Financial Fair Play

[ebouenolike]

Just stumbled across an article written by Gabriele Marcotti in which he discusses all the 'wiggle room' around the FFP rulings that will come into effect with in the next few years.

Some interesting points raised are:

1) Sheik Mansour can't just buy some goalkeeper gloves from City for £100 million, as UEFA will just take it at market value of like £20. Neither can a parent company sponsor the club for ridiculous money, again UEFA look at 'market value'.

2) There may be discretions for the likes of City and Chelsea if they are 'moving in the right direction'. Thus if Chelsea lose £50 million one year, and only £42 million the following year, they may be allowed in as they are showing signs of improvement.

<a class="postlink" href="http://sportsillustrated.cnn.com/2011/writers/gabriele_marcotti/05/05/ffp/index.html?sct=sc_t11_a1" onclick="window.open(this.href);return false;">http://sportsillustrated.cnn.com/2011/w ... =sc_t11_a1</a>

There's the article. Any thoughts?

P.S. If there is a section already on similar material can a mod please move this there. Cheers.

 

[scytheavatar]

2) There may be discretions for the likes of City and Chelsea if they are 'moving in the right direction'. Thus if Chelsea lose £50 million one year, and only £42 million the following year, they may be allowed in as they are showing signs of improvement.

That is allowed only for the reporting period ending in 2012, so effectively it only buys 1 more year for them before their day of judgement. For more information read this:

<a class="postlink" href="http://swissramble.blogspot.com/2011/02/chelseas-financial-fair-play-challenge.html" onclick="window.open(this.href);return false;">http://swissramble.blogspot.com/2011/02 ... lenge.html</a>

 

[Beksl]

If the big clubs, espcially the ones with a sugar daddy, won't be able to cope with FFP I can see them form their own European league. It wasn't so long ago when G14 threaten to do the same.

 

[Proof]

If the big clubs, espcially the ones with a sugar daddy, won't be able to cope with FFP I can see them form their own European league.

That would be a good idea. It would be far more entertaining.

 

[outlaw_member]

Football would die on such a day. Yes, I can be melodramatic like that.

 

[Beksl]

Football would die on such a day. Yes, I can be melodramatic like that.

I wouldn't say so. It happened in basketball as well, teams formed their own league, ULEB decided to break away from FIBA Europe and begin the new Euroleague and eventually it became the top tournament in Europe.

If the biggest clubs decide to part away from UEFA and form their own organization anything can happen. It would also be a wake up call for UEFA and its corrupted parts.

 

[spartandre217]

Football would die on such a day. Yes, I can be melodramatic like that.

I wouldn't say so. It happened in basketball as well, teams formed their own league, ULEB decided to break away from FIBA Europe and begin the new Euroleague and eventually it became the top tournament in Europe.

If the biggest clubs decide to part away from UEFA and form their own organization anything can happen. It would also be a wake up call for UEFA and its corrupted parts.

Funny, the corrupted parts certainly belong to some of the bigger clubs

 

[Anzac]

Thought I'd give this a bump seeing as this season sees the start of the 3 season qualification period with 45m Euros allowed as cumulative pre-tax loss.

And yet despite this we see CFC & PSG spending like there's no tomorrow.

PSG will be worth keeping a close eye on as IIRC the French already have FFP type pre-tax criteria as does the Bundesliga.
IIRC both have a zero tolerance policy with automatic relegation in one and fines and points deductions in the other.
If PSG can get by their own FA they should be right re FFP & UEFA,
which could then open the door for other teams to exploit the same loopholes.

 

[DJ_Markstar]

What's the situation?

The current poor get held down as they now have no way of moving up the league barring unbelievable luck (perfect manager/player combination)

The new rich will bribe who they need to and find all the right loopholes

The traditional rich can continue as always.

Who benefits? The traditional powerhouses, of course. Oh, and the FIFA bribe receivers benefit financially. Everyone else gets ****ed over.

 

[evoh_1]

Will never be implemented and the accounts teams at clubs will make so even if UEFA had 1000s of investigative accountants on the case they won't be able to unravel how much money is being lost each season. Also I can't see how there will be a legal framework to ban clubs immediately without an appeals process (even though the EU says they won't take on appeals on the matter). Lastly there are too many caveats that allow for loses e.g infrastructure cost etc which will allow oweners to put in cash but who will value these infrasturucture costs? And who is going to determine market value? The size of the recent United and Liverpool deals should demonstrate that there is a large scope for "market value".

PSG are likely to come unstuck whatever happens if hollande brings in a 75% tax rate as ibra's contract is agreed net, so I doubt they think that FFP will be a problem for them at all. I expect City to slow down there total spending and boost revenues but then again they were making an annual £200 million loss last season so directionality or not they have alot of revenue growth to pack in to offset there current liabilities.

 

[Mastadon]

Nah football finances are not that complicated the only questions here will be on the fair value of transactions between related parties and whether UEFA will actually dare to take measures against clubs in violation of FFP rules. Clubs don't have complete freedom to do whatever they want in their accounts after all these are audited and used by the taxman.

I dont have much faith in FFP but interestingly City have not spent any money so far and have made it clear that they can't sign RVP until they move on some of their own high earners to make space on the wagebill. It looks like they finally have a limit or cap on their budget and I guess its because of FFP.

 

[draiocht fianna]

If the big clubs, espcially the ones with a sugar daddy, won't be able to cope with FFP I can see them form their own European league.

That would be a good idea. It would be far more entertaining.

You are insane if you believe that.It would be the end of football if that happened. Domestic leagues would suffer which would feed down to grassroots level. It really pisses me off when people look at football as just a bit of entertainment without thinking about the structures of the game.

The sugardaddy clubs Chelski,City and PSG aren't attractive anyway. The likes of Barca,Milan,Bayern,Madrid and ourselves etc do not like these clubs or how they operate. Who would join a breakaway league featuring City,Chelski and PSG? The answer is nobody.

 

[evoh_1]

Regular international fixtures might be interesting for those involved but would be terrible for those not and it would **** u the whole system, just look at how CL money affect clubs now. Multiply that by 10 and its close to what would happen to big domestic clubs like aston villa, everton etc.

 

[el57]

I have a feeling PSG will argue that their massive investment (and losses) are temporary to move Ligue 1 forward. This works extra good if Nasser, who owns PSG and the TV rights to Ligue 1 in France and elsewhere, agrees to split the money more equitably.

Ironically, since cash itself isn't an issue for the Qataris, PSG might be best off incurring more loss if it strengthens their argument that they are doing it for the good of the league in the short term.

 

[Le Professeur]

If the big clubs, espcially the ones with a sugar daddy, won't be able to cope with FFP I can see them form their own European league.

That would be a good idea. It would be far more entertaining.

You are insane if you believe that.It would be the end of football if that happened. Domestic leagues would suffer which would feed down to grassroots level. It really pisses me off when people look at football as just a bit of entertainment without thinking about the structures of the game.

The sugardaddy clubs Chelski,City and PSG aren't attractive anyway. The likes of Barca,Milan,Bayern,Madrid and ourselves etc do not like these clubs or how they operate. Who would join a breakaway league featuring City,Chelski and PSG? The answer is nobody.

Tbf Barça, Real and Milan can't say too much considering they're sponsored by Caixa Catalunya, Bankia and Berlusconi respectively.

Barça and Real both are a staggering £500mil in debt.

 

[jones]

Tbf Barça, Real and Milan can't say too much considering they're sponsored by Caixa Catalunya, Bankia and Berlusconi respectively.

Barça and Real both are a staggering £500mil in debt.

Those clubs aren't really sponsored by those banks, that's just wrong. It's just a different way to finance a club, both clubs have about 150m in loans from banks which they have to pay back, but the club itself is owned by its members, meaning they don't issue any shares like we did. If you're talking debt, then issuing shares/emitting bonds is also covered by the IFRS, which would have both Manure and us have far larger debt than both Barca and Real, even after subtracting our enormous cash reserves.

If you want to look at the total liabilities, which are represented by those figures you've posted, you'd see that it's not that staggering really, that "debt" includes a lot of different things, many of which aren't bad at all to have like deferred income from future services, namely season tickets. This means that sum includes money that you already received, and you won't have to pay back - it's a silly definition really but that's the world of accounting.

If we use the same definition that sees Barca and Real both have more than 500m (€ by the way, not £) on other clubs, we ourselves would be €534m in debt, and Manure would have a truly staggering €989m in liabilities. All a matter of perspective.

 

[Anzac]

<a class="postlink" href="http://en.wikipedia.org/wiki/UEFA_Financial_Fair_Play_Regulations" onclick="window.open(this.href);return false;">http://en.wikipedia.org/wiki/UEFA_Finan ... egulations</a>

The La Liga clubs owe the Spanish Govt 1.3bn in taxes alone,
whilst Seria A run off cumulative debt.

Juve have had a 33% decrease in revenues since they went to collective Tv bargaining in 2005,
and their wage v revenue ratio is 90%,
whilst UEFA's break even is 70%.

Inter's sold players worth 72m in 2010 yet still made a 69m loss that season.

 

[Anzac]

Interesting that L1 & L2 have salary caps based upon 55% of revenues,
and that the Championship is starting something similar this season,
whilst the PL Executive is in discussions as to if/how to impliment some financial guidelines for PL clubs.

Hadn't been aware that ManU & CFC were heavily involved in setting up FFP with UEFA.

<a class="postlink" href="http://www.telegraph.co.uk/sport/football/competitions/premier-league/9493345/Manchester-United-and-Manchester-City-split-by-proposals-on-Premier-League-financial-controls.html" onclick="window.open(this.href);return false;">http://www.telegraph.co.uk/sport/footba ... trols.html</a>

<a class="postlink" href="http://www.football-league.co.uk/page/FLExplainedDetail/0,,10794~2748246,00.html" onclick="window.open(this.href);return false;">http://www.football-league.co.uk/page/F ... 46,00.html</a>

 

[evoh_1]

Interesting that L1 & L2 have salary caps based upon 55% of revenues,
and that the Championship is starting something similar this season,
whilst the PL Executive is in discussions as to if/how to impliment some financial guidelines for PL clubs.

Hadn't been aware that ManU & CFC were heavily involved in setting up FFP with UEFA.

<a class="postlink" href="http://www.telegraph.co.uk/sport/football/competitions/premier-league/9493345/Manchester-United-and-Manchester-City-split-by-proposals-on-Premier-League-financial-controls.html" onclick="window.open(this.href);return false;">http://www.telegraph.co.uk/sport/footba ... trols.html</a>" onclick="window.open(this.href);return false;

<a class="postlink" href="http://www.football-league.co.uk/page/FLExplainedDetail/0,,10794~2748246,00.html" onclick="window.open(this.href);return false;">http://www.football-league.co.uk/page/F ... 46,00.html</a>" onclick="window.open(this.href);return false;

Again arsenal out of the machinations of power since dein left and only now has gazidis taken on a role where he can represent arsenal's interests in teh major changes to the game. The only hope for FFP is it slows down the mad spending as it will never stop it, certainly going to be more difficult for some guy to do what has been done at chelsea and city though i suspect it will be possible through investing in capital infrasturcture as such a loss is allowed under the rules.

 

[kenkbc2]

Well, for a start I think someone should sit Roberto `we need to spend on more players ` Mancini down and explain the FFP to him in laymen terms..

His constant whining about needing to buy new players is getting irritating to say the least..