PIF and RB Sports & Media

[gdm]

27 minutes ago, Bompeter said:

What are you even on about man? What’s your actual disagreement with what I’ve posted? 

You nor I have a single clue what it means. Stop going on like you do

[HaydnNUFC]

Personally think it's great that Bompeter/Penn is putting this cutting edge financial analysis on here before sticking it in the Telegraph. Great stuff.

 

 

Edited July 27, 2022 by HaydnNUFC

[The Prophet]

6 minutes ago, Kanji said:

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. 

 

 

 

 

Cheers for the insight.

[Anderson]

It's a credit facility to help manage short-term cash flows. It doesn't seem like anything to get particularly excited or concerned about tbh.

 

Also worth noting we don't appear to be borrowing the full amount of the TV money up front, that's simply what's available to us and what we've offered as security.

 

 

Edited July 27, 2022 by Anderson

[JonBez comesock]

6 minutes ago, Decky said:

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. 

95% of clubs do this 

 

nothing to see here 

[Kanji]

9 minutes ago, Bompeter said:

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. 

 

 

Ok so let's play this out for 1 moment - 

 

1) PIF inject cash into the club, 500m as you say. With absolutely no restriction or approval needed from the PL. 

 

OK.

 

2) Once club spends say 500m, it's subject to the FFP regulations.

 

OK.

 

Conclusion: So it absolutely does matter, because once you spend it, you're subject to FFP calcs. Which, need non related party injections of cash (IE: a completely unrelated 3rd party commercial partner) for the purposes of the calculations to deem compliance to the rules. 

 

 

Edited July 27, 2022 by Kanji

[relámpago blanco]

It's just normal behaviour for any organisation. 

[Bompeter]

2 minutes ago, Kanji said:

 

Ok so let's play this out for 1 moment - 

 

1) PIF inject cash into the club, 500m as you say. With absolutely no restriction or approval needed from the PL. 

 

OK.

 

2) Once club spends say 500m, it's subject to the FFP regulations.

 

OK.

 

Conclusion: So it absolutely does matter, because once you spend it, you're subject to FFP calcs. Which, need non related party injections of cash (IE: a completely unrelated 3rd party commercial partner) for the purposes of the calculations to deem compliance to the rules. 

 

 

 

No, you’re completely wrong.

 

Whether the club raises £50m/£100m/£100bn from an owner’s injection of capital, or from the raising of external debt, it makes absolutely no difference whatsoever for FFP purposes.

 

Again - if you spend £100m of owner’s money, or £100m of HSBC’s money, they’re both treated exactly the same for FFP purposes.

 

This transaction has nothing to do with FFP or related party rules - it just doesn’t, soz.

[Johnny]

Why people took this as a bad thing? We don't want the Saudis, at least we prefer not to owned by the Saudis. And this is prove that we aren't owned by the Saudi. So this is a good thing.

[Anderson]

16 minutes ago, Kanji said:

Conclusion: So it absolutely does matter, because once you spend it, you're subject to FFP calcs. Which, need non related party injections of cash (IE: a completely unrelated 3rd party commercial partner) for the purposes of the calculations to deem compliance to the rules. 

 

Not entirely sure on this - the RPT stuff is about sponsorship deals being used to circumvent it isn't it? Not sure there'd be any distinction between related party/external loans as they have no effect on P&L.

 

Assuming we're still talking cash via PIF or HSBC this is...

 

 

Edited July 27, 2022 by Anderson

[KDT]

Nobody knows anything.

[madras]

1 minute ago, Bompeter said:

No, you’re completely wrong.

 

Whether the club raises £50m/£100m/£100bn from an owner’s injection of capital, or from the raising of external debt, it makes absolutely no difference whatsoever for FFP purposes.

 

Again - if you spend £100m of owner’s money, or £100m of HSBC’s money, they’re both treated exactly the same for FFP purposes.

 

This transaction has nothing to do with FFP or related party rules - it just doesn’t, soz.

But surely the origin of the money matters to FFP ?

[relámpago blanco]

Anyone who reads anything into this knows fuck all about how organisations operate.

[Anderson]

Just now, madras said:

But surely the origin of the money matters to FFP ?

 

Only if it's classed as income.

[NWMag]

Just now, madras said:

But surely the origin of the money matters to FFP ?

But PIF wouldn’t be a related party would they? As they are the owner. 
 

a related party as far as I’m aware would be say aramco, who have no link to Newcastle United but do have a link to PIF?

[Pixelphish]

I wish he'd stuck with the literary themed usernames.

[Bompeter]

2 minutes ago, madras said:

But surely the origin of the money matters to FFP ?

No, the origin of revenue matters for FFP. Not cash. The raising of finance (whether it’s from the owners or externally) doesn’t touch revenue. 

[Kanji]

6 minutes ago, Bompeter said:

No, you’re completely wrong.

 

Whether the club raises £50m/£100m/£100bn from an owner’s injection of capital, or from the raising of external debt, it makes absolutely no difference whatsoever for FFP purposes.

 

Again - if you spend £100m of owner’s money, or £100m of HSBC’s money, they’re both treated exactly the same for FFP purposes.

 

This transaction has nothing to do with FFP or related party rules - it just doesn’t, soz.

 

What? Unless I've missed something: 

 

1) TV money is considered an approved stream of cash and is considered income

2) Owner injection of cash is not considered income, its equity, you can spend equity but you need income from non related parties 

 

If the above didn't apply, then Man City wouldn't have been fudging around with massive sponsorship deals and sketchy commercial deals etc. 

 

 

Edited July 27, 2022 by Kanji

[relámpago blanco]

Just now, Kanji said:

 

What? Unless I've missed something: 

 

1) TV money is considered an approved stream of cash and is considered income

2) Owner injection of cash is not considered income, its equity, you can spend equity but you need income from non related parties 

 

If the above didn't apply, then Man City wouldn't have been fudging around with massive sponsorship deals and sketchy commercial deals etc. 

Exactly

[buzz]

Worrying

[Happinesstan]

46 minutes 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?

I think so. Pretty sure if PIF out in 80million, then PCP/Reuben have to put in 10million each. Not certain, mind.

[Yorkie]

7 minutes ago, Johnny said:

Why people took this as a bad thing? We don't want the Saudis, at least we prefer not to owned by the Saudis. And this is prove that we aren't owned by the Saudi. So this is a good thing.

 

Holy shit they're letting you speak now?

[Anderson]

1 minute ago, Happinesstan said:

I think so. Pretty sure if PIF out in 80million, then PCP/Reuben have to put in 10million each. Not certain, mind.

 

PIF could inject cash as a shareholder loan instead of equity, which wouldn't require PCP/Reuben to match. 

[LV]

51 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.

 

 

 

‘In any way’??

 

You know that’s rubbish right? 

[relámpago blanco]

1 minute ago, Happinesstan said:

I think so. Pretty sure if PIF out in 80million, then PCP/Reuben have to put in 10million each. Not certain, mind.

They don't thats just when you take money out.  PIF may insist on that however.