[Football] Chelsea avoid failing FFP via loop hole

Nobby Cybergoat · Apr 17, 2024

So is there any recourse for the PL to charge them? Chelsea have now published their accounts.

Is there a window for them to be charged under PSR which has been and gone? Have the PL issued any statements on the matter?

This hotel ruse is obviously a complete sham. Is it one they have got away with? (if so PSR is dead) or are Chelsea waiting to see if charges come?

TomandJerry · Apr 17, 2024

Nobby Cybergoat said:
So is there any recourse for the PL to charge them? Chelsea have now published their accounts.

Is there a window for them to be charged under PSR which has been and gone? Have the PL issued any statements on the matter?

This hotel ruse is obviously a complete sham. Is it one they have got away with? (if so PSR is dead) or are Chelsea waiting to see if charges come?

As far as I understand, they are hoping that the sale of the hotels to themselves get round FFP.

Obviously it comes down to the league to decide to authorize the transaction or not.

If they don't, then they would have breached FFP limits.

Hiheidi · Apr 17, 2024

Nobby Cybergoat said:
So is there any recourse for the PL to charge them? Chelsea have now published their accounts.

It's under scrutiny apparently.

Nathan · Apr 17, 2024

This is just the same as, (not really the same as but...) for example Starlizard being the shirt sponsor for us and pay £100 million a month to do so. I thought they stopped all this parent company and association companies being allowed to spend big into the club they are associated with.

Gazwag · Apr 17, 2024

Nathan said:
This is just the same as, (not really the same as but...) for example Starlizard being the shirt sponsor for us and pay £100 million a month to do so. I thought they stopped all this parent company and association companies being allowed to spend big into the club they are associated with.

Star lizard isn't part of bhafc

Hiheidi · Apr 17, 2024

They haven't stopped associated party transactions, but it has to be proven to be fair market value.

Nathan · Apr 17, 2024

Gazwag said:
Star lizard isn't part of bhafc

I know, but it does have Blooms name associated with it. I think they have closed the loop hole on this, but what I was trying to say is that there isn't much difference between the hotels Chelsea have sold themselves and Starlizard sponsoring BHAFC.

Bozza · Apr 17, 2024

Hiheidi said:
It's under scrutiny apparently.

They don't seem to be investigating the overall transaction, just that the hotels changed hands for a fair value, ie ensuring the value of the assets was not artificially inflated.

I'm no expert in commercial property, but £76m for two hotels in a prime west London location doesn't sound particularly far-fetched to me.

Nobby Cybergoat · Apr 17, 2024

Hiheidi said:
They haven't stopped associated party transactions, but it has to be proven to be fair market value.

OK, so Chelsea to avoid PSR sanction will have to submit that the hotel transaction was for fair market value?

It surely isn't. I can only imagine how would Everton and Forest etc feel if this deal is accepted?

And do you know if associated party transactions also applies to players? So if Newcastle, suddenly start buying top players from the Saudi league for way below their value, would these transactions be covered?

schmunk · Apr 17, 2024

Bozza said:
I'm no expert in commercial property, but £76m for two hotels in a prime west London location doesn't sound particularly far-fetched to me.

It's only one hotel, isn't it? Just with a stupid name (not Chelsea's doing, mind) of "Millennium & Copthorne Hotels".

Hiheidi · Apr 17, 2024

Nobby Cybergoat said:
And do you know if associated party transactions also applies to players? So if Newcastle, suddenly start buying top players from the Saudi league for way below their value, would these transactions be covered?

Man City recently signed a player called Savio from an affiliated club - looks like it's the same deal, and they have to prove fair market value. Although, obviously that can be manipulated!

Man City must provide ‘fair market value’ evidence to Premier League before signing Savio

Tightening of rules covering transfers between parties under same ownership means clubs cannot pay under the market value for a player

www.telegraph.co.uk

halbpro · Apr 17, 2024

Bozza said:
They don't seem to be investigating the overall transaction, just that the hotels changed hands for a fair value, ie ensuring the value of the assets was not artificially inflated.

I'm no expert in commercial property, but £76m for two hotels in a prime west London location doesn't sound particularly far-fetched to me.

Yes, I don't love the PL clubs can still sell assets to related companies to balance FFP but the actual value doesn't seem particularly far fetched. I suppose the fact that Chelsea keeps the revenue streams could negatively affect the value.

Change at Barnham · Apr 17, 2024

Chelsea must be using the same set of accountants as Donald Trump.

Gazwag · Apr 17, 2024

Nathan said:
I know, but it does have Blooms name associated with it. I think they have closed the loop hole on this, but what I was trying to say is that there isn't much difference between the hotels Chelsea have sold themselves and Starlizard sponsoring BHAFC.

I get what you are saying but Starlizard is a business associated with the owner (although I don't think it is now) whereas Chelsea have "sold" a property they actually own to their parent company so they have literally sold it to themselves. Its like BHAFC selling the footballs it owns to BHA Holdings who in effect own BHAFC.

Publius Ovidius · Apr 17, 2024

Hands up anyone who is remotely surprised at this

Driver8 · Apr 17, 2024

Gazwag said:
I get what you are saying but Starlizard is a business associated with the owner (although I don't think it is now) whereas Chelsea have "sold" a property they actually own to their parent company so they have literally sold it to themselves. Its like BHAFC selling the footballs it owns to BHA Holdings who in effect own BHAFC.

Whilst it wasn’t sold to them the Amex is owned by another company that rents it to the football club, both companies owned by BHA holdings. I’m sure there is a good reason for this but I don’t know what it is. It does mean we could never do what Chelsea have done however.

Gazwag · Apr 17, 2024

Driver8 said:
Whilst it wasn’t sold to them the Amex is owned by another company that rents it to the football club, both companies owned by BHA holdings. I’m sure there is a good reason for this but I don’t know what it is. It does mean we could never do what Chelsea have done however.

If the football club fails the stadium won't go down with it

beorhthelm · Apr 17, 2024

Gazwag said:
I get what you are saying but Starlizard is a business associated with the owner (although I don't think it is now) whereas Chelsea have "sold" a property they actually own to their parent company so they have literally sold it to themselves. Its like BHAFC selling the footballs it owns to BHA Holdings who in effect own BHAFC.

sounds like a reverse of the Starlizard buying sponsorship concept. which is why they'll probably get away with it.

Pavilionaire · Apr 17, 2024

If they do nothing then the Premier League are creating a problem for themselves that will never go away, i.e. one rule for the Big Six and one rule for everybody else.

To all intents and purposes, the Big Six ARE the Premier League brand - take those away and where would they be? It's like taking away Johnnie Walker, Smirnoff, Captain Morgan, Tanqueray, J&B and Guinness from Diageo.

People talk about US professional sport having no promotion or relegation, yet the Premier League have - in effect - created that within their league without people noticing because they are distracted by the hype. It's only now that the Emperor's New Clothes are starting to drop.

If Chelsea get away with this then all any oligarch or sheikh has to do now to circumvent PSR is place an appreciating asset within a football club's asset listing then sell that asset back to themselves when necessary. And if that asset happens to be a group of hotels then so much the better.

It won't happen but I wouldn't blame the other 14 clubs for dumping the Premier League and forming a new league of 20 with Leeds, Leicester, Southampton , Norwich, Celtic and Rangers. At least that league would be competitive.

Nobby Cybergoat · Apr 17, 2024

Pavilionaire said:
If Chelsea get away with this then all any oligarch or sheikh has to do now to circumvent PSR is place an appreciating asset within a football club's asset listing then sell that asset back to themselves when necessary. And if that asset happens to be a group of hotels then so much the better.

Or we could do it (not that we need to) Anyone can. PSR would be dead.

If Chelsea qualify for Europe, they would presumably have to also convince UEFA this is a legitimate sale for the puropses of FFP. If UEFA buckle, then FFP is dead as well.

PL and UEFA, surely don't want to give up on PSR and FFP. But they are surely mindful that this is all blatantly headed to court and they don't have the resources to risk losing a major legal battle against a constituent member with in effect unlimited resources

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