City and Financial Doping | Charged by PL with numerous FFP breaches

[padr81]

Do you still enjoy watching them or is there a sense of impending doom? Must be kind of weird place to be in as a supporter

I mean I love watching the team to be honest, from a purely football point of view but the more of this stuff that comes out the more it feels tainted.

I've said before it'll suck for us supporters and I don't think the players or manager should be punished (purely because they're not guilty of the crimes, unless of course they're complicit) but if we're guilty (which I think we are), everyone who had anything to do with the club at top level should be removed from football forever(oners, Soriano, Txixi etc..) and we should be expelled from the PL I'd say for a set number of years to. LIke 3 years of some shit so we can't just get stuck int eh championship for a season and come straight back up like what happened in Italy (though I do feel thats the most likely outcome).

One thing I do know is whether its the CL or Conference League I want this shit over. Its kinda surreal to be like "We're one of the best club side of all time but..."

All that said with a not guilty verdict I'll be in here apologising to City and swinging my willy around about how good we are again.

 

[Ole'sattheWheel]

If it does come to that, then what is stopping them from continuing to cheat, because they know the UK government is protecting them from any punishment?

Also what's to the stop every team in the league from deciding to cheat due to seeing City get away with it.

Then it becomes a competition of who can cheat the best. It’s already going down the shitter anyway - feck it

 

[stevoc]

Can easily see this becoming a diplomatic issue.

I don't see how because as we know City are owned by a private individual and not the nation state of Abu Dhabi.

 

[Paddymcc]

Not a chance anything happens City after the UAE and GB pencilled a nuclear deal together.

https://www.google.com/amp/s/www.th...o-seize-nuclear-powers-moment/?outputType=amp

 

[justsomebloke]

On FFP in general; shouldn't somebody be asking whether it's really a good thing to have a system that heavily incentivises clubs to sell their own academy players?

 

[adexkola]

On FFP in general; shouldn't somebody be asking whether it's really a good thing to have a system that heavily incentivises clubs to sell their own academy players?

The rules are stupid

"Yeah but the clubs agreed to it so"

The rules are stupid

"But there was an agreement so the clubs have to adhere"

The rules are stupid

And so on

 

[Grande]

I mean I love watching the team to be honest, from a purely football point of view but the more of this stuff that comes out the more it feels tainted.

I've said before it'll suck for us supporters and I don't think the players or manager should be punished (purely because they're not guilty of the crimes, unless of course they're complicit) but if we're guilty (which I think we are), everyone who had anything to do with the club at top level should be removed from football forever(oners, Soriano, Txixi etc..) and we should be expelled from the PL I'd say for a set number of years to. LIke 3 years of some shit so we can't just get stuck int eh championship for a season and come straight back up like what happened in Italy (though I do feel thats the most likely outcome).

One thing I do know is whether its the CL or Conference League I want this shit over. Its kinda surreal to be like "We're one of the best club side of all time but..."

All that said with a not guilty verdict I'll be in here apologising to City and swinging my willy around about how good we are again.

That’s fair.

 

[Berbasbullet]

On FFP in general; shouldn't somebody be asking whether it's really a good thing to have a system that heavily incentivises clubs to sell their own academy players?

Works both ways, incentivises you to create your own so you can fill gaps and not fork out a fee, but also make a huge profit if you train quality players up.

 

[astracrazy]

Could Ole and Jose get a title? I think they will be relegated to league three but could any previous trophies be taken away?

I think it should happen, if they have been found guilty of cheating then 100% they should be stripped of all titles won during that period. It wouldn't be the first time a sports team or sports individual has been stripped of achievements after being found guilty. In 50 years time the records should show the correct winners.

Not sure they will have the balls to do it though.

 

[Adisa]

If it does come to that, then what is stopping them from continuing to cheat, because they know the UK government is protecting them from any punishment?

Also what's to the stop every team in the league from deciding to cheat due to seeing City get away with it.

Not every team is state-backed.

 

[Cloud7]

Pity that Liverpool will be handed the PL

One more title for SAF, one for Jose and one for Ole.

Imagine Jose at some random club in Saudi sticking up 4 fingers at the opposing manager rather than 3

 

[Woziak]

Not every team is state-backed.

The moment they get away with it, the moment the rules become worthless so some form of punishment for City will be applied.

No relegation, no stripping of titles maybe 20-30 point deduction for two seasons which will mean they will miss CL for one to two seasons but probably still make Europa League and after wining that they will be back in CL the following season.

Plus they will get a ridiculous unprecedented fine of maybe £250m which will be given as compensation to other PL clubs.

 

[steeeb]

I highly doubt they'll do anything like expulsion or taking off titles etc.

Which is crazy given the scale of what they've done. The problem is, no one really cares - it's brought up in the media lightly when something new happens - some direct rivals fans talk about it in whispers. It's not like there's a mass acceptance of 'blatant cheating' that's mentioned by everyone all the time (it is in Manchester, as banter - but I don't think many fans around the world really mention it - or other fans in other areas?) like would happen in other sports had something similar happened. And that's the exact reason why nothing will happen except some points reductions.

 

[Solius]

The fact that our dogshit government and Abu Dhabi 'discussed' these charges does make me fear the govt will put pressure on the PL to lighten the sentence, which would be a spineless travesty. Can't pretend I'm shocked though.

 

[tomaldinho1]

The fact that our dogshit government and Abu Dhabi 'discussed' these charges does make me fear the govt will put pressure on the PL to lighten the sentence, which would be a spineless travesty. Can't pretend I'm shocked though.

The only hope is how powerful the PL is for us as a product. Abu Dhabi also isn’t Saudi. Those two things make me hope the judgement will be half decent albeit it won’t be what people think is fair.

 

[GiveItToGi...nowait]

The fact that our dogshit government and Abu Dhabi 'discussed' these charges does make me fear the govt will put pressure on the PL to lighten the sentence, which would be a spineless travesty. Can't pretend I'm shocked though.

From Abu Dabi's perspective, how important is the Man City project? Do you think they would set fire to their diplomatic relationship with the UK for a sports team? Further the PL as a brand is worth so much to the UK govt, not just economically but culturally football is basically the national religion, would the govt be willing to flush it?

I could have seen some kind of compromise if city were co-operative with the investigation, but the fact they are outright refusing to me seems like they are leaving the PL with no choice but to go in two footed. If they uncover systematic money laundering and only half the charges stick but they want a "lenient" sentence how the feck do they sell that to the public? Especially after Everton and now Forrest, both sides have left themselves little room for maneuver.

 

[Solius]

From Abu Dabi's perspective, how important is the Man City project? Do you think they would set fire to their diplomatic relationship with the UK for a sports team? Further the PL as a brand is worth so much to the UK govt, not just economically but culturally football is basically the national religion, would the govt be willing to flush it?

I could have seen some kind of compromise if city were co-operative with the investigation, but the fact they are outright refusing to me seems like they are leaving the PL with no choice but to go in two footed. If they uncover systematic money laundering and only half the charges stick but they want a "lenient" sentence how the feck do they sell that to the public? Especially after Everton and now Forrest, both sides have left themselves little room for maneuver.

Everton and Forest charges will increase the pressure tenfold now. We know what the benchmark punishment is and there will be uproar if it isn't proportionate.

 

[adexkola]

From Abu Dabi's perspective, how important is the Man City project? Do you think they would set fire to their diplomatic relationship with the UK for a sports team? Further the PL as a brand is worth so much to the UK govt, not just economically but culturally football is basically the national religion, would the govt be willing to flush it?

I could have seen some kind of compromise if city were co-operative with the investigation, but the fact they are outright refusing to me seems like they are leaving the PL with no choice but to go in two footed. If they uncover systematic money laundering and only half the charges stick but they want a "lenient" sentence how the feck do they sell that to the public? Especially after Everton and now Forrest, both sides have left themselves little room for maneuver.

cc @Fortitude

 

[Adisa]

The only hope is how powerful the PL is for us as a product. Abu Dhabi also isn’t Saudi. Those two things make me hope the judgement will be half decent albeit it won’t be what people think is fair.

The government have been threatening the EPL with an independent regulator. You underestimate the leverage the UK government has.

 

[Wengerista]

There will probably be a Labour government by the time this is resolved. That might affect the 'diplomatic pressure' prognosis as they'll be slightly less likely to kowtow to the UAE? (I did say slightly)

 

[Noot]

If they uncover systematic money laundering and only half the charges stick but they want a "lenient" sentence how the feck do they sell that to the public?

Why should they uncover anything the CAS couldn't?

 

[GiveItToGi...nowait]

Why should they uncover anything the CAS couldn't?

IIRC didn't CAS reverse in their favour due to how the evidence was obtained? So there is evidence but because it was hacked illegally it was not admissable therefore the ruling was reversed?

Just found an article, it was actually because they were time barred, so another technicality:

The Cas panel of three European lawyers decided by a majority 2-1, however, that it would not consider the legitimacy of those Etisalat payments, because they were made more than five years before the CFCB charges were brought in May 2019, so were “time-barred”.

from https://www.theguardian.com/footbal...city-over-sponsor-money-time-barred-cas-rules

 

[UpWithRivers]

They cant be stopped. They cheated their way to becoming a big club. They can complete with United financially even if the Saudis pull out tomorrow. The punishment will be calculated to appease City and the other clubs. A compromise. Record points and fine. Which means jack sht to City except an inconvenience for a year. Its like the head of a drug cartel becoming a billionaire then being fined a few mill and one year probation. Its meaningless.

 

[MadDogg]

I think it should happen, if they have been found guilty of cheating then 100% they should be stripped of all titles won during that period. It wouldn't be the first time a sports team or sports individual has been stripped of achievements after being found guilty. In 50 years time the records should show the correct winners.

Not sure they will have the balls to do it though.

They obviously should be stripped of the titles, but personally I'm not sure about giving it to the teams who finished 2nd. Those titles would feel incredibly hollow to me.

Just leave those seasons vacated. The NRL in Australia did that when Melbourne cheated their way to a few titles in the late 00's.

 

[SuperiorXI]

They cant be stopped. They cheated their way to becoming a big club. They can complete with United financially even if the Saudis pull out tomorrow. The punishment will be calculated to appease City and the other clubs. A compromise. Record points and fine. Which means jack sht to City except an inconvenience for a year. Its like the head of a drug cartel becoming a billionaire then being fined a few mill and one year probation. Its meaningless.

City are owned by Abu Dhabi, not the Saudis.

It remains to be seen how harshly they will be punished. I think it needs to be severe otherwise the PL risk being superseded by another competition as I doubt the other clubs will be happy with a slap on the writs.

The PL is all about the product and the product is nothing without the top clubs. If the top clubs threatened to leave the PL would be nothing.

 

[NotThatSoph]

On FFP in general; shouldn't somebody be asking whether it's really a good thing to have a system that heavily incentivises clubs to sell their own academy players?

It only incentivises that for clubs already at their FFP limits. That could be bad enough on its own, but over time selling a player from the academy is the same as selling any other player. In some situations it incentivises keeping an academy product over a player with a high book value.

 

[redmeister]

Am I being naive here, or does this ultimately come down to the other Prem teams coming togther and agreeing to kick City out of the Premier League? I always assumed this was just Daniel Levy organising a cartel of the old school big clubs and going full throttle after City and also making sure FFP is enforced after he'd spent 20 years on huge infastructure projects. No one benefits more from FFP than Tottenham. They go from also rans, to only behind us in terms of financial might. There is no way back for City and Chelsea if football gets tightly regualted as they just don't have the fan base or infastructure. The fans they've gained over the last 20 years will disappear as quickly as they came and neither club has appeal to sponsors once they aren't at the top of the table and in the CL for a sustained period. Then they just average stadium revenue's. Arsenal and Tottehnam will have massive incomce from their stadiums. Liverpool have a huge fan base and will always compete at the top. I just think the traditional post war big clubs have come together to restore order after the likes of Abramovich and Mansour shook things up for a couple of decades.

 

[justsomebloke]

It only incentivises that for clubs already at their FFP limits. That could be bad enough on its own, but over time selling a player from the academy is the same as selling any other player. In some situations it incentivises keeping an academy product over a player with a high book value.

Er, how do you mean? How is that different for a club on their FFP limits than one not? Isn't profit/loss calculated in the same way? How is it the same over time? In which situations does it incentivise keeping an academy product, and how?

 

[NotThatSoph]

Er, how do you mean? How is that different for a club on their FFP limits than one not? Isn't profit/loss calculated in the same way? How is it the same over time? In which situations does it incentivise keeping an academy product, and how?

It's easier to demonstrate than explain, I guess. Say you consider selling an academy product for 50m. First row is sale, second is keep. Columns are seasons. Numbers are accounting profits. The academy player has a book value of 0.

50m	0	0	0
0	0	0	0

Difference is 50m, all of it at the time of the sale.

Then take a player with a book value of 40m, 4 year contract. 50m bid.

10m	0	0	0
-10m	-10m	-10m	-10m

Difference is 50m, spread over four years. This is better if FFP isn't a constraint at this moment in time, because it will give you more room to maneuver in the future where it might be.

 

[justsomebloke]

It's easier to demonstrate than explain, I guess. Say you consider selling an academy product for 50m. First row is sale, second is keep. Columns are seasons. Numbers are accounting profits. The academy player has a book value of 0.

50m	0	0	0
0	0	0	0

Difference is 50m, all of it at the time of the sale.

Then take a player with a book value of 40m, 4 year contract. 50m bid.

10m	0	0	0
-10m	-10m	-10m	-10m

Difference is 50m, spread over four years. This is better if FFP isn't a constraint at this moment in time, because it will give you more room to maneuver in the future where it might be.

Many thanks - this is a pretty unfamiliar logic if you've no grasp of accounting.

You cannot choose to spread the profit over several years?

Why does an academy player have a book value of 0?

 

[NotThatSoph]

Many thanks - this is a pretty unfamiliar logic if you've no grasp of accounting.

Why does an academy player have a book value of 0?

When you buy a player, that player is valued on the books equal to what he was bought for. So, if you buy a player for 50m, that player is worth 50m. Accounting value then falls along with the contract, because when the contract runs out the player is obviously a worthless asset to the club monetarily because he's no longer at the club. If the 50m player is signed on a 5 year contract, for instance, book value falls with 50m/5 = 10m per year.

An academy player has never been bought. Initial value is 0, and with a similar 5 year contract it falls with 0/5 = 0 per year. If you sign someone on a free transfer, like Eriksen, the same applies.

 

[justsomebloke]

When you buy a player, that player is valued on the books equal to what he was bought for. So, if you buy a player for 50m, that player is worth 50m. Accounting value then falls along with the contract, because when the contract runs out the player is obviously a worthless asset to the club monetarily because he's no longer at the club. If the 50m player is signed on a 5 year contract, for instance, book value falls with 50m/5 = 10m per year.

An academy player has never been bought. Initial value is 0, and with a similar 5 year contract it falls with 0/5 = 0 per year. If you sign someone on a free transfer, like Eriksen, the same applies.

I see - many thanks.

AFAICS, that provides a basis that is rather remote from the reality of the situation, and essentially rather abstract? I suppose this way of setting book value is also what causes your FFP situation to actually deteriorate if you sell a player for less than his book value? Which has the absurd consequence of forcing you to keep players you don't want and pay their salary, in a situation which should essentially be about increasing your income and decreasing your expenditure?

Wouldn't it actually make a lot more sense if this was based on the balance or money coming in versus money going out, rather than some abstract concept of player book value?

 

[MrMarcello]

Surely other clubs in the top system also have a vote, right? Like clubs that were apart of the EPL during the years charged. Results against may have well resulted in those clubs being relegated and losing out on cup advancement, all of which is potentially lost revenue.

 

[NotThatSoph]

I see - many thanks.

AFAICS, that provides a basis that is rather remote from the reality of the situation, and essentially rather abstract? I suppose this way of setting book value is also what causes your FFP situation to actually deteriorate if you sell a player for less than his book value? Which has the absurd consequence of forcing you to keep players you don't want and pay their salary, in a situation which should essentially be about increasing your income and decreasing your expenditure?

Wouldn't it actually make a lot more sense if this was based on the balance or money coming in versus money going out, rather than some abstract concept of player book value?

It's not really abstract at all, I don't think. It's by far the easiest and most reliable way to value players, and it's the same method you have to use in the actual accounts as well, which is nice.

If you simply go by cashflow, then a neutral year could be one where you sell a player for 50m cash in hand, and buy 10 players for 50m each where you pay 5m per year for the next decade. Cash wise you get 50m in and 50 goes out, but you've incurred 450m in liabilities (future payments owed).

 

[justsomebloke]

It's not really abstract at all, I don't think. It's by far the easiest and most reliable way to value players, and it's the same method you have to use in the actual accounts as well, which is nice.

If you simply go by cashflow, then a neutral year could be one where you sell a player for 50m cash in hand, and buy 10 players for 50m each where you pay 5m per year for the next decade. Cash wise you get 50m in and 50 goes out, but you've incurred 450m in liabilities (future payments owed).

Well, player values certainly are highly abstract? In real terms an academy player doesn't have 0 value, nor does a FT signee. This may be easier and more reliable in accounting terms, but that goes at the cost of any reflection of the actual value of the asset. And I would argue that if you're going to have a regulatory framework of this sort and this level of consequence, it needs to be structured in a way that enables rational decision-making. It doesn't seem to me that a system that punishes you for selling expensive players and cutting costs, but rewards you for selling any assets that you developed rather than bought, does that. If that's the result of using an accounts-based framework, then they shouldn't use an accounts-based framework.

Surely it would be possible to combine amortisation with a different approach to asset value? Why does player value need to factor into this at all? Why not simply regard players as a form expenditure, for FFP purposes - both wages and transfer costs?

 

[Noot]

IIRC didn't CAS reverse in their favour due to how the evidence was obtained? So there is evidence but because it was hacked illegally it was not admissable therefore the ruling was reversed?

Just found an article, it was actually because they were time barred, so another technicality:



from https://www.theguardian.com/footbal...city-over-sponsor-money-time-barred-cas-rules

You really think the reason City got exonerated by CAS is because, years into the process, the CAS suddenly realised that the alleged breaches were too long ago? And that nobody at UEFA or at City had noticed until then?

 

[NotThatSoph]

Well, player values certainly are highly abstract? In real terms an academy player doesn't have 0 value, nor does a FT signee. This may be easier and more reliable in accounting terms, but that goes at the cost of any reflection of the actual value of the asset. And I would argue that if you're going to have a regulatory framework of this sort and this level of consequence, it needs to be structured in a way that enables rational decision-making. It doesn't seem to me that a system that punishes you for selling expensive players and cutting costs, but rewards you for selling any assets that you developed rather than bought, does that. If that's the result of using an accounts-based framework, then they shouldn't use an accounts-based framework.

We probably have different interpretations of what abstract means here. If you want to estimate a player's value (which you have to do on the accounts, not talking about FFP here), then using transfer fees and contract length as estimates is by far the easiest and most accurate way. It's not perfect, for instance Rashford is obviously worth more than 0m regardless of bad form, but it's way better than any other option.

As I said, it doesn't generally reward you for selling academy players over other players. In some edge cases it does, and in some it punishes you.

Surely it would be possible to combine amortisation with a different approach to asset value? Why does player value need to factor into this at all? Why not simply regard players as a form expenditure, for FFP purposes - both wages and transfer costs?

How would you do this, considering the fact that the point of FFP is to limit spending. When you're talking about simply regarding players as a form of expenditure, are you still talking about cash flow? If so then I refer back to the example I mentioned with selling for cash and buying on credit. How should that be treated?

 

[TheMagicFoolBus]

Well, player values certainly are highly abstract? In real terms an academy player doesn't have 0 value, nor does a FT signee. This may be easier and more reliable in accounting terms, but that goes at the cost of any reflection of the actual value of the asset. And I would argue that if you're going to have a regulatory framework of this sort and this level of consequence, it needs to be structured in a way that enables rational decision-making. It doesn't seem to me that a system that punishes you for selling expensive players and cutting costs, but rewards you for selling any assets that you developed rather than bought, does that. If that's the result of using an accounts-based framework, then they shouldn't use an accounts-based framework.

Surely it would be possible to combine amortisation with a different approach to asset value? Why does player value need to factor into this at all? Why not simply regard players as a form expenditure, for FFP purposes - both wages and transfer costs?

Well, the element that's missing here is wages, as you are alluding to - these also factor into FFP. Oftentimes homegrown / academy players will sign below-market deals as they break through that may render them cheaper than someone brought in - even with a potential transfer fee amortized.

This is more or less why we sold Koulibaly - even though we took a hit on FFP for this season due to the difference in transfer fees buying & selling him, it was worth the wage bill flexibility for this year and next.

Also not to be snarky but if you have a better & more accurate approach for determining player values then you'd be the most in-demand consultant ever!

 

[Rnd898]

AFAICS, that provides a basis that is rather remote from the reality of the situation, and essentially rather abstract? I suppose this way of setting book value is also what causes your FFP situation to actually deteriorate if you sell a player for less than his book value? Which has the absurd consequence of forcing you to keep players you don't want and pay their salary, in a situation which should essentially be about increasing your income and decreasing your expenditure?

Basically yes. Take for example Kepa Arrizabalaga at Chelsea. Signed for £70M in 2018 and given a 7 year deal till 2025 so an amortisation of £10M/y.

Once it became clear in about 2020 that the signing was a clear bust, his market value was but a tiny fraction of that initial £70M paid and Chelsea would have had to take a massive book loss if the club had sold him. After two years his remaining book value was still £50M so let's say two years in he was sold for £10M that would have meant instead of continuing with the amortisation £10M/y the club would instead have been forced to write off £40M in losses in a single financial year which could have had more immediate FFP ramifications as compared to continuing with the yearly amortisations and booking the losses over a longer period of time, but at least we'd have saved some money on his wages for the later years of his contract so overall it would have been just short term pain for long term gain (see @TheMagicFoolBus example of Koulibaly).

Though I suppose we wouldn't have been able to find a suitable buyer for Kepa even if we were willing to take the loss thanks to his large salary which no other club would have matched so we were stuck with him regardless.

Wouldn't it actually make a lot more sense if this was based on the balance or money coming in versus money going out, rather than some abstract concept of player book value?

Probably not. The way you're describing it sounds very chaotic. Let's use an example

Year 1: transfer profit £200M
Year 2: transfer loss £200M
Year 3: transfer profit £100M
Year 4: transfer loss £100M

FFP is monitored over a 3 year period. For years 1-3 you'd be posting a net 0 for transfer expenses and the club would pass pass FFP with flying colors (assuming other finances such as wages were in line to pass) but when the monitoring shifts to years 2-4 the club in question could be royally fecked with FFP penalties for being '£200M in the hole' even though they've not actually made any net losses and could even be described to be of a very healthy financial stature. The variance between years could be huge.

The current accounting system for player transfers seems most balanced and definitely the best for long term monitoring of club finances.

 

[justsomebloke]

Okay. Thanks for the several replies above. It is probably abundantly clear to you that you're dealing with someone wholly unversed in accounting, and I appreciate your patience!

I'm satisfied from your replies at least that the current system makes good sense from an accounting perspective (and since FFP is based on accounts, that matters, to say the least). I appreciate that if players are sold for less than they are bought, that represents lost value that has to be written off as a loss in some way, at some point. I take it then that "book value" in effect represents the cost of acquisition rather than the inevitably more problematically vague notion of "sum the asset would fetch if sold".

I'm still not sure this seems like a suitable system, but what do I know. I certainly am not able to describe a better one. Again, thanks for the patience!