Club World Cup Due For Reform Smaller Chinese Clubs Focus On Own Talent AFLW Players Jeopardizing Cricket Deals Bledisloe Cup Heading To Perth in '19 Isinbayeva Appointed To Oversee RUSADA AC Milan's Proposed Sale Pushed To March Board Extends IAAF Officials' Suspension Executive Transactions Names In The News MotoGP Partners With Sportradar
SBD Global/September 27, 2013/FinancePrint All
Lionel Messi will appear in court Friday after his lawyer "failed to strike an eleventh-hour deal to get prosecutors to drop a tax evasion case" against him, according to Graham Keeley of the LONDON TIMES. Messi and his father "are to appear in court in Barcelona to face allegations" that they evaded €4.2M($5.6M) in taxes "on the sale of image rights." Messi’s lawyer, Cristobal Martell, "tried to convince prosecutors this week to drop the case" against the player and "to take action only against his father." But prosecutors "refused to accept a deal." A judge must decide at Friday’s hearing "whether to charge both men with criminal tax evasion and proceed to trial or to drop the case." If convicted, Messi could face a fine of up to €21M ($28M) and a one-year suspended sentence (LONDON TIMES, 9/26).
SPAIN'S 'NASTY' REGULATIONS: BLOOMBERG's Staley & Duff reported the case against Messi, who holds dual citizenship in Argentina and Spain, "is part of an aggressive push by Spain, U.K. and other deficit-ridden governments to tackle tax evasion" in Europe’s €19.4B football industry. After decades of "coddling Europe’s most popular -- and politically influential -- sport, authorities are pursuing players and teams that collectively owe billions of euros in unpaid taxes." British accountant Alistair Spence Clarke, who works in Marbella, Spain, said the Messi case "is definitely a statement of Spain today." Clarke added, "Spain has introduced some pretty nasty tax avoidance regulations. It’s really becoming very aggressive." Tax lawyers in Spain "expressed surprise that Messi would be drawn into a criminal court." Spanish attorney Rodrigo Garcia, who represents other players, said that, normally, "the revenue service begins with a civil inquiry and offers the accused an opportunity to settle." Messi "denied any wrongdoing." Messi’s father, Jorge, "placed the blame" on sports agent Rodolfo Schinocca, hired by the family in '05. Jorge Messi said, "Lionel was 15 years at the time; he didn’t have anything to do with this. He is a footballer and that’s it. If there was an error, it was by our financial adviser. He created the company. My mistake was to have trusted the adviser. I’m going to take the blame for that. I had confidence in someone I shouldn’t have had." In an email from Argentina, Schinocca said that "he had nothing to do with Messi’s taxes and was asked instead to help secure sponsorship deals." Schinocca said that "he hasn’t been contacted by prosecutors in the Messi case." Schinocca: "I never employed this structure for any soccer player. It wasn’t my job. I was a commercial partner" (BLOOMBERG, 9/26).
The first round of bids to buy IMG are due next week, according to sources familiar with the sales plan for the company. Buyers interested in acquiring the sports and entertainment firm have been asked to submit interest documents between Monday and Wednesday. Initial offers will be reviewed by a top exec at Forstmann Little, the trustees of Ted Forstmann’s estate at the firm Akin Gump and the bankers working on the sale at Morgan Stanley and Evercore. They will narrow the list to a handful of serious buyers by mid-October and then push the auction process ahead by asking for a second round of bids from the selected serious buyers. Sources said that more than 35 potential buyers signed non-disclosure agreements that gave them access to IMG’s financial information. An array of private equity companies and agencies have taken an interest in the company, including KKR, CVC Capital Partners, Bain Capital, the Carlyle Group, Silver Lake and William Morris Endeavor, CAA and TPG Capital, among others. IMG is expected to attract an all-cash offer of more than $2B. The company’s earnings before interest, tax, depreciation and amortization (EBITDA) increased from $146M in '11 to $175M last year, and are projected to exceed $200M this year, according to sources familiar with its financials. Blackstone Group ran a similar, auction-style sale for AEG last year and hoped to fetch $8B for the company, but it pulled the company off the market six months later after it failed to find a bidder willing to pay the asking price. A spokesperson for Abernathy MacGregor, a financial PR firm working on the IMG sale, declined to comment.
Dutch champions Ajax Amsterdam announced a profit of €18.2M ($24.58M) for the '12-13 financial year on Thursday, "attributing it to the sale of leading players." It is a considerable increase on the profit of €8.5M one year earlier, and the club said in a statement that it "expected a larger profit in the next financial period particularly with participation in the Champions League and further player sales" (REUTERS, 9/26). ... Cypriot football "has been hit by the financial tsunami which has hit the island as the Ministry of Finance is expected to file charges against clubs' non-payment of taxes." Separately the board of the CFA Championship "has decided to cut the league to 12 teams from the current 14." Charges "were expected against four first division clubs for failing to pay value added tax (sales tax)" of up to €4M, dating back to '07 (INSIDE WORLD FOOTBALL, 9/26).