Financial Fair Play

[London424]

I'm sure i've seen this as a topic before but the search function isn't working so here goes another.

With the silly off-season about to get into full swing with massive transfer figures banded about, the talk of city and chelsea buying the league/trophies, when do you think clubs are going to start seriously looking at this?

From my very limited knowledge of the workings of all the premier league clubs (none whatsoever), aren't only a handful of the Top 8 actually looking like being compliant?

Surely the work around can't be that easy (see City & Etihad for details)?

Hasn't Platini basically staked his reputation on this?

I'm very confused by it all when you read of Anzhi supposedly lining up a 45m, 300k per week deal for Van Persie, how is this ever going to work?

[jcremonini]

Can't say I'm a fan of the idea. Despite what we would like to think, football is a business first and a sport second. I fail to see why it should be treated any differently (and why Platini thinks he can do so)

And therein lies the problem - any decent club is run by decent businessmen who will find workarounds to the problem. The Etihad one is only the start of the possibilities.

[Fittster]

"
But perhaps the most important factor is hidden away in Annex XI of the FFP regulations. And this is where things get fuzzy. If a club can make a persuasive argument that it's losing money today, but that this is part of a long-term strategy that will lead to break-even or at least FFP compliance, then UEFA may decide to grant a license anyway. Now, obviously it can't be as simple as "We'll make a €500M loss this year but don't worry because we've signed Leo Messi, Cristiano Ronaldo, Xavi, Wayne Rooney and Manuel Neuer and our strategy is to win the Treble every year while selling out our stadium and charging fans a thousand euros a ticket while selling a billion jerseys around the world..." It has to be "credible." But, of course, "credible" can mean different things to different people. (Some of those subprime mortgages looked awfully "credible" to a lot of folks until they blew up in everyone's faces.)

The other factor is that UEFA will consider a club's "trend." (And this may be the saving grace for clubs like Chelsea, City, the two Milan teams,etc.). In other words, if you cut your losses year on year and show UEFA you're moving in the "right direction" then they may license you anyway, even if you don't meet the requirements. A bit like the dad and son bike examples above: show good will, stick to it and we'll be understanding.

http://sportsillustrated.cnn.com/2011/writers/gabr...

[andyjo1982]

jcremonini said:

Can't say I'm a fan of the idea. Despite what we would like to think, football is a business first and a sport second. I fail to see why it should be treated any differently (and why Platini thinks he can do so)

And therein lies the problem - any decent club is run by decent businessmen who will find workarounds to the problem. The Etihad one is only the start of the possibilities.

I was having a chat with a United fan on Friday night about this. He seemed pretty smug and confident that City wouldn't get around it, just because they were foiled by one obvious sponsorship attempt.

I suggested that the likes of City and Chelsea for example will have a crack team of lawyers going through the terms with incredibly fine toothcombes, ready to pounce at an opportunity to get round it.

With figures like the above suggested for RVP, there is absolutly no way that a club like Anzhi would be compliant. They already pay 300k to Eto'o, as well as big salaires to Zhirkov, Roberto Carlos and Hiddink, and thats without CL football.

I don't really know how, but City and Chelsea will undoubtedly get round it. Until there is a specific transfer and salary cap (which will never happen for the business reasons stated) the billionaires will keep pumping the millions in.

The only possible outcome I can see, is a Euro/world super league, with B teams playing in the national league. That would generate ridiculous tv revenue.

Just my 2 cents worth, but i'm really not taking these fair play rules serious at all at the moment...

[Wadeski]

Its bonkers, really. There will of course be workarounds, but what about countries whose governments give them big advantages etc? What if George Osbourne cut the rate of taxation on football clubs to 5%, but the Germans didnt?

[jcremonini]

andyjo1982 said:

I don't really know how, but City and Chelsea will undoubtedly get round it.

Chelsea have just started sponsoring Sauber F1

They pay Sauber £1m, let's say. More as a sweetener to the next bit.

Abramovich gives the team £400m.

Sauber sign a 400 year, £1m a year sponsorship deal with Chelsea. All payable up front.

[London424]

I think it's a valid concept (keep clubs solvent etc), and would really like it to be enforced properly to level the playing field somewhat, but as mentioned above when it comes to the crunch are they ever going to exclude City, Milan, Barcelona etc...I think not

[Cheib]

The thing to remember that barring a club from the Champions League is the absolute last sanction....I forget what they all are but one was a transfer embargo but that's already been dropped because it's apparently not enforceable by law.

I think if they actually ever give the regulations teeth we'll see all the major clubs just jump and form their own version of the Champions League except it'll be played all season.

Personally I'd love to see it happen but there is certainly no sign of Man City or Chelsea slowing up in their spending.

[Hackney]

It's a big cock up.
Supposed to stop clubs going into debt, yet the clubs financed by debt - and in the most precarious position because of it - United and Liverpool, are not facing issues. Yet City and Chelsea with their deep-pocketed owners are.

[Bluequay]

Hackney said:

It's a big cock up.
Supposed to stop clubs going into debt, yet the clubs financed by debt - and in the most precarious position because of it - United and Liverpool, are not facing issues. Yet City and Chelsea with their deep-pocketed owners are.

That's not really the clubs debt though is it, it's over leveraged owners saddling the club with the money they borrowed to buy the club in the first place. We've somehow allowed a situation where 2 lots of foreign owners have purchased our most famous clubs for no personal outlay. No wonder this country is going to the stter!!

[Wombat3]

Hackney said:

It's a big cock up.
Supposed to stop clubs going into debt, yet the clubs financed by debt - and in the most precarious position because of it - United and Liverpool, are not facing issues. Yet City and Chelsea with their deep-pocketed owners are.

Its to try & stop football going the way F1 was going when only Ferrari & McLaren could afford to compete. Williams (for example) were dead in the water because they just couldn't keep up. Now they have banned endless spending on mid season/tyre testing, capped the engines off at 18K rpm, limited the numbers of engines & gearboxes & now the whole grid has closed up. Last year's dominant team (Red Bull) are not dominant this year.

Maybe a slightly different set of mechanisms but same idea.

The mega rich but non profitable clubs will undoubtedly find a way around it to start with but if they do then UEFA will just change the rules. UEFA is not restricted on how it changes its rules if it deems it necessary to do so. UEFA needs the Champions league to be a proper competition that doe not just fall to those that spend the most & if they don't act then (clearly they think) that's where its headed.

The other thing I think that the likes of City & Chelsea etc are missing is that endless spending is quite probably self defeating in some ways. Building total revenues is all about off pitch revenues - sponsorship etc. For that its all about the brand & the brand needs to be squeaky clean & something external companies (and legions of fans) want to be associated with. So then the question is does being a club that just outspends everyone else in order to win carry the same brand value as being a club that is seen to make an effort to live and compete within its means? Probably not in the long term.

[MadMullah]

andyjo1982 said:

I suggested that the likes of City and Chelsea for example will have a crack team of lawyers going through the terms with incredibly fine toothcombes, ready to pounce at an opportunity to get round it.

This.

There's far higher paid lawyers who can get around certain detail than the lesser paid lawyers who made the law in the first place

whats that sir? you'd like an exclusive season ticket for £3m a yr which gives u prawn sandwich every game? deal! whats that sir? 50 of your friends want to purchase this £3m season ticket too? thats fine!

whilst not being shamefully blatant as that - there is alwyas a way around it - these guys spending this money now aint stupid

[Cheib]

Hackney said:

It's a big cock up.
Supposed to stop clubs going into debt, yet the clubs financed by debt - and in the most precarious position because of it - United and Liverpool, are not facing issues. Yet City and Chelsea with their deep-pocketed owners are.

It's not so much about debt....from what I have read it's main measure is about losses. i.e. stopping the like of Abramovich just wrting cheques of £50 to £100 mil a year to cover losses....i.e. to pay the huge wage bill and transfer fees that Chelase cannot pay out of their revenues.

[Wombat3]

MadMullah said:

andyjo1982 said:

I suggested that the likes of City and Chelsea for example will have a crack team of lawyers going through the terms with incredibly fine toothcombes, ready to pounce at an opportunity to get round it.

This.

There's far higher paid lawyers who can get around certain detail than the lesser paid lawyers who made the law in the first place

whats that sir? you'd like an exclusive season ticket for £3m a yr which gives u prawn sandwich every game? deal! whats that sir? 50 of your friends want to purchase this £3m season ticket too? thats fine!

whilst not being shamefully blatant as that - there is alwyas a way around it - these guys spending this money now aint stupid

You are dead right, but all UEFA have to do is expose such schemes as being well beyond the spirit of the rules & in doing so those that would seek to break the rules in that way are going to find themselves on trial in the "court of public opinion". That's not a good place to be if you want to sell lots of replica shirts etc to try & boost your income. Generally people don't like those that "win at all costs" & its not good for business.

Also don't underestimate the support that there is for FFP from other clubs - the Germans for a start & I think that in the current economic climate & with their own finances the way they are, FFP is going to suit the likes of Real, Barca and Man Utd very well indeed. They will suport it and they will support and indeed demand action from UEFA. If City etc are seen to be flouting the spirit of the thing then these clubs will be heard loud & clear.

As above, UEFA can continue to adjust the rules as they deem necessary. FFP may not stick on day one but I think it will have the desired effect of slowing down the "arms race" in transfer fees & wages.

[Bluequay]

I wonder if we will end up seeing some Bosman style challenge to the european courts from the players. Any form of salary cap or FFP is effectively restraining their trade and the amount of money in the pot available for wages. I realise lots of other sports have salary caps, Rugby League and Rugby Union etc but they are not infested by the kind of agents prevelent in football at the moment.

[Wombat3]

Bluequay said:

I wonder if we will end up seeing some Bosman style challenge to the european courts from the players. Any form of salary cap or FFP is effectively restraining their trade and the amount of money in the pot available for wages. I realise lots of other sports have salary caps, Rugby League and Rugby Union etc but they are not infested by the kind of agents prevelent in football at the moment.

I suppose that's possible, but firstly the economic climate is not exactly on their side & secondly, as many ways as there will be to flout the rules, there will be others to try & make them stick. UEFA can keep going on this until they find something that works.

As above, also the number of clubs that will support FFP is going to far outweigh those that don't. In fact I can only think of 5 that really don't want it (City, Chelsea, PSG, Malaga & that Russian Mob). I think practically everyone else would be happy to see a lid effectively put on transfer fees & wages.

[smj996c]

Wombat3 said:

I suppose that's possible, but firstly the economic climate is not exactly on their side & secondly, as many ways as there will be to flout the rules, there will be others to try & make them stick. UEFA can keep going on this until they find something that works.

As above, also the number of clubs that will support FFP is going to far outweigh those that don't. In fact I can only think of 5 that really don't want it (City, Chelsea, PSG, Malaga & that Russian Mob). I think practically everyone else would be happy to see a lid effectively put on transfer fees & wages.

thats ridiculous, do you really think that the 5 clubs mentioned want to continue spending indefinitely? what nonsense - the only reason that they have had to spend in an accelerated manner in the first place is to get to the top table that was and will now be even more a closed shop see G-14, ECA , FFP etc.

the former members of the G-14 don't like the new upstarts so they bring in FFP - the consequence being those who are not qualified for the ECL this year will probably never get there.

In terms of the application and acceptance of the rules you will find all clubs are in favour of the FFP. The way it is has been implemented - i.e phased in and with collaboration, it will be hard for a team to pick a legal fight as it has been introduced this way, what is more likely a legal challenge is when a team apportions outside revenue to the balance sheet and UEFA start changing the rules about whether it counts or not...

[Wombat3]

smj996c said:

Wombat3 said:

I suppose that's possible, but firstly the economic climate is not exactly on their side & secondly, as many ways as there will be to flout the rules, there will be others to try & make them stick. UEFA can keep going on this until they find something that works.

As above, also the number of clubs that will support FFP is going to far outweigh those that don't. In fact I can only think of 5 that really don't want it (City, Chelsea, PSG, Malaga & that Russian Mob). I think practically everyone else would be happy to see a lid effectively put on transfer fees & wages.

thats ridiculous, do you really think that the 5 clubs mentioned want to continue spending indefinitely? what nonsense - the only reason that they have had to spend in an accelerated manner in the first place is to get to the top table that was and will now be even more a closed shop see G-14, ECA , FFP etc.

the former members of the G-14 don't like the new upstarts so they bring in FFP - the consequence being those who are not qualified for the ECL this year will probably never get there.

In terms of the application and acceptance of the rules you will find all clubs are in favour of the FFP. The way it is has been implemented - i.e phased in and with collaboration, it will be hard for a team to pick a legal fight as it has been introduced this way, what is more likely a legal challenge is when a team apportions outside revenue to the balance sheet and UEFA start changing the rules about whether it counts or not...

Said the Man City fan...

[im]

FFP will clearly be tested in the European courts the minute someone falls foul of it.

I'd have thought there are restraint-of-trade issues at the very least.

Interesting times ahead

[London424]

im said:

FFP will clearly be tested in the European courts the minute someone falls foul of it.

I'd have thought there are restraint-of-trade issues at the very least.

Interesting times ahead

I'm not an expert in the slightest but why would it be restraining trade? Isn't it just saying you cant spend what you cant afford.

So instead of the player getting 250k a week the club can only afford 150k. It then just becomes about supply and demand right?