Today I sent the following question to UEFA.
Hello,
I am a journalist (IFJ Press Card attached) and have a question about the new FSR.
Is a share issue that brings new money to a club considered part of “football income” as defined in FSR?
Many thanks
I look forward to hearing from you.
Regards
I received the following replay within three hours.
Here is the link that is referred to in the UEFA email.
For the avoidance of doubt, although my question was general, I had a specific club in mind.
The current operator of the Ibrox franchise is using share confetti to provide lights on liquidity.
They are, of course, currently on a UEFA financial watchlist.
According to the succulent suspects in the Stenography Corps, what is happening at Sevco is a “trusted cash boost format”.
I doubt if the people on Nyon view it that way.
It is worth noting that, in the past, I have sent similarly appropriate inquiries to the SFA.
Dear reader, I cannot remember the last time I received a reply.
Discover more from Phil Mac Giolla Bháin
Subscribe to get the latest posts sent to your email.
Smoking Mirrors they are fooling no one. Other than the incompetent media
Paragraph 14.01 on page 21 is interesting. It defines a football club as being a legal entity. For example, a Limited Company. So I suppose if that company goes into administration or god forbid, liquidation, then the club goes the same way as they are the same thing? What type of legal entity is a basket of assets?
I think the share confetti probably is providing lights-on liquidity but I think they are doing this in quite a smart way. The lights-on liquidity was provided by loans from a couple of Directors. The latest share issue was converting those loans to equity (money to shares); money that had been loaned to TRIFC. Converting loans to equity just means the need to pay those loans back is removed and TRIFC don’t have to repay those loans in cash, they’ve given the lenders (those friendly Directors) shares instead. The people who have had their loans converted to equity would have to sell some or all of their shares to realise any cash. So now TRIFC, which owed a sum of money to let’s say Director A, has issued to that Director a number of new shares instead. Takes a debt off their books. Dilutes everybody else’s shareholding. I don’t think this latest issue has generated any new cash for them but it has reduced their indebtedness. Next month’s confetti issue may be different.
Oh look, a journalist.
Keep up the good work Phil
SO THAT MEANS IF YOU PAY IN 500,000 FOR 3 MILLION SHARES AND YOU GET SIX PENCE IN THE POUND YOU GET YOUR 500,000 BACK IF THE COMPANY FOLD’S
At a first quick glance at the FSR Articles 87 (87.02) and 88, it seems that an “acceptable deviation” of up to EUR 60 million is allowed, within a reporting period, if entirely covered by “contributions” or “equity”.