For football it is disaster all the way. But maybe for Arsenal we can remain on safer ground
Etihad Airways considering legal action. Am I free to write that?
By Tony Attwood
There are so many times when I am faced with the financial goings on of football clubs that I have to say to myself, “How would I understand any of this without Swiss Ramble” – by far the best regular reviewer of football finances on the planet.
So it was a genuine bombshell when the excellent David Ornstein casually announce that City had been found guilty as if he were putting out another transfer exclusive, ending with “MCFC expected to appeal” before telling us the process was ongong.
Since then we have had redacted summaries of the decision and a general talking up of this being the moment of the football apocalypse, which I suppose it is. If the League kicks the Mancs out, that will reverberate for a decade. If the Mancs hold on, then the League and its clubs will know that every football rule and UK law can be challenged.
And then what? Well, we’d know who will win the League each season before we start. Then I suspect some clubs would resign and set up a new league without the Manc. That would give Europe something to ponder – for it might encourage other clubs that could lay their hands on billions of pounds to have a bash at taking the Mancs on. But football as we know it would be over, because the League would have lost control of, well, basically, the league. I would expect that big six and others to leave the Premier League and set up a new league with rules that could not be challenged in court.
But for now we are sitting on a problem. If the Mancs have “irrefutable evidence”, why don’t they just publish it and end all this bickering?
The League says it has details of “how the club systematically broke Premier League Rules for nearly a decade.” The club says “no we didn’t.”
Now I have mentioned before I was chair of a very modest sized plc for many years so I had the job of signing off accounts and talking with our auditors. We never played fast and loose with the Revenue because I thought we were better at making money legally than we were at trying to run rings round Inland Revenue.
But supposing ManC thought what they did was ok but their financial advisers (as they most certainly should have done), expressed a certain concern saying something like, “I am really not sure if the football and/or tax and/or government authorities will agree with this.” Then the correct procedure would be to put the details to the UK football and UK tax authorities and ask for a ruling. And I feel I know a bit about this because three times as chair of the plc I founded, I did exactly that. We put forward a case, the local tax inspectorate had one view, we had another, and it was argued out. As it happened we won, but had we lost we would have paid up and changed our approach.
Now this situation did not arise because we were crooks – it is because the rules are often complex, some inspectors are inexperienced and companies are forever coming up with new approaches.
But even if that is what happened to ManU the club and its owners then had an absolute duty to go to Revenue and Customs, and to the Premier League and say (and of course here I simplify and summarise) “Our owners want to top up the money given to us by our sponsors, with some of their own money. Can we lump it all together as sponsorship money?” And then Revenue and Customs on the one hand and the League on the other would have given a clear answer, which would have stopped any further argument.
It is such a simple thing to do one can’t see why they didn’t do it, get the answer in writing, ensuring the authorities would have details of the case and discussion. They were asked for guidance, and gave it, and the company operated according to that advice. (Unless ManC did get that advice, and ignored it).
And this is where it seems to me that the whole ManC situation falls down. All you have to do is get an answer from the authorities, and if you don’t like it, appeal. In the ManC case the authorities are the footballing authorities and the taxation authorities, and all ManC had to do was to put their proposals to each. If the club had not liked the answer, it could have taken the issue to court to see if the approach of the authorities was in fact in keeping the the legislation.
But they didn’t do any of that, as far as I can see – because if they had they would have surely by now said, “But back in [date] we got a letter saying that topping up sponsorship payments was not against the rules”. And that’s it.
Why the owners of the Mancs did not ask, but it does seem to me to be a big problem within the ManC case. The could have gone to the footballing authorities and said, “our sponsor can’t pay all the agreed sponsorship money, so we’re putting some in ourselves – is that OK?” And then with that answer they could move forward secure in the knowledge that everything was indeed OK.
So my point is, ManC could have asked Revenue and Customs to give a view, on what they proposed to ensure they did not break the rules.
Especially since Uefa banned the Mancs from Europe in 2020 for overstating sponsorship revenue. In that case the Court of Arbitration for Sport rejected the ban on the grounds that the alleged breaches were either not established or time-barred. That case meant that there can be no doubts that ManC and their lawyers knew the rules and processes. So why didn’t they use them this time?
That case, however, also told ManC that the League, their rivals, and indeed the mighty Revenue and Customs, were watching them. If I had been running the club at that point my rules would have been, “First do everything by the book, and second if you do have a bright idea, make sure Revenue and Customs on the one hand and the football authorities on the other, tell you it is all ok. And get that in writing.
The Soccerlinks Hit List
The Soccerlinks Hit List