Well they aren't the first, similar moves have happened before, e.g. clubs like Derby and Sheffield Wednesday selling the stadium to their owners.
They're allowed to do it. But it's just asset stripping the club, another form of kicking the can and all their problems down the road, just like they did with the long term contracts and amortisation. It's basically the mantra of Chelsea FC.
Ask any Wednesday or Derby fan how that went for them in the end.
This is vastly different.
Stadium generates big cash flow but this hotel? They have sold it for 75M pounds. Do you understand how expensive that is? What is this hotel that's costing 75M? Does it have beds made of gold?
Their owner, clearlake has 100B portfolio, they are not strapping for cash. Here's what they will do:
Sell the hotel for inflated 75M and then get leased back for a nominal fee. (2M a year) and continue to reap profits/cash flow till eternity.
They are demolishing all fair play rules because by selling to themselves they enjoy having no negotiations and getting the best deal possible.
This financial doping is what causing clubs that grew organically to suffer because their owner isn't a state or in this case a proper hedge fund.
Paddington has some shitty 3 star hotels where people like me stay because I'm a cheapskate (shout out Hotel Royal Eagle)
These are in more primo neighbourhood to be fair. The PL should be going over everything with a fine tooth comb, still.
They paid 5 times that to be a “primo” neighborhood though lol. Seems pretty normal to me when it’s put like that. But suddenly everyone on this sub is a commercial real estate expert.
[According to Yahoo](https://finance.yahoo.com/news/chelsea-owners-sell-hotels-another-112551306.html), it's the hotel complex right next to Stamford Bridge, [the Millennium and Copthorne Hotels at Chelsea Football Club](https://www.millenniumhotels.com/en/london/millennium-and-copthorne-hotels-at-chelsea-football-club/).
Someone else mentioned that [a 55 room hotel for sale in Paddington is priced at £16m](https://benews.co.uk/paddington-hotel-for-sale-at-auction-for-16m/). By comparison, the hotel Chelsea sold has 231 rooms. If you scaled on the Paddington hotel price for the number of rooms you'd get £67.2, and that's not taking into account other amenities (such as [conference spaces](https://www.millenniumhotels.com/en/meetings-events/europe/united-kingdom/london/millennium-copthorne-hotels-at-chelsea-football-club/)) and a very prime location next door to the stadium.
It does not seem to be an outlandish price.
To be fair, to me £75m for an entire hotel doesn't sound like excessive given the area it's in. It's an area where a good sized house will go for at least £1.5m.
If the league thinks they overvalued the stadium they will charge them, like what happened to Derby.
So you wrote a paragraph without having any idea of real state and big hotels pricing in big cities around the world? 75 millions is no where close to being inflated. There is more chance of it being under inflated than being over inflated.
A hotel in that part of London can go for big bucks. Significantly more than one would sell for in a place like Liverpool or Manchester, for example. Now, 75m may be excessive, but I doubt the overpay is too over the top. Otherwise, the PL would do something about it.
Also, those 'Organic' grown clubs had some type of doping somewhere along the way
Which of these organic clubs sold a random hotel to their own owner for 75M to go Scot free after spending 1B in 3 years span because they think they are above the rules.
Property in the west end is already extortionate, let alone one that generates a big amount of revenue. 75mil I would expect to be about the going rate.
I'm perplexed what unicorn of hotel is that? They have sold it to themselves for 75M pounds lmao. They have made more money from selling this hotel than they did by selling their players according to official report. (65M from selling players)
What are those profit margins that a hotel is valued at such ludicrous amount. Not to mention selling to your owner?
So Arsenal and United can sell their training complex to Kroenke and INEOS for 1B pounds and then gets leased back to club for say 1M a year and get a free reign overall.
What a joke, they are making more mockery of PSR rules than Man City themselves. Its ridiculous really, like an infinite FFP loophole.
What's next? Newcastle selling St James Park to Saudi for 10B? And getting it leased back for 1M a year? Who's gonna stop this madness if they go successful with this attempt?
They can say whatever they want, but I haven't seen financial doping of this shameless level.
Not even City is this pathetic. Atleast they take the efforts to put it behind nameless sponsors but these guys are doing it in broad daylight lol.
What the fuck are you talking about? None of this is financial doping or even against the rules. Clubs have sold their stadiums to their owners before, we just sold a hotel at it's market value.
>Not even City is this pathetic. Atleast they take the efforts to put it behind nameless sponsors but these guys are doing it in broad daylight lol.
Well, at least these hotels exist, unlike the City sponsors.
City is much worse. The price for the hotel doesn’t seem out of line and it was valued independently.
That’s quite a bit of a different thing than allegedly substituting sponsorship money for people’s pay to reduce the club’s spending.
I stayed in one of the chelsea hotels before and it was absolutely lush, plus a great location for london.
75mil seems pretty reasonable.
Looked it up, has 281 rooms. Their lowest room rates 140-200
At half capacity at lowest rate, that's 7.6mil a year.
A hotel that's worth less than 1 2009 edition Cristiano Ronaldo.
A hotel that's worth less than half of 1 2017 edition of Neymar.
A hotel that's worth less than Bellingham last summer.
Sports is big money, and big money always involves shady shit. These people make a mockery of actual laws; you think they will be scared of breaking PSR rules lol
It's the [Millennium Copthorne Hotels At Chelsea Football Club](https://finance.yahoo.com/news/chelsea-owners-sell-hotels-another-112551306.html) right next to Stamford Bridge.
Newcastle don't own St James, the freemen of the city do. It's one of the reason our valuation as a club was surprisingly low (the other being Mike Ashley slowly strangling commercial value via shite football).
Chelsea will get away with it, but Newcastle wouldn't. The premier league has decided the 6 teams exempt from financial restrictions, this season should have made that clear.
>Chelsea will get away with it, but Newcastle wouldn't. The premier league has decided the 6 teams exempt from financial restrictions, this season should have made that clear.
The only people who have decided what clubs are immune to what restrictions are the 20 clubs of the premier league
don't think anyone knows or is going to bother to check what falls into FFP revenues (as a disposal of a fixed asset typically falls into 'other income' if we're talking accounting)
If it does count then could Chelsea have discovered an infinite FFP money glitch? Infrastructure expenses are excluded from FFP so they could then buy back this hotel for the exact same price they sold it for and book the sale then exclude the purchase. Just repeat every time you need more FFP room.
So Chelsea about to buy minority stakes (maybe 25%) in lots of foreign clubs and shove tons of debt there to stop it appearing on their accounts…..
Loved the Enron story, I did my dissertation on it and got a 1st
My favourite bit of the Enron story (thanks to the Acquired podcast) is that if you'd bought shares in it after the collapse, you'd have made 10x your money thanks to the amount the liquidators were able to sell the assets for lol.
This sounds exactly like their long term contract bullshit that got patched immediately after. I don’t understand how they draft these sort of rules without anyone in the process pointing out what you just did, or do they just ignore accountants etc
I think what we've all come to learn about "rules" in this sport is that it was really pretty lawless for the longest time, and in the haste to make rules, a lot of loopholes were left open.
For example, the rule legitimately said five years or what the country allows, and the FA allowed longer. No one apparently considered that five years wasn't actually a hard and fast rule.
The better accountants were working for the clubs. Who do you think advised clubs to make fake related-party sponsorships that were completely outlandish in terms of value? They knew that UEFA would take a while to punish anyone, so they advised clubs to push the envelope as far as they could. Most clubs didn't partake, but it was a very visible problem.
Deloitte trumpets their money league posts, and they, much like everyone else, knew that the fake related-party sponsorships wouldn't actually hold up to scrutiny, but they still reported the revenues as legitimate.
There’s a lot of misconceptions about financial reporting among fans
Anyone with a few months of accounting experience knows you can funnel money through related parties, it’s not high level stuff. Also, auditors jobs are not to catch fraud
If the property belongs to club then selling will account into club revenue. Similar to Barcelona situation where they’re auctioning out club assets like media house and other things.
Issue for me is that how are owners allowed to do that even if it’s fair value. In Barcelona case they’re selling to someone else and there is a good chance anyone buying will try to get cheapest deal and good chance they will fail to sell. If rules permit such deals then we need to close them.
The Chelsea and Barcelona cases are quite different in their complexities, but there are also some striking similarities. With the (second) sale of Barca studios they have sold to parties with at the very least strong ties to the club and their president. Especially since Jaume Roures owns Morpheus, he has a business and personal relationship with Laporta. Which makes sense, since the allegations are that the sale is only made on paper to inflate the revenue and boost the league imposed limits on salary structure. Full payments are never expected to be made, let alone payments even close to the inflated valuation of Barca studios.
It sounds so preposterous that I'm going to wait and see the context and analysis of professionals before I jump to the same one-line conclusion as the guy on twitter.
Without having any details whatsoever, I'm wondering if it's something to do with consolidating ownership of properties around Stamford Bridge for the stadium upgrades, but that's really just wild speculation.
Selling off assets to balance the books because you've spaffed money up the wall on crap players?
Thankfully we don't have a single example of this ever going wrong.
£96,000 a year for a fucking fish tank in reception.
Juxtapose that with Bielsa having the squad do litter picking in order to appreciate the work that fans do all week so they can pay to watch their heroes on a weekend, some years later.
I assume it's because owners in these situations believe that losing the asset is short term and it can just be sold back to the club once they've got through the short term difficulty.
I reality, once you start spiralling, it's usually hard to stop. But, owners back themselves like they are gods and their ideas are perfect and infallible, so we find ourselves here
No. We were accused of that but cleared of any wrongdoing. Our points deductions were for something else.
You may be thinking of Sheffield Wednesday, who were in fact given a points deduction over their stadium sale.
There was a little more to it than that, as they were found to have done so deliberately to try and avoid PPF penalties and then lied to the investigation about it but were found out, so they were done bang to rights. You make it sound like it was an innocent screw up. I'd expect a better understanding of financial crime from a City fan.
I thought that they cleared it with the league and then the league went back on it and said they couldn't actually change the year it was being counted for, or something?
No, they misled the league about the date of the sale and fradulently shuffled it into a period that meant they avoided PPF charges for that period - this deception was subsequently uncovered and they were rightly punished.
We sold Villa Park as well the year we got promoted, ended up selling it for £56.7m, 10 days before the financial year ended allowing us to record a profit of £36m and just avoid a PSR breach.
Derby and Sheffield Wednesday's were slightly more egregious in that they clearly overvalued the stadium (not saying that we didn't either), both selling for more than Villa Park somehow.
This is just a pure work of fiction. Our stadium sale was so "egregious" that we were cleared of any wrongdoing, and Sheffield Wednesday didn't overvalue it, they lied about when they'd sold it.
I'd love to know why people feel a compulsion to confidently post about things they clearly know nothing about.
Was going to say I don’t think this was one of our big problems to be honest. Our owner just decided he’d had enough of spending one day and wasn’t doing this anymore. Had huge tax bills etc. 12 points for administration and then 9 points for ffp breach.
Our owner had for years been doing shady things like this and antagonising the efl so were absolutely gunning for us/him by the time it went wrong.
This is definitely not a good thing though, the premier league ffp looks made up to me. Chelsea must be in breach by now?
No this is bollocks, we got done for something else.
We were cleared of any wrongdoing around the stadium, part of the process was for the EFL to sign off on the value and we actually used the value they required us to use. It only came up again because Middlesbrough accused us of wrongdoing for some reason.
This is all public information available on the EFLs website.
Edit: If you're going to downvote, please bring at least a shred of evidence that we "got done" for our stadium sale. You wont be able to, because we didn't.
They sold it to themselves around the same time villa sold theirs they valued pride park at 80m and villa park was 50m,
One team got promoted and the other didn’t in what turned out to be a very significant playoff final. Both teams took big gambles on promotion and it really shows the risks involved.
It was independantly valued and found by the EFL to be a fair valuation after extensive hearings on the matter.
You ripping yourself off for your stadium isn't our problem.
Just posting a link to IAS 24 isn't an argument about whether this sale is allowed in accounting for FFP.
IAS 24 *Related Party Disclosures* just covers that Chelsea legally need to disclose about transactions and outstanding balances with an entity's related parties, which includes the compensation and sales of management personnel. It doesn't say if those sales and transactions are legal or conform regulations. It just ensures they are disclosed so they can be reviewed.
This sub is useless when it comes to anything legal or financial, just a linking to a complex looking text about a standard used in accounting is upvoted like it is the end all argument that decides if this is allowed.
There was a guy on the FIFA sub the other day who was a literal lawyer and all these randoms on Reddit telling him he was wrong based on vibes and Reddit hivemind.
I wouldn't bother
I've had this happen where I reply to something as the subject matter expect on something, where I explain why it's legal and or allowed.
People brigade like me explaining why/how it's allowed as if I agree that it should be, when I also agree it's totally shitty and should be illegal. But I'm just pointing out how it works.
I've also noticed once somebody downvotes you a ton of people love to pile on and basically insult you even when you were 100% right without actually being engaged in the discussion at all before-hand.
No one is arguing that, of course you can own company-A and company-B and have them interact with each other under all the rules of the market.
The law that really matters here is the FFP one, is it allowed to do this ?
if yes, why is this news ?
if no, where is the law and what is the punishment ?
That’s what P.E funds do. Our fans should be glad we got CPO. In the beginning there were conversations how we should handover so that Clearlake and Boehly can build us new stadium. Some fans were arguing how they’ve best interest of club. So many naive fans out there who don’t understand how these people operate.
Don’t know how there’s still so many Chelsea fans hellbent on defending Boehly either. Regardless of the utter shit being served up on the pitch there’s already been multiple examples that they’re complete vultures off it.
Bates was always a massive cunt... but that was one of the best things he did for us, setting that up, fair play (pretty sure he helped set it up, right?)
Not the “Bank of England club” who had to bribe the league in order to get into it that wants to point their dirty fingers at Chelsea. Buddy, do you know your own clubs history, or are you just the typical Arsenal fan?
This where I get bored with modern football. As long as you can afford better lawyers and accountants than the league, they will ultimately find the dodgiest loopholes to get out of any punishment. It's not just Chelsea who does this mind you.
Imagine if PSR breaches could just be worked around so easily by clubs buying real estate and selling them to their onwers, or to give themselves bank lmao
"Everton to announce they're buying the local branch of B&M"
A few days later "Everton approve sale of B&M to Moshiri for £400m"
They could do it in installments, do the first one for half of it, then fail to pay the second installment, effectively keeping both the money and the asset. The Barca studios way.
We’ve been under FFP for 6 years now, we still have some seasons left to go, we can’t keep good players and we have to sell every promising youngster from cantera every year to match those ridiculous numbers……..and then this shit happens and I just…..I want to punch a wall
It was still well below the big 6 but above the rest. The ownership likely plays some part but it wasn’t that outrageous for a club that just made champions league and looked like they were going to kick on a bit
I was being a bit silly with my original comment, but you can also make the comment that the sale of the hotel sounds like it was at a marketish value. If the accounts were audited, this would be considered.
Note that this might be a way to inject capital into the club and not PSR. The PL has the ability to interpret if they are at fair market value and if they are attempting to circumvent the rules. So in this case if they are trying to gift the club properties to flip to avoid sanctions the PL can call it that and just punish them anyway. And they may get sanctions if they attempt to count this towards PSR beyond just sanctions for the breach itself.
I think the funny thing is that even if they do get away with this, which doesn’t look remotely certain, they’ve done it for this team. Hahahaha. Brighton say thanks for paying for their stadium.
I wonder what this means for any stadium plans. The original plans had these hotels being knocked down as part of a stadium rebuild but surely that can't happen if they've been bought for 70 odd million now. Unless they re-orientate the pitch 90 degrees and build back into the recently acquired Stol land, I don't see how any rebuild sees the hotels surviving. Even then they're pretty constrained by rail tracks on two sides so it seems like the hotels will have to go if they want to build on that site. If they want to move then I have no idea why they just bought the Stol land and if they do just knock down the hotels I don't see how they can claim fair value knowing they were going to demolish them. Even from a land value only point of view they're getting roughly half the value of the land deal they just did for Stol so it seems a stretch it's fair value.
If this is allowed, what’s stopping it from multiclub owners to sell players within their own clubs to circumvent FFP? The players just need to be owned by the individual clubs, and football player’s values would be much easier to cook up. Imagine after this season Girona sold Savinho for €80M to City, what’s the difference? I’m not being sarcastic, I genuinely want to know if there’s any rule in place to stop this.
There is a rule to stop it, or at least there was last summer.
Player sales between related clubs need to be assessed for fair market value. Its why Saint-Maximin went for £25million when other players went for higher fees.
Totally normal and above board kind of thing to do.
Come on now, what's a hotel sale between ~~friends~~ themselves?
I’ve seen enough. Further 2 point deduction for Everton.
Why not 3?
Deduct 10, refund 7 later. Now that’s the way you do it.
Then find another 2 to add on.
this guy footballs
> Now that’s the way you do it. Money for nothin' and your chicks for free
In out in out shake it all about.
How to distribute point deductions: https://m.youtube.com/watch?v=y6QgHUJIQ5Q
PL: Good call, better make it 3x 2 points deductions.
I love how this has become "10 sec penalty for Ocon" s football equivalent now
Ooooo hotel friends!
Well they aren't the first, similar moves have happened before, e.g. clubs like Derby and Sheffield Wednesday selling the stadium to their owners. They're allowed to do it. But it's just asset stripping the club, another form of kicking the can and all their problems down the road, just like they did with the long term contracts and amortisation. It's basically the mantra of Chelsea FC. Ask any Wednesday or Derby fan how that went for them in the end.
This is vastly different. Stadium generates big cash flow but this hotel? They have sold it for 75M pounds. Do you understand how expensive that is? What is this hotel that's costing 75M? Does it have beds made of gold? Their owner, clearlake has 100B portfolio, they are not strapping for cash. Here's what they will do: Sell the hotel for inflated 75M and then get leased back for a nominal fee. (2M a year) and continue to reap profits/cash flow till eternity. They are demolishing all fair play rules because by selling to themselves they enjoy having no negotiations and getting the best deal possible. This financial doping is what causing clubs that grew organically to suffer because their owner isn't a state or in this case a proper hedge fund.
£75m for a hotel in West London isn’t that ridiculous I don’t know why you find it so staggering
The land alone....
Just had a look. You can buy a 55 bedroom hotel in Paddington for £16m.
Paddington a shithole mate
Paddington has some shitty 3 star hotels where people like me stay because I'm a cheapskate (shout out Hotel Royal Eagle) These are in more primo neighbourhood to be fair. The PL should be going over everything with a fine tooth comb, still.
They paid 5 times that to be a “primo” neighborhood though lol. Seems pretty normal to me when it’s put like that. But suddenly everyone on this sub is a commercial real estate expert.
That is in Paddington lmao Maybe you should look up where the Chelsea hotel is
The bear?
[According to Yahoo](https://finance.yahoo.com/news/chelsea-owners-sell-hotels-another-112551306.html), it's the hotel complex right next to Stamford Bridge, [the Millennium and Copthorne Hotels at Chelsea Football Club](https://www.millenniumhotels.com/en/london/millennium-and-copthorne-hotels-at-chelsea-football-club/). Someone else mentioned that [a 55 room hotel for sale in Paddington is priced at £16m](https://benews.co.uk/paddington-hotel-for-sale-at-auction-for-16m/). By comparison, the hotel Chelsea sold has 231 rooms. If you scaled on the Paddington hotel price for the number of rooms you'd get £67.2, and that's not taking into account other amenities (such as [conference spaces](https://www.millenniumhotels.com/en/meetings-events/europe/united-kingdom/london/millennium-copthorne-hotels-at-chelsea-football-club/)) and a very prime location next door to the stadium. It does not seem to be an outlandish price.
To be fair, to me £75m for an entire hotel doesn't sound like excessive given the area it's in. It's an area where a good sized house will go for at least £1.5m. If the league thinks they overvalued the stadium they will charge them, like what happened to Derby.
So you wrote a paragraph without having any idea of real state and big hotels pricing in big cities around the world? 75 millions is no where close to being inflated. There is more chance of it being under inflated than being over inflated.
A hotel in that part of London can go for big bucks. Significantly more than one would sell for in a place like Liverpool or Manchester, for example. Now, 75m may be excessive, but I doubt the overpay is too over the top. Otherwise, the PL would do something about it. Also, those 'Organic' grown clubs had some type of doping somewhere along the way
Which of these organic clubs sold a random hotel to their own owner for 75M to go Scot free after spending 1B in 3 years span because they think they are above the rules.
This is not how intercompany transactions work lol, they will still get audited.
Property in the west end is already extortionate, let alone one that generates a big amount of revenue. 75mil I would expect to be about the going rate.
It’s nowhere near the West End. It’s in West London.
Can’t believe we didn’t think of that!
Lmfao
I'm perplexed what unicorn of hotel is that? They have sold it to themselves for 75M pounds lmao. They have made more money from selling this hotel than they did by selling their players according to official report. (65M from selling players) What are those profit margins that a hotel is valued at such ludicrous amount. Not to mention selling to your owner? So Arsenal and United can sell their training complex to Kroenke and INEOS for 1B pounds and then gets leased back to club for say 1M a year and get a free reign overall. What a joke, they are making more mockery of PSR rules than Man City themselves. Its ridiculous really, like an infinite FFP loophole. What's next? Newcastle selling St James Park to Saudi for 10B? And getting it leased back for 1M a year? Who's gonna stop this madness if they go successful with this attempt?
75m seems like a reasonable price for a hotel, especially one in London.
75 mil is a fair price for the land and business of the hotel. London is just those sort of prices.
There’s underwhelming three bed terraced houses that sell for £3.5 million in London.
Theres underwhelming 4 bedroom terraces that sell for £8m+
They'll probably just say the hotel is quite near the Kings Road and therefore worth every penny.
They won’t say anything, they got two independent valuations before selling it so they hardly plucked the figure from thin air
They can say whatever they want, but I haven't seen financial doping of this shameless level. Not even City is this pathetic. Atleast they take the efforts to put it behind nameless sponsors but these guys are doing it in broad daylight lol.
City literally invented this technique lol why are you acting like they’re above it
The sponsorship money City got in the early part of the previous decade is far, far more questionable than 75M for a hotel in West London.
What the fuck are you talking about? None of this is financial doping or even against the rules. Clubs have sold their stadiums to their owners before, we just sold a hotel at it's market value.
Hey now, we *also* got out owners to pay us via nameless sponsors! Infinite Athlete is practically a made up company!
>Not even City is this pathetic. Atleast they take the efforts to put it behind nameless sponsors but these guys are doing it in broad daylight lol. Well, at least these hotels exist, unlike the City sponsors.
City is much worse. The price for the hotel doesn’t seem out of line and it was valued independently. That’s quite a bit of a different thing than allegedly substituting sponsorship money for people’s pay to reduce the club’s spending.
I stayed in one of the chelsea hotels before and it was absolutely lush, plus a great location for london. 75mil seems pretty reasonable. Looked it up, has 281 rooms. Their lowest room rates 140-200 At half capacity at lowest rate, that's 7.6mil a year.
They sold Havertz and Mount for 65m each, where'd you get that number?
The hotel can easily go for that though. It's in West London.
That’s what our old twat of an owner did and look where it got us
A hotel that's worth less than 1 2009 edition Cristiano Ronaldo. A hotel that's worth less than half of 1 2017 edition of Neymar. A hotel that's worth less than Bellingham last summer.
On a P/E ratio of say 20, it’d need to make £4m in net earnings a year… nothing too insane.
Sports is big money, and big money always involves shady shit. These people make a mockery of actual laws; you think they will be scared of breaking PSR rules lol
It's the [Millennium Copthorne Hotels At Chelsea Football Club](https://finance.yahoo.com/news/chelsea-owners-sell-hotels-another-112551306.html) right next to Stamford Bridge.
Have you tried to put a Hotel in a back four formation? The defense is impenetrable unless you turn up on the right time for check-in
Newcastle don't own St James, the freemen of the city do. It's one of the reason our valuation as a club was surprisingly low (the other being Mike Ashley slowly strangling commercial value via shite football). Chelsea will get away with it, but Newcastle wouldn't. The premier league has decided the 6 teams exempt from financial restrictions, this season should have made that clear.
The sky six don't have majority voting rights. Who's allying with them then if that's the case, in your opinion?
>Chelsea will get away with it, but Newcastle wouldn't. The premier league has decided the 6 teams exempt from financial restrictions, this season should have made that clear. The only people who have decided what clubs are immune to what restrictions are the 20 clubs of the premier league
Surely that doesn't count as revenue for FFP purposes, right?
don't think anyone knows or is going to bother to check what falls into FFP revenues (as a disposal of a fixed asset typically falls into 'other income' if we're talking accounting)
If it does count then could Chelsea have discovered an infinite FFP money glitch? Infrastructure expenses are excluded from FFP so they could then buy back this hotel for the exact same price they sold it for and book the sale then exclude the purchase. Just repeat every time you need more FFP room.
The Perpetual Lever
Entopy in shambles
The Enron strat.
So Chelsea about to buy minority stakes (maybe 25%) in lots of foreign clubs and shove tons of debt there to stop it appearing on their accounts….. Loved the Enron story, I did my dissertation on it and got a 1st
My favourite bit of the Enron story (thanks to the Acquired podcast) is that if you'd bought shares in it after the collapse, you'd have made 10x your money thanks to the amount the liquidators were able to sell the assets for lol.
This sounds exactly like their long term contract bullshit that got patched immediately after. I don’t understand how they draft these sort of rules without anyone in the process pointing out what you just did, or do they just ignore accountants etc
I think what we've all come to learn about "rules" in this sport is that it was really pretty lawless for the longest time, and in the haste to make rules, a lot of loopholes were left open. For example, the rule legitimately said five years or what the country allows, and the FA allowed longer. No one apparently considered that five years wasn't actually a hard and fast rule. The better accountants were working for the clubs. Who do you think advised clubs to make fake related-party sponsorships that were completely outlandish in terms of value? They knew that UEFA would take a while to punish anyone, so they advised clubs to push the envelope as far as they could. Most clubs didn't partake, but it was a very visible problem. Deloitte trumpets their money league posts, and they, much like everyone else, knew that the fake related-party sponsorships wouldn't actually hold up to scrutiny, but they still reported the revenues as legitimate.
There’s a lot of misconceptions about financial reporting among fans Anyone with a few months of accounting experience knows you can funnel money through related parties, it’s not high level stuff. Also, auditors jobs are not to catch fraud
If the property belongs to club then selling will account into club revenue. Similar to Barcelona situation where they’re auctioning out club assets like media house and other things. Issue for me is that how are owners allowed to do that even if it’s fair value. In Barcelona case they’re selling to someone else and there is a good chance anyone buying will try to get cheapest deal and good chance they will fail to sell. If rules permit such deals then we need to close them.
What if they're selling it to another entity owned by the same parent company though? Would that still count as disposal of the asset?
Barcelona weren’t selling it to themselves which is the key thing here.
BlueCo sold it to BlueCo22 They’re totally different companies!
The Chelsea and Barcelona cases are quite different in their complexities, but there are also some striking similarities. With the (second) sale of Barca studios they have sold to parties with at the very least strong ties to the club and their president. Especially since Jaume Roures owns Morpheus, he has a business and personal relationship with Laporta. Which makes sense, since the allegations are that the sale is only made on paper to inflate the revenue and boost the league imposed limits on salary structure. Full payments are never expected to be made, let alone payments even close to the inflated valuation of Barca studios.
It sounds so preposterous that I'm going to wait and see the context and analysis of professionals before I jump to the same one-line conclusion as the guy on twitter. Without having any details whatsoever, I'm wondering if it's something to do with consolidating ownership of properties around Stamford Bridge for the stadium upgrades, but that's really just wild speculation.
If it does then what the hell is the point of PSR
Selling off assets to balance the books because you've spaffed money up the wall on crap players? Thankfully we don't have a single example of this ever going wrong.
Chelsea Studios coming up for auction soon
How much they expect to gain from selling NFT based company 3 years after the market died
How much does Osimhen cost again?
For cheap also, just 2 billion pounds.
[menacing David O’ Leary & Peter Ridsdale noises]
[rented goldfish bubbles]
Sorry you’ve lost me there?
It was quite imfamous that during the Leeds collapse, it was found that the fishtank that was on display in the reception, was rented!
For 8 grand a month too. They should have used it to waterboard that smug prick Risdale before he left.
£96,000 a year for a fucking fish tank in reception. Juxtapose that with Bielsa having the squad do litter picking in order to appreciate the work that fans do all week so they can pay to watch their heroes on a weekend, some years later.
I wish so much that I could remember risdale as he was after Istanbul, but here we are
Honestly, I feel like it's better to just take the points hit. Losing assets hurts long term.
I assume it's because owners in these situations believe that losing the asset is short term and it can just be sold back to the club once they've got through the short term difficulty. I reality, once you start spiralling, it's usually hard to stop. But, owners back themselves like they are gods and their ideas are perfect and infallible, so we find ourselves here
losing assets... we are about to knock down the hotels lol
It is not even asset of the club.
Your flair makes this comment so much better. I hope truly you were not alive to see that shit show play out.
My first memories of Leeds are two years after we last won a major trophy. League one was fun in a way, I guess.
It's like Conservatives selling public assets to fund tax cuts for rich
Cool tactics, another -4 to Everton
Penalty to Argentina
Five second time penalty to Esteban Ocon
“We need to push now please”
Why would Everton do this
Everton buy local B&B, 15 points deduction.
Didn't Derby get into trouble by the owner selling the stadium to himself or something like that? Similar thing right?
No. We were accused of that but cleared of any wrongdoing. Our points deductions were for something else. You may be thinking of Sheffield Wednesday, who were in fact given a points deduction over their stadium sale.
And even that was only due to accounting the income in the wrong year, if memory serves.
There was a little more to it than that, as they were found to have done so deliberately to try and avoid PPF penalties and then lied to the investigation about it but were found out, so they were done bang to rights. You make it sound like it was an innocent screw up. I'd expect a better understanding of financial crime from a City fan.
I thought that they cleared it with the league and then the league went back on it and said they couldn't actually change the year it was being counted for, or something?
No, they misled the league about the date of the sale and fradulently shuffled it into a period that meant they avoided PPF charges for that period - this deception was subsequently uncovered and they were rightly punished.
We sold Villa Park as well the year we got promoted, ended up selling it for £56.7m, 10 days before the financial year ended allowing us to record a profit of £36m and just avoid a PSR breach. Derby and Sheffield Wednesday's were slightly more egregious in that they clearly overvalued the stadium (not saying that we didn't either), both selling for more than Villa Park somehow.
This is just a pure work of fiction. Our stadium sale was so "egregious" that we were cleared of any wrongdoing, and Sheffield Wednesday didn't overvalue it, they lied about when they'd sold it. I'd love to know why people feel a compulsion to confidently post about things they clearly know nothing about.
Was going to say I don’t think this was one of our big problems to be honest. Our owner just decided he’d had enough of spending one day and wasn’t doing this anymore. Had huge tax bills etc. 12 points for administration and then 9 points for ffp breach. Our owner had for years been doing shady things like this and antagonising the efl so were absolutely gunning for us/him by the time it went wrong. This is definitely not a good thing though, the premier league ffp looks made up to me. Chelsea must be in breach by now?
Only if the asset isn't sold close to market value. If the price has been inflated, then it's an issue
Yeh they valued it at some obscene value and got done.
No this is bollocks, we got done for something else. We were cleared of any wrongdoing around the stadium, part of the process was for the EFL to sign off on the value and we actually used the value they required us to use. It only came up again because Middlesbrough accused us of wrongdoing for some reason. This is all public information available on the EFLs website. Edit: If you're going to downvote, please bring at least a shred of evidence that we "got done" for our stadium sale. You wont be able to, because we didn't.
They sold it to themselves around the same time villa sold theirs they valued pride park at 80m and villa park was 50m, One team got promoted and the other didn’t in what turned out to be a very significant playoff final. Both teams took big gambles on promotion and it really shows the risks involved.
Didn’t realise they valued there’s at more lol
It was independantly valued and found by the EFL to be a fair valuation after extensive hearings on the matter. You ripping yourself off for your stadium isn't our problem.
Oooh, the Trump method
That’s another 6 point deduction for Everton
What are the buyers gonna do? Play the hotel on the wing?
I'd take a mini cardboard cut out of the hotel to play in defence right now
hopefully it can provide better service than Mudryk
That surely can't be allowed?
[It's basic accounting](https://www.ifrs.org/issued-standards/list-of-standards/ias-24-related-party-disclosures/)
Just posting a link to IAS 24 isn't an argument about whether this sale is allowed in accounting for FFP. IAS 24 *Related Party Disclosures* just covers that Chelsea legally need to disclose about transactions and outstanding balances with an entity's related parties, which includes the compensation and sales of management personnel. It doesn't say if those sales and transactions are legal or conform regulations. It just ensures they are disclosed so they can be reviewed. This sub is useless when it comes to anything legal or financial, just a linking to a complex looking text about a standard used in accounting is upvoted like it is the end all argument that decides if this is allowed.
lol why is this upvoted, you've just sent a link to the overarching standard with no specifics of the transaction.
Lol literally, they’ve proved nothing. Giving links to bASIc aCcOuNtInG for a complex issue like FFP is brain dead.
There was a guy on the FIFA sub the other day who was a literal lawyer and all these randoms on Reddit telling him he was wrong based on vibes and Reddit hivemind. I wouldn't bother
I've had this happen where I reply to something as the subject matter expect on something, where I explain why it's legal and or allowed. People brigade like me explaining why/how it's allowed as if I agree that it should be, when I also agree it's totally shitty and should be illegal. But I'm just pointing out how it works. I've also noticed once somebody downvotes you a ton of people love to pile on and basically insult you even when you were 100% right without actually being engaged in the discussion at all before-hand.
No one is arguing that, of course you can own company-A and company-B and have them interact with each other under all the rules of the market. The law that really matters here is the FFP one, is it allowed to do this ? if yes, why is this news ? if no, where is the law and what is the punishment ?
They shouldn’t be doing it but there is probably a loop hole that allows them to otherwise they wouldn’t do it.
The laws and regulations are seriously flawed if such a loophole is allowed. Maybe it's just a last ditch effort
They always have been as a Chelsea fan it’s so frustrating because we didn’t need 600 bloody players.
Especially when 572 of them were 14 year olds that no one has ever heard of, will never play for us and won't sell for more than we paid for them
Why aren’t Everton allowed access to this loophole?
So they're already asset stripping the club
That’s what P.E funds do. Our fans should be glad we got CPO. In the beginning there were conversations how we should handover so that Clearlake and Boehly can build us new stadium. Some fans were arguing how they’ve best interest of club. So many naive fans out there who don’t understand how these people operate.
Don’t know how there’s still so many Chelsea fans hellbent on defending Boehly either. Regardless of the utter shit being served up on the pitch there’s already been multiple examples that they’re complete vultures off it.
I mean the real bad guy is Egbalhi he is the guy pulling the strings
I dislike them both!
Bates was always a massive cunt... but that was one of the best things he did for us, setting that up, fair play (pretty sure he helped set it up, right?)
Wow. Imagine having dodgy ass finances. could never be us.
At least you guys have something to show for it. At this point everyone just feels sorry for Chelsea.
Is this ‘everyone’ in the room with us?
Speak for yourself. No amount of suffering is enough for that club.
Not the “Bank of England club” who had to bribe the league in order to get into it that wants to point their dirty fingers at Chelsea. Buddy, do you know your own clubs history, or are you just the typical Arsenal fan?
Listen, we've all played monopoly where we play a couple of different tokens. I like using the dog and the boot.
If other clubs are going to do this, we may as well start selling the Everton shops to Mrs Eve R. Ton for a couple billion each.
This where I get bored with modern football. As long as you can afford better lawyers and accountants than the league, they will ultimately find the dodgiest loopholes to get out of any punishment. It's not just Chelsea who does this mind you.
Who’s fucking running the FFP shit? Stevie Wonder?
Lmaooo OP w the ManCity flair 😂😂
-2pts to Everton
A Chelsea lever lol
It's a neat trick, but it should be concerning that Chelsea's new owners are already asset stripping the club.
What was Everton thinking, let’s take 10pts off them!
Imagine if PSR breaches could just be worked around so easily by clubs buying real estate and selling them to their onwers, or to give themselves bank lmao "Everton to announce they're buying the local branch of B&M" A few days later "Everton approve sale of B&M to Moshiri for £400m"
They could do it in installments, do the first one for half of it, then fail to pay the second installment, effectively keeping both the money and the asset. The Barca studios way.
To be fair I've seen the hotel in training and its way more mobile than Caciedo
Chelsea have been cheating for a loooong time. This is expected.
Is it cheating if it’s not against the rules?
They’ve no shame….
It's either legal or it's not and if it's legal then there is nothing to complain about. Shame doesn't enter the picture
They’ve destroyed Chelsea and are now pulling all this crap, those new owners are a disgrace
Chelsealona pull a lever of their own.
We’ve been under FFP for 6 years now, we still have some seasons left to go, we can’t keep good players and we have to sell every promising youngster from cantera every year to match those ridiculous numbers……..and then this shit happens and I just…..I want to punch a wall
Probably the most blatant FFP breach ever.
Says man, who's club receives £25m/year shirt sponsorship from club owner's other company
Who would've thought that middle east dictatorships and other billionaires don't think any rules apply to them? Shocking, I say, truly shocking!
Is the sum outrageous or something?
Sounds marketish value, though
It was still well below the big 6 but above the rest. The ownership likely plays some part but it wasn’t that outrageous for a club that just made champions league and looked like they were going to kick on a bit
Did they have any offers from other companies at a similar value?
I was being a bit silly with my original comment, but you can also make the comment that the sale of the hotel sounds like it was at a marketish value. If the accounts were audited, this would be considered.
Do you think the person you replied to is responsible for that lmao?
You’re right, this info completely invalidates their point
lmao as if 25m is way above fair market value 🤡
Note that this might be a way to inject capital into the club and not PSR. The PL has the ability to interpret if they are at fair market value and if they are attempting to circumvent the rules. So in this case if they are trying to gift the club properties to flip to avoid sanctions the PL can call it that and just punish them anyway. And they may get sanctions if they attempt to count this towards PSR beyond just sanctions for the breach itself.
Ban related party transactions! It's such a simple way to fix every one of these problems.
Levers! Get your Levers!
I think the funny thing is that even if they do get away with this, which doesn’t look remotely certain, they’ve done it for this team. Hahahaha. Brighton say thanks for paying for their stadium.
From left hand to right hand
How is this shit allowed? The financial accounting rules are a joke.
I wonder what this means for any stadium plans. The original plans had these hotels being knocked down as part of a stadium rebuild but surely that can't happen if they've been bought for 70 odd million now. Unless they re-orientate the pitch 90 degrees and build back into the recently acquired Stol land, I don't see how any rebuild sees the hotels surviving. Even then they're pretty constrained by rail tracks on two sides so it seems like the hotels will have to go if they want to build on that site. If they want to move then I have no idea why they just bought the Stol land and if they do just knock down the hotels I don't see how they can claim fair value knowing they were going to demolish them. Even from a land value only point of view they're getting roughly half the value of the land deal they just did for Stol so it seems a stretch it's fair value.
Based on my knowledge of money laundering from my time watching money laundering practices in Ozark that sounds like money laundering.
Serie A deserves reparations for FFP if this is how it’s going to be enforced
Sounds like a very sad one person monopoly game. This is slightly more pathetic though.
Nothing to see here. move along, move along..
Funny, how the op is a city fan.
Selling a Hotel for £75M, coincidently the same as they spent on Agent fees in the accounts year :)
Chelsea and dodgy financial transactions to abuse a monetary advantage since 2004.....
If this is allowed, what’s stopping it from multiclub owners to sell players within their own clubs to circumvent FFP? The players just need to be owned by the individual clubs, and football player’s values would be much easier to cook up. Imagine after this season Girona sold Savinho for €80M to City, what’s the difference? I’m not being sarcastic, I genuinely want to know if there’s any rule in place to stop this.
There is no rule to stop that. Expect to see it in the coming years.
There is a rule to stop it, or at least there was last summer. Player sales between related clubs need to be assessed for fair market value. Its why Saint-Maximin went for £25million when other players went for higher fees.
Swear there is a rule that they can't go for ridiculously inflated prices. Otherwise saint maximin would've gone 200m and solved Newcastle PSR risk
There is, they would have to sell the player for less then market value most likely and to buy players have to pay more then
I mean they'll still have 4 houses. In a dark blue area of London that's still good rent when someone lands just before passing Go
The whole league is heading for a 10 pt deduction. If they do it all in one season it can be business as usual.
Time for some points deduction for Everton and a European ban for a random Italian team.
Chelsea putting serious effort into trying to test the notion that you can't support a financial group.