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City Financial Group Financials

Discussion in 'Team News and Rumors' started by Kjbert, Mar 19, 2018.

  1. Kjbert

    Kjbert Senior Member Seasoned Supporter

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  2. Kjbert

    Kjbert Senior Member Seasoned Supporter

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    I'll summarize:

    To ensure that MCFC shows a profit, NYCFC and Melbourne are subsidizing MCFC.
     
  3. LionNYC

    LionNYC Senior Member Staff Member Elite Donor Seasoned Supporter

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    That's why we got Mark Booth to be editor in chief of NYCFC.com. NYCFC is "paying" his 20M Euro Salary.

    Also I bet a lot employees are coded in NYC rather than Manchester.
     
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  4. Midas Mulligan

    Midas Mulligan Senior Member Elite Donor Donor Seasoned Supporter International Liaison

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    Pretty sure you’re right. But pretty sure it’s all defensible.

    Doesn’t make it any less sad. I don’t support NYCFC to subsidize a team I dgaf about.
     
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  5. NickFromAstoria

    NickFromAstoria Regular Member

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    Man, you guys are supposed to make me feel more bad, and not less bad, about cancelling my season tickets, aren't you
     
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  6. dummyrun

    dummyrun Active Member Elite Donor

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    Honestly sickening how we just give them our USMNT stars for free.
     
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  7. SanBartG

    SanBartG Regular Member Elite Donor

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    I want to cancel mine now too. I’m sort of disgusted.
     
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  8. dummyrun

    dummyrun Active Member Elite Donor

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    Oh I thought we were joking. Guys, our season tickets are not paying Aymeric Laporte's $80m transfer fee. The "subsidy" the article talks about looks like CFG shifting costs to places they can absorb them without hurting Manchester City's Financial Fair Play standing. There's no reason to believe it hurts NYCFC at all, while we all know the ways that CFG gives our team an advantage.
     
  9. LeeNYCFC

    LeeNYCFC Regular Member Elite Donor Seasoned Supporter

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    "Subsidized" in the article is kind of a loaded term. It's more housing its debt on its affiliate's balance sheet instead of its own, it's all CFG's cash in the end. Given the debt that they've shown in previous years, it could be a case of showing more of our own debt for cash we've been lent rather than anything nefarious.
    We can hardly be subsidizing them when our total receipts are half the debt we reported.
     
  10. Kjbert

    Kjbert Senior Member Seasoned Supporter

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    A couple of thoughts. Yes, it's a shuffling of deck chairs because the same person is writing the checks no matter what.

    It's just a bad look. It's almost as if these other entities exist to absorb costs above and beyond want they want to show on the MCFC balance sheet. The interesting tidbit is that NYCFC, by any measure, looks to be highly profitable in its day to day operations. Our club and it's balance sheet appears to be rather healthy.
     
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  11. Midas Mulligan

    Midas Mulligan Senior Member Elite Donor Donor Seasoned Supporter International Liaison

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    That all rings true, thus why I said it’s defensible.

    It doesn’t mean anyone is wrong to have a little beef with it, though. It sucks. As someone who supports a team competitive with Momma City, I do feel a little dirty.

    But I’ll probably just choke down the shame and carry on because it gives me pleasure, like a Vegas seafood buffet.
     
  12. SoupInNYC

    SoupInNYC Senior Member Elite Donor

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    Well, MLS fans outside of NYC will make it seem like its a bad look.

    All it really is, is shifting the costs to allow the one entity where they could benefit from this, to benefit from it. It doesn't impact our club at all whether they are reporting as operating at a huge profit vs a big loss. But it does benefit MCFC to show they are operating at a profit.

    I'm sure other MLS fans will use this article to bash our club, but ultimately this doesn't matter at all.
     
  13. Kjbert

    Kjbert Senior Member Seasoned Supporter

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    It doesn't matter until it matters. Im with Midas MulliganMidas Mulligan thay from a business perspective right now it's meaningless. You just don't know how this may impact thinking moving forward. Certainly doesn't help the farm team narrative.
     
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  14. mgarbowski

    mgarbowski Senior Member Elite Donor Donor Seasoned Supporter

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    I wasn't convinced by this article at all. The man basis for his thesis is that Man City generates 92% of the revenue but is only charged 82% of the expenses. He seems to think they should be proportional. He also just asserts that as if it is self-evident, but it is not. MC gets tons of revenue from television and licensing. Neither causes it to incur additional costs. There is no reason for revenue and costs to be proportional.
    Later, he notes that the MC share of costs goes down to 76% if you exclude player registration fees. OK. Sure, if you exclude an area where MC bears a higher than proportionate share of costs, its overall proportion goes down. I'm not sure that tells us anything.
    I'm sure CFG manipulates the numbers as best as it can to benefit the organization. You can do that legally or not. But I don't see evidence that they're especially hiding Man City costs by assigning them to other teams.
     
  15. SoupInNYC

    SoupInNYC Senior Member Elite Donor

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    Regarding this part, this article doesn't help the perception of the farm team narrative for those that are too lazy to think it through analytically. (ETA: don't think this is you, but this is quite common among other MLS fans)

    The closest thing this club has ever been to a farm team is having Shay Facey and Angelino loaned here Year 1, and my god did the roster that year need them.
     
  16. Ulrich

    Ulrich Senior Member Elite Donor Donor Seasoned Supporter

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    Farm team for Facey.... purgatory for Angelino...... control group for CFG....... whatever NYCFC was to each involved party, it’s since changed; those two guys were better than 95% of the 1st year roster, but I’m not sure either would make the 18 now - Facey definitely wouldn’t and Angelino would probably be a co-occupier of the same chateau bow wow that Lewis has a lease at. NYCFC is still probably considered a control group for CFG, but the ceiling has been raise by multiple factors with the inclusion of Hererra (and maybe Medina, but he’s not a loan), no longer gauging the quality of the Elite Development Squad to get a senior contract, but rather gauging the readiness of grown-assed players that should be fighting for legitimate 1st team minutes. [sorry SoupInNYCSoupInNYC , just rambling and spitballing]

    Segue tangent: if NYCFC is showing sound operating fundamentals (we know with any infrastructure there will be a loss), then it’s going to be very interesting moving forward with new MLS TV and Sponsorship deals how NYCFC’s balance sheet continues to play out. It’s hard to fathom CFG wouldn’t continue to shift debt away from MCFC to adhere to the FFP rules, but I assume there’s gonna be a point where showing year after year operating losses is problematic (any resident CPA’s want to chime in?), or does it benefit MLS to have teams in the Red as negotiating tactics with the Players Association???
     
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  17. SoupInNYC

    SoupInNYC Senior Member Elite Donor

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    On this, there are several things to consider (note that I am not a CPA, but do have a degree in accounting and work for a large firm doing forensic accounting / regulatory work).

    One, I don't think they are, or the author is suggesting, that debt is being shifted to NYCFC, only operating expenses. I do spend a lot of time working with federal government contractors on how operating costs as well as G&A costs from corporate home offices should be allocated (the federal government has strict rules on this). Ultimately, for government reporting and billing purposes, they have to allocate via certain methods, but for financial reporting or managerial accounting purposes, they can allocate how they want (subject to other accounting rules that I don't really need to pay attention to).

    That said, I could see CFG perhaps wanting to allocate more of their scouting costs to non-MCFC clubs, or other home office costs elsewhere in order to show a better bottom line at the one club where it would be an advantage to have that bottom line.

    But, I'm not certain what the thoughts are on this from MLS. Are they ok with this particular reporting? Do they want NYCFC to show a bottom line that would perhaps be a better representation of their true operating margin? A little over a year ago, I actually saw a job posting on LinkedIn that was with MLS as a financial analyst. Basically, the responsibilities were to visit the different clubs around the league to work on team financials for league reporting purposes. I thought it would be really cool to have that kind of insight into teams' financials, but really wasn't interesting in that posting at all.

    The other consideration in all of this (and I think I know the answer to it) is what portion of NYCFC operating costs, if any, are the Yankees responsible for? I'm assuming that they have an agreement pre-determined so that in cases like what I laid out above, the Yankees wouldn't have to pay any additional share of home office costs. But you would have to imagine if they were paying their straight proportion of NYCFC costs, that they would be very interested in how costs are being allocated down.

    If I can find some time, I may open up the annual report and play around there a bit. But again, I do want to stress that I don't normally look at things from a financial reporting perspective, but moreso from a federal compliance perspective.
     
  18. dummyrun

    dummyrun Active Member Elite Donor

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    Yeah it's strange he doesn't flesh out the central assumption. But it's hard to imagine why CFG's non-MCFC clubs (none of which is a financial outlier in its league as far as I know) would be crazy money pits spending £120m against revenues of £46m unless they were bearing more than their share of the group's expenses.
     
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  19. LionNYC

    LionNYC Senior Member Staff Member Elite Donor Seasoned Supporter

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    We're basically an offshore expense haven.
     
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  20. Ulrich

    Ulrich Senior Member Elite Donor Donor Seasoned Supporter

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    Ain’t that a kick in the sack - another country using the US as an offshore haven.... the planets give to align pretty perfectly for that to happen.
     

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