to do so. If your debt is manageable, debt is fine. It's when you're over leveraging and don't have a proper backer to support the debt in a full backstop that you're at risk. Further, and this is very very important, there is nothing to say the PIF don't "issue shares" like they did in the past to pump more money into the club in addition to this. 

 

It's NOT one or the other, exclusively FYI. This is a perfect example of us using the tools necessary and available to us whilst being self sufficient and hopefully using it to our maximum benefit. 

 

 

Edited July 27, 2022 by Kanji

[mighty__mag]

4 minutes ago, Bompeter said:

Guessing about what - that we aren’t being bankrolled by the Saudis?

 

Not really. If we were the club wouldn’t be raising external debt secured against future TV revenue, and needlessly incurring more interest costs as a result. 

 

 

 

 

Of course we're not being bankrolled by the Saudis, yet!

 

Our club is under total scrutiny, the time will come, so exploiting other avenues is necessary I guess.

[Bompeter]

2 minutes ago, Jackie Broon said:

I suppose it might make sense in that all related party transactions need to be pre-approved by the PL, which could potentially cause a cash flow issue. A credit facility would give the club immediate access to money if there is a delay caused by PL approval of a related party transaction?

Owner’s directly injecting cash into the club isn’t a related party transaction and wouldn’t need approval from the PL. PIF could put a billion into the club and it wouldn’t have anything to do with FFP (actually spending that amount and incurring the subsequent amortisation obviously would though). But there are no limitations on equity injections.

Basically, there’s no reason to do this if PIF were willing to put (more) cash into the club. If you think that’s a desirable or undesirable thing is everyone’s own personal opinion. 

 

[Decky]

I know fuck all about finance but I’m gonna guess this is either normal procedure or we’re using a loophole to get round FFP to get more transfers in. Next summer our ability to spend might be different once we get a new sponsor etc, something they were expecting to do this summer.