6 + 2 Point Deductions

[Moderatelywarmwater]

What is bad faith in the UK law?


Bad faith conduct could include behaviour which is seen as commercially unacceptable, improper or unconscionable, but which is not actually dishonest. So, a failure to act in good faith (or not to act in bad faith) does not necessarily require fraud or other dishonesty.

Again, I think this would be difficult to prove. Bad faith in what respect? Quite a high bar I’d assume.

 

[HalfTimeSayers]

That was my understanding too, along with a load of gobbledegook reasoning.

The club didn’t borrow the money for the stadium coz the Mosh sorted it. We did borrow money to run the club ‘tho. So, if the Mosh hadn’t weighed out to pay for the stadium, those loans we took to run the club would have gone to pay for the stadium. So, we’re claiming for the interest we would have paid on those loans we didn’t take out.

I think there was some subterfuge, in that this wasn’t disclosed, the IC had to discover it for themselves with the loan agreements etc. (which was always going to happen) Only then did we explain the crossover which was viewed as an attempt to mislead, or at least went against our argument of being cooperative and open. This was the sort of thing we should have been communicating all along the PL, asking for understanding.

Tricky argument anyway for me. Whilst they are sharks, I can understand why, for them, going with the actual substance of the loan agreements is their first conclusion rather than our shoulda woulda coulda. If we hadn’t spent millions paying off Lampard we could have spent that on the women’s team, thus a deductible cost for PSR etc etc. They were bound to try and go with the legal position in front of them. It’s a tough one, but don’t think we helped ourself.

Maybe doing it the way we did helped our sustainability/liquidity, which should be the point of PSR. But then Forest waiting to sell Johnson was also correct for their sustainability, but might cost them points. Its all a mess, and I’m exhausted now by all the speculation, both from those qualified and those not (and even the qualified ones are somehow guessing what our 23/24 accounts look like).

The whole concept of PSR/FFP along with a ridiculous made up unscientific punishment are the issues to appeal for me, which is why you hire a super lawyer, not to re-argue mitigations that have already been binned off.

 

[Goat]

Again, I think this would be difficult to prove. Bad faith in what respect? Quite a high bar I’d assume.

I have no idea mate, my legal expertise stops at Suits.

 

[Moderatelywarmwater]

I have no idea mate, my legal expertise stops at Suits.

Just don’t see much hope in it. Just hoping that the points get reduced (because it’s clearly absurd) and we get mitigating factors for the second one (ie we’ve already been punished).
It’s all Moshiri’s fault. He’s to blame for it all, colossal incompetence and who pays? We do.

 

[Neiler]

 

[PeregrineT]

I’m not sure I totally understand, but heres my attempt….!
Moshiri leant the club money at 0% for the stadium build. He the tried to claim interest on the loans and put that against PSR.
As far as I can work out, Moshiri tried to claim at the hearing that even though he loaned the money at zero % for stadium loans, the money actually came from the R&M and Metro bank loans so he could claim them for PSR as they were part of the stadium build cost. Moshiri claimed that if there had been no stadium build then he’d have paid the interest on these loans (as he had done in the past?) anyway, so they should go against PSR.
the problem is, that they only had Moshiris word for this and the paperwork on the loans didn’t back him up.


or something

Essentially what it was:

1. Everton borrowed a bunch of money for the stadium build. Moshiri still needed more money to finish the stadium, so he was looking for more people willing to loan
2. It is more attractive for a lender to loan on a stadium that has zero loans, than one with 200 million in loans, so he put it in the books as just a "general funding" loan for Everton itself, rather than directly tied to the stadium.
3. The interest on the loan is around 20 million per annum. He then wanted to deduct that from our P&L. The league said it wasnt for the stadium so it couldnt be deducted.

He could have just stated it was a stadium loan from the start, and instead leant the club money at 0%, and it could have been deducted though it would have made it harder to find funding to finish the stadium. It is purely in his choice of whether to record his 0% loan as for the stadium or for the club in paperwork. Exact same money, same results, different accounting.

Essentially it IS a stadium loan, but Moshiri wanted the PL to view it one way, and potential lenders to view it another way. As often is the case with taxes and accounting, the money serves the same purpose, costs the same, but HOW you write it down in the accounts makes all the difference in how it is viewed. As anyone who runs a business knows, you can have the exact same 200k in income, and 100k in expenses, but you can end up with 70k in taxes or 20k in taxes purely based on how you write it down.

 

[Rich1878]

 

[Milk]

Yeah … but just watch the PL “adjust” the rules so Chelsea are compliant.

I doubt very much they’ll even be charged let alone put before a Commission.
And Im willing to bet City’s charges will be watered down or talked out as time limited

 

[kenada_blue]

They'll make £100mill in sales easy

 

[Moderatelywarmwater]

Yeah … but just watch the PL “adjust” the rules so Chelsea are compliant.

I doubt very much they’ll even be charged let alone put before a Commission.
And Im willing to bet City’s charges will be watered down or talked out as time limited

This means they need to sell about £90m worth of players to meet the PSR for the period then?
They want £50m for Broja (which is laughable, but still) and they could get £45m for Gallagher. So there’s a route to it I guess.
But they’d need to sell like that every year for years .. and that’s without them singing anyone.

 

[ToffeeTim]

This means they need to sell about £90m worth of players to meet the PSR for the period then?
They want £50m for Broja (which is laughable, but still) and they could get £45m for Gallagher. So there’s a route to it I guess.
But they’d need to sell like that every year for years .. and that’s without them singing anyone.

I dont see anyone paying close to 50m for Broja. That's more than double his value

 

[Moderatelywarmwater]

I dont see anyone paying close to 50m for Broja. That's more than double his value

oh I agree. But they’ve got others they can sell, so I don’t see them having a problem … but longer term? No idea how they’ll do it

 

[ToffeeTim]

oh I agree. But they’ve got others they can sell, so I don’t see them having a problem … but longer term? No idea how they’ll do it

I'm not convinced they have many players who teams will want to sign for close to what they paid. And with some on big 8 year contracts, they might not want to leave to take lower contracts elsewhere

It's a real sad state of affairs that clubs are incentivised to sell their own youth players, because it's better for FFP. How can that be seen as good for the game.

 

[John from Bootle]

4.2. 4.3 and 4.4 stand out big time there with everything that has been made public about the IC and everything else that’s fallen into the plug domain and that is only what has been made public.

The threat of not taking it is enough to make the PL want this story to go away but a good lawyer will do the rest.

Wonder if the premier league suggesting a punishment guideline to a supposedly independent commission fits into that?

 

[blueboy72]

I'm not convinced they have many players who teams will want to sign for close to what they paid. And with some on big 8 year contracts, they might not want to leave to take lower contracts elsewhere

It's a real sad state of affairs that clubs are incentivised to sell their own youth players, because it's better for FFP. How can that be seen as good for the game.

Problem is a lot of prem teams are sailing close to the wind. And teams that maybe could spend city, Liverpool ain’t buying Chelsea’s fringe players. Also same in Europe, Bayern, psg, Madrid aren’t buying Broja or Gallagher. The sales to Saudi got them out of a hole, I think they will struggle to sell players now