[Archived] West Ham Fined £5.5m

[OJRovers]

I find it interesting when he says about 'no money has changed hands for the players - so who owns them?'

In accountancy, a number of recent standards have lent more to the Substance over form view. Ie when deciding whether a company actually owns an asset, the substance of the transaction is considered over and above the actual legal form.

If a company said 'we have bought 2 assets this year and we own them' the questions would be how much did you pay for them / what is their market value? In West Ham's case they paid nil, with a MV of £30m-40m. This is a situation where substance would come into play i.e. they are owned by a third party.

There is no accounting firm in the UK which would allow them to hold Tevez/Masch on their balance sheet as genuine assets.

II don;t know when WHAM publish their accounts, but the capitalisation/non-capitalisation of the players will provide a massive piece of evidence to the 4 clubs in proving that WHAM did not actually own the players.

[jim mk2]

This is not just an issue for the so-called "Gang of Four" . All the Premiership clubs (or rather, all those with morals and principles ) should be fighting together to force the league to review the Tevez case .

[philipl]

No doubt the powers that be at Ewood are pondering this.

Premiership table this morning:

5 Everton 37 16 57

6 Tottenham 37 2 57

7 Bolton 37 -5 55

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8 Reading 37 5 54

9 Portsmouth 37 3 53

10 Blackburn 37 -2 51

Premiership table this morning had we played West Ham without Tevez:

5 Everton 37 16 57

6 Blackburn 37 3 57

7 Tottenham 37 2 57

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8 Bolton 37 -5 55

9 Reading 37 5 54

10 Portsmouth 37 3 53

[Jan]

I find it interesting when he says about 'no money has changed hands for the players - so who owns them?'

In accountancy, a number of recent standards have lent more to the Substance over form view. Ie when deciding whether a company actually owns an asset, the substance of the transaction is considered over and above the actual legal form.

If a company said 'we have bought 2 assets this year and we own them' the questions would be how much did you pay for them / what is their market value? In West Ham's case they paid nil, with a MV of £30m-40m. This is a situation where substance would come into play i.e. they are owned by a third party.

There is no accounting firm in the UK which would allow them to hold Tevez/Masch on their balance sheet as genuine assets.

II don;t know when WHAM publish their accounts, but the capitalisation/non-capitalisation of the players will provide a massive piece of evidence to the 4 clubs in proving that WHAM did not actually own the players.

Although the counter to that is if the agreement they had to use the players was in the form of a finance lease. Most companies no longer own, for example, their company cars, but if they have taken the "risks and rewards" of ownership, as well as some other more techie accounting things, then they can capitalise those assets.(I don't believe for a second that this is the case)

Also, there would be no easy way of distinguishing which assets they're dealing with in the financial statements. Even if the balance sheet DID increase by the requisite amount, it could still be an attributed value to, for example, Lucash and Matthew Upson.

Finally, depending on who audits West Ham, it's not at all certain that they WOULDN'T allow capitalisation. That would depend a) on the size of firm and the proportion of that firm's revenue the West Ham audit fee makes up. None of the big ones would, I agree.

But I don't think that ownership is the issue. The issue is more what they told the Premiership, and let's face it we're never going to see that unless there is a Wigan/Sheff U/Watford/Fulham mole in the FA who leaks the documents.

[OJRovers]

Although the counter to that is if the agreement they had to use the players was in the form of a finance lease. Most companies no longer own, for example, their company cars, but if they have taken the "risks and rewards" of ownership, as well as some other more techie accounting things, then they can capitalise those assets.(I don't believe for a second that this is the case)

Also, there would be no easy way of distinguishing which assets they're dealing with in the financial statements. Even if the balance sheet DID increase by the requisite amount, it could still be an attributed value to, for example, Lucash and Matthew Upson.

Finally, depending on who audits West Ham, it's not at all certain that they WOULDN'T allow capitalisation. That would depend a) on the size of firm and the proportion of that firm's revenue the West Ham audit fee makes up. None of the big ones would, I agree.

But I don't think that ownership is the issue. The issue is more what they told the Premiership, and let's face it we're never going to see that unless there is a Wigan/Sheff U/Watford/Fulham mole in the FA who leaks the documents.

True.

although I think the value of player 'additions' is usually discussed in the chairman/MD's trading statements if its a big number.

Would be funny if they sacked KPMG and appointed Del-Boy and Rodney Ltd as their audit firm!

[philipl]

Would a conventional Finance leases over Premiership players be compatible with rule 18b or whatever it is?

All finance leases I have seen give the lessor certain rights over the asset irrespective of how the asset is treated in the lessor or lessee books which presumably is why there have been no previous finance leases used for the acquisition of players. Even Peter Ridsdale shied away from using them for player finance and you can be sure that clubs like Leeds, Man City and Newcastle would have had a good look to see if they could do it.

Certainly, I would be amazed if a finance lease would allow footballing debts preferences that the Football League and the EPL so jealously guard.

We don't know whether MCI controlling the economic rights over the players (and have lodged legal documents to protect their asserted interest) actually is a finance lease.

The West Ham auditors are Deloitte and Touche- one of the biggies.

[Roversider]

In terms of leasing assets accounting standards have developed to force businesses to display them and thus avoid the smoke and mirrors methods adopted to allow 'off balance sheet' funding. That would show the asset together with the outstanding finance liability.

Simply put the rules relate to who gets the benefit and risk associated with an asset, if that is the relevant business then it is treated as a finance lease as opposed to an operating lease. Accordingly the asset must be displayed with the associating liability.

Not all football clubs choose to show player contracts as assets, in fact it has developed more as clubs choose to float on the stock market and need to demonstrate some monetary value in the club.

Leeds chose to use contracts as collateral against loans but kept the assets (player contracts) on their books whilst carrying the liability.

It is correct to say that if Tevez and Mascherano were effectively leased to West Ham their 'owners' would need to have sufficient legal protection to enable them to recover ownership and then market them on. Guess that seems to be why they are both being hawked elsewhere than West Ham. That, and the immediate re-signing of Tevez means that this discussion will go on.

Personally I am not surprised, but a little saddened, that money corrupts and Premier League money corrupts absolutely.

I hope that John Williams will use his position to prevent this mess carrying on. The whole aspect of loans in the Premiership is clouded and I think it has been in the interests of the clubs to leave it so.

[philipl]

West Ham reneged on a gentlemen's agreement not to play Boa Morte against Fulham because it was unenforcable.

Yet another twist in the mess of Premiership rules this season.

Perhaps it is not entirely surprising to find Fulham in the "Gang of Four".

RFW stirs the pot ahead of this afternoon's fixture on the BBC:

Sir Alex Ferguson says he turned down the chance to sign Carlos Tevez:

"He is the one who has lifted their game.

"We were offered them him and Javier Mascherano but if I remember correctly, we weren't sure of the deal.

"Tevez has scored a couple of really good free-kicks and seems to have a bit of enthusiasm for it."

To add insult to injury, Curbishley has been given a £45m transfer budget this summer if West Ham stay up.

[Exiled_Rover]

£45m?!! That's absolute insanity. God I hope they go down.

[krislu]

Anyone got the ManU lineup today? Would be pretty upset if I was a Wigan fan and ManU played with their second string...

[Rover4ever]

A particularly annoying thing in the WH saga has been West Ham fans masquerading as "neutrals", and saying stuff like, "Neutrals would want WH to stay up cause Wigan are dour and dont have many fans".

No Ronaldo, Vidic or Scholes

Man Utd: Van der Sar, O'Shea, Brown, Heinze, Evra, Solskjaer, Carrick, Fletcher, Richardson, Smith, Rooney

[krislu]

No Ronaldo, Vidic or Scholes

Man Utd: Van der Sar, O'Shea, Brown, Heinze, Evra, Solskjaer, Carrick, Fletcher, Richardson, Smith, Rooney

Still a good team. They have Ronaldo, Giggs, Vidic and Scholes on the bench. Come on ManU and Wigan, get those WH @#/?s down!!

[SouthAussieRover]

West Ham leading at OT.

Wigan 2-1 up.

[SouthAussieRover]

Tevez's goal keeps West Ham up.

Wigan beat Sheffield United 2-1.

Sheffield United down.

[Rover4ever]

absolutely shameful of Man U to allow West Ham to nick 6 points off them.

On the other hand, it seems Tevez's cheating against us gave West Ham the momentum they needed to stay up.....

[Alex Rover]

absolutely shameful of Man U to allow West Ham to nick 6 points off them.

.....err yeah, about that :ph34r:

[FourLaneBlue]

So you want West Ham to stay up do you? Or are you just being pious for the sake of it?

If you don't have the common sense to see that match fixing is a worse offence than any West Ham have committed then there is no use trying to explain it.

If that makes me "pious" then so be it.

I've no problem with West Ham staying up. I feel, if possible, seasons should be determined by what happens on the pitch. However it will go onto the courts and if they should be docked the points then it will happen.

[mike at picture]

LUCASH

[joey_big_nose]

Its going to be an interesting summer... I have a feeling that West Ham will get away with it. Never sure that something like this has come to the courts before and I feel a judge will be uncomfotable with the juristiction of it.

[Eddie]

They'll get away with it, the only thing I can see happening is the fine being increased. The problem will be that if they did relegate West Ham they would most certainly appeal which would mean this process would take ages and the start of the season would have to be delayed, which isn't possible. A further fine is the only viable option, but it isn't a fair one. They deserve to go down.

[Alex Rover]

After their safety it'll be interesting to see whether Dave Whelan will maintain his previous stance with threatening legal action. My guess is he'll now back down, which will speak volumes.

[USABlue]

The whole West Ham saga stinks. I smell a rat. From the way they were handed the game at ewood through the Tevez fiasco and even somthing not quite right at OT today. Did anyone see the Boa Morte verbal assualt on the ref, not even a warning. Compare with Roberts being sent off.

[mike at picture]

The whole West Ham saga stinks. I smell a rat. From the way they were handed the game at ewood through the Tevez fiasco and even somthing not quite right at OT today. Did anyone see the Boa Morte verbal assualt on the ref, not even a warning. Compare with Roberts being sent off.

Manyoo denied a stitched on pen at O.T.?

Something smells allright.

[Exiled_Rover]

A particularly annoying thing in the WH saga has been West Ham fans masquerading as "neutrals", and saying stuff like, "Neutrals would want WH to stay up cause Wigan are dour and dont have many fans".

No Ronaldo, Vidic or Scholes

Man Utd: Van der Sar, O'Shea, Brown, Heinze, Evra, Solskjaer, Carrick, Fletcher, Richardson, Smith, Rooney

That's their second team, let's face it. If the title had been on the line, Utd would have won 3-0.

[RovertheHill]

As far as I can see a precedent has now been set. The FA have sent a message loud and clear to the money men that run the game now, and that message is that the rules that govern the game are there to be broken if you have the money to do so. Let's face it, if you are facing relegation in the future (rumoured to be worth £60M), or need to qualify for champions league (similar figure), why wouldn't you play a player illegally if you could?